By Isaac Russell, Director of Public Policy

On January 24, Governor Tim Walz made national headlines with his proposed $65 billion 2024-2025 fiscal biennium budget, the largest in Minnesota history. The Governor understands that addressing the state’s economic, social, and infrastructure needs on this scale requires big money. The state’s unprecedented $17.6 billion budget surplus will also come into play.

This is our moment -- Minnesota’s once-in-a-generation opportunity to chart and build a racially equitable, inclusive, and sustainable path forward that has rippling impacts on the state’s families and economy for years to come.

Policy Leadership
While I’ve led the Center’s public policy for just over a year, the organization has had a strong presence at the Capitol for nearly five. Bold social and economic policy change requires tenacity, strategy, and partnerships.

What I can also tell you is this: There has never been a better time for initiatives that have a strong racial equity component than right now. And with this unprecedented amount of money, I urge organizations that are doing racial equity work to offer solutions that are more systemic in nature.

New Day Dawned
As I walk the capitol corridors, the change in the air is palpable. It’s a powerful thing to witness leadership of color in both chambers shaping and passing legislation that prioritizes the experiences of and impacts to Black, Indigenous, Latino, and Asian communities in new ways.

Less than two months into session, this momentum has already resulted in significant policy change. The CROWN Act signed into state law. Juneteenth designated as a state holiday. Plus, there are proposals to establish new offices that prioritize Black health and missing and murdered Black women.

This is what progress and momentum looks like. My responsibility to lobby for the Center’s public policy priorities – Racial Equity Impact Notes, $10 million direct appropriation for job creation, and increasing the state procurement and preference equity cap -- is made easier by the partnerships there now that weren’t in previous years. We are strengthening relationships and forging new ones.

There is no time to waste. Let’s get into it.

$65M Budget Highlights
Here’s a budget breakdown of what I see as key investments towards a more racially equitable and inclusive state.

1. Investments focused on employment, wages, and wealth-building in Black, Indigenous, Latino, and Asian communities. This includes targeted investments in small business supports, workforce programs, and homeownership that recognize and address historic and systemic disinvestments and barriers that have hindered Minnesota’s economic competitiveness.

2. Investments in businesses along commercial corridors. Examples: the $85 million proposed funding to the Mainstreet Revitalization Fund along with funding for Small Business Navigation Program, Small Business Development Centers, and the Small Business Partnerships Program are critically important to creating jobs, building wealth, and growing our economy.

Through these programs, we hope to see increased coaching, access to flexible capital like forgivable loans, and small business consulting. We also need to ensure these programs have a strong racial-equity orientation with significant outreach to minority-owned businesses.

3. Advancing racial equity in Minnesota’s workforce. The Governor’s budget aims to increase family sustaining wages for Black, Brown, and Indigenous workers by recommending $60 million in training and employment services for workers traditionally overlooked.

4. Emphasis on developing workforce opportunities for family sustaining wages, which is one of the metrics we use to evaluate if our economy is racially equitable and inclusive.

5. Proposed funding for increasing home-care workers’ rates. This action would provide an increase to over 20,000 workers statewide. We define a living wage as a worker who earns at least $39,795 annually, of which only 49 and 44 percent of Black and Hispanic workers earn, respectively.

6. Expansion of the Child Tax and Dependent Credit. Estimates show this would help roughly 100,000 households with child-care costs. Families that earn less than $200,000 could get up to $4,000 if they have one child, $8,000 for two, and $10,500 for three. A child tax credit for lower-income Minnesotans could give families $1,000 per child, up to $3,000.

7. $1 billion expansion of housing funding. This amount includes funding for rental assistance, workforce and affordable homeownership, assistance to those facing homelessness, and workforce housing.

While $1 billion is a large number, even more is needed. The Twin Cities alone faces a housing shortage of at least 45,000 affordable units. This number does not take into account the struggles of families trying to purchase their first home. While there is some funding for the construction of affordable homes and home down-payment assistance, we know more resources are needed.

Committing to the Long Term

While the Governor’s budget makes historic investments in Minnesota and includes a strong equity component, we know that racial equity and inclusive growth will require sustained efforts across time and at different levels of government.

It will mean strong leadership to carry the work forward beyond the next two years and from one administration to the next to keep Minnesota moving forward for all Minnesotans.

We can do it.