Gov. Tim Walz promotes plan to expand Minnesota's economy over the next decade

STACY, Minn. - Gov. Tim Walz used the setting of a sheet metal manufacturer on Wednesday to promote a sweeping 10-year plan to expand Minnesota's economy, while renewing his call for a special session in the short term to help Minnesotans struggling with high prices.

"We have the capacity to do both those things," Walz said, surrounded by humming equipment on the floor at Wyoming Machine. "Short-term triage, lowering taxes, investment infrastructure and implementing some of these long-term plans."

The plan was developed over the span of nearly a year by a council of 15 business, nonprofit, labor leaders and members of the governor's cabinet. It includes dozens of recommendations — everything from investing in child care, public safety and arts programs to making Minnesota the top state in teacher salaries.

Leaders on the governor's Council on Economic Expansion said Minnesota is at an "inflection point" after the pandemic.

"So much has happened in the state and in our country in the last couple of years that have reshaped our personal and political life," said former Hormel CEO Jeff Ettinger, co-chair of the council and a DFL candidate running for southern Minnesota's open congressional seat. "It will define the future of our economy here."

Out of the disruption caused by the pandemic, Walz created the council in September to use the moment to rethink the state's economic growth. The report comes on the heels of the state's historically low unemployment rate — the lowest of any state recorded in history — but businesses are still struggling to find workers.

In the short term, addressing the state's workforce shortage and helping businesses get started in Minnesota have to be top priorities, said Department of Employment and Economic Development Commissioner Steve Grove.

"It's holding back productivity if current owners don't have the people to hire," Grove said.

The state's labor market tightened during the pandemic as many people left their jobs permanently and others had greater flexibility on where they work and live. But there are untapped pockets of workers across the state, according to the report, both in rural areas and in communities of color that will be critical to the state's economic growth.

The report recommends the state boost child care tax credits and programs to increase the number of people who can immediately enter the workforce, as well as invest in homebuyer financial assistance for communities of color.

"We desperately need every Minnesotan and every community in order to thrive economically," said Paul Williams, co-chair of the council and president and CEO of the Project for Pride in Living. "Our rural areas need the cities, our cities need our rural areas."

It also proposes dramatic changes and investments in K-12 education, including capping class sizes at 25 students in every school and making Minnesota the top state for teacher salaries.

The council wants to make computer science a high school graduation requirement to meet the growing demand for these skills. Minnesota is last in the nation in its computer science education program, according to the report.

Grove said the state saw a 40% spike in new business filings and the state needs to do more promotion and marketing to attract companies to settle in Minnesota. The report recommends spending up to $20 million per year on marketing to in-demand employers.

The report also comes against the backdrop of an election year when incumbent Democrats are facing criticism over high gas prices and rising inflation. Many of the ideas — but not all — aligned with Walz's broader policy goals during his first term as governor. He is seeking re-election in the fall.

His Republican opponent, Scott Jensen, said the 10-year plan failed to "mention the words 'inflation,' 'gas prices' or 'utility costs' once."

"Governor Walz proved once again he's tone deaf to the plight of working Minnesota families and isn't up to the task of leading in the moment," Jensen continued.

Walz said he was still digesting the report and would not commit to calling legislators back to enact any of the specific recommendations. But he continued his push for legislators to come back in a special session this summer and pass a $4 billion package of tax cuts and other proposals to put money back in the pockets of Minnesotans in the shorter term, arguing nothing will get done until May if lawmakers don't act now.

The governor and legislators hit a stalemate in May on a multibillion-dollar framework for a deal to cut taxes and boost spending on education, health care and public safety.