After a decisive 11-point win in November, DFL Gov. Tim Walz is moving on a vision for school investment, a more cost-effective health care system, and an ambitious transportation infrastructure program. He’s unapologetic about pushing for a gas tax increase, arguing that nearly 1.4 million Minnesotans endorsed the positions he advocated during the campaign.
Yet Walz, who had represented Minnesota’s First District in the U.S. House since 2007, faces a challenge that no other governor in the United States must address. Minnesota is the only state with a divided legislature. In a TCB interview at the State Capitol, the 54-year-old Walz, who’s from Mankato, discussed his plans for the state.
Q When you look at a $1.5 billion surplus in the context of a projected budget of $47.5 billion, that’s not a huge figure. How are you going to manage the expectations of all of the interests who want more or new spending?
A Cyclical economics would tell us that there will be a bit of a slowdown. We need to make sure that those things that created growth are supported; that’s a well-qualified workforce, partnering together with our research institutions, the University of Minnesota, so we continue to innovate and attract a high quality of worker and business here. My goal is going to be to look at long-term growth potential, which is investments in our people, infrastructure, and research, while maintaining that healthy budget reserve.
Q Are you talking about increases in the base K-12 funding or will there also be major education initiatives in your first budget?
A What I am talking about is building on that base that was put there, but starting to look at education holistically from pre-K all the way to job placement. We are looking at the smart investments in our land grant university in terms of research. Aligning with Medical Alley is a great example of how we can bring things together, but also working with the trades and apprenticeship programs to make sure the serious worker shortage, especially in the building trades, is addressed in a smart manner.
This is a great example of where the partnership with our businesses is going to be critical—understanding what their needs are, not just today, but also a decade forward. The investments that Gov. Mark Dayton and Minnesotans made in early childhood education will take a decade to start paying off. But it will lead to a better-qualified workforce, higher graduation rates, and less use of social services and the criminal justice and corrections system.
Q During the campaign, you advocated for a single-payer health care system. At the state level, what changes can you make?
A Health care was the No. 1 issue. It’s foundational to people’s well-being, it is foundational to business health to make sure that we have a healthy workforce. My focus was on cost containment on the front end through preventative care, with an understanding that if people have access to quality, affordable care, they are able to stave off some of the things that become chronic, debilitating, and incredibly expensive.
Certainly I believe in market forces, but in health care, they are nonexistent.”
Q What approach did you take when you were in Congress?
A I was more than willing to listen and to compromise. The thing I was most frustrated by is this nonsense that we were going to rip out ObamaCare and there’d be this magic fix. Well the magic fix wasn’t there. Certainly I believe in market forces, but in health care, they are nonexistent. What I have advocated for is an approach that recognizes that health care is a basic human right, that it should not be so costly that it is prohibiting people from getting it, and that we need to pay our providers in a manner that keeps them in business.
Q How would you describe your solution?
A When I am asked about the single-payer issue, I note that 15 of the top 17 global economies moved in that direction. They pay less [for health care] and have better health outcomes. If we can come up with something better, I am certainly open to it. What I do know now is we have folks on the individual market who need to have relief. I have proposed the MinnesotaCare buy-in to allow folks to buy in at cost into that system. And we’re going to be proposing that this year. That is the start to health care reform.
Q You’ve talked about supporting local communities. To what degree does that mean increasing local government aid as a means to slow the rate of property tax hikes? In St. Paul, city government just approved a 10.5 percent property tax increase.
A The Legislature can certainly expect that a priority of mine will be to get us back to pre-2002 levels, when we saw the cuts. After the state cuts, we saw an acceleration of these bonding referendums and so property taxes started to go up.
Q Your concern is about the regressive nature of property taxes?
A Yes. And the quality of education shouldn’t be determined based on a zip code and whether children live in a property-rich or -poor area. We have had bonding referendums in greater Minnesota to fix leaky roofs. Minnesota can offer a fairer system. I believe in the two pillars that I ran on—equitable education funding to all districts and the restoration of local government aid.
Q You campaigned on an increase in the gas tax to support infrastructure projects. How do you successfully make the case in a divided legislature?
A One of the reasons why I think we received historic numbers of votes was an honest discussion on budgeting and what you should get out of your tax dollars. Anecdotally, there is not a place in the state where I can’t come up with a road project. If I am driving west on I-94, the folks in Rogers will tell me something needs to be done. In Duluth, a bottleneck is slowing down investment. Legislators can come to the Capitol and say, “Nope. I’m not going to do a single thing on taxes.” Then they need to go home and tell [constituents] why [people] are frustrated, why there are more accidents on Highway 14, why commerce has slowed down in Rogers because people can’t get to Cabela’s. If you are a business owner, this issue of an efficient way to move people and goods is critical to you.
Q Minutes after the budget forecast was unveiled, Republican legislative leaders said they’d oppose a gas tax increase. As in 2008, do business leaders around the state need to push hard for a gas tax hike to get it approved?
A Yes. I will go out and work with them on that. In November, we had a referendum on ideas. During the campaign, I supported a gas tax increase. An overwhelming number of Minnesotans agreed with that. If these legislators are doing what our democracy demands of them, citizens are asking for this, businesses are asking for this.
If you are a Republican and you’ve just seen that you’ve had a pretty bad electoral defeat, get some things done for people, go home, and take credit for that.”
Q During the listening sessions you conducted, what did you hear about raising the minimum wage to $15 an hour?
A We heard a lot about economic security and housing. It’s very difficult to talk about housing if you are not talking about a wage that can afford housing. We talked about education affordability and making sure that we are paying a living wage for fair work. I do think there is agreement that if somebody is working full time they should be able to afford basic, safe living conditions and access to food and health care.
Q As a former classroom teacher and now governor, what do you think needs to occur to address the shortage of skilled-trade workers?
A I say this as a parent of a 12- and a 17-year-old; it starts with the parents. Minnesota has an issue with this [because] we are basically last in [the number of] school counselors. A lot of parents of a certain age were of the belief that a four-year [college] degree was the only path to financial and economic security. That’s not true.
A journeyman sheet metal worker in the Twin Cities makes over $100,000 a year in a noble profession that is in high need [of workers], that provides them the skill and the artistry that they want. Same thing with electricians, skilled carpenters, and all of the trades. It starts with parents understanding that those options are available. I think schools need to be more deliberate in career pathways and start identifying them at an age when children start to make those decisions, which tends to be younger than we think—in middle school.
Q We’ve seen a chronic problem of racial inequities in public school student performance. What are the multiple solutions needed to make better progress?
A I say this as a public school educator: We do probably better than anybody in the nation in educating our children if they are white, and we do about as poorly if they are not. That said, the solutions come from those very communities of color themselves. It’s not the state doing things to them; it’s the state working with them. I want to be held accountable on this. If we do not close this gap, it is not only a moral failing, it is an economic failing for the whole state. These are achievement opportunity gaps for all of Minnesota. Seventy percent of our workforce in the next 25 years will come from communities of color.
Q How is the lack of federal immigration legislation affecting the ability of immigrants to work in Minnesota?
A When the United States Senate passed comprehensive immigration reform [in 2013] to speed the capacity of the people who want to come here the right way and work—while providing border security against those who don’t—the United States House wouldn’t even vote on it. Here in Minnesota, they clearly rejected a divisive immigration message in favor of one that was inclusive that I was delivering. The failure to pass federal immigration reform is hurting the ability of business to keep and retain employees.
Q You’ve acknowledged that Minnesota’s workforce shortage has arrived, and it can easily constrain growth. What needs to happen to attract more workers to the state?
A We have safe communities with high-quality public schools and high amenities. We are starting to see that people are moving here from other states, not just from other countries. We need to make sure that this is a state that is going to be partners with business, and friendly. The state needs to be responsive, not just a watchdog or a regulatory agency. The state of Minnesota can partner to solve problems like worker housing and training, and then let these businesses turn loose their entrepreneurial spirit.
I’m not going to allow the divisions. And I’m not going to accept the rigidness of thinking that stops us from doing Minnesota’s work.”
Q Are there two or three anchors for Minnesota’s economy, such as medical technology, health care or food, that you think can fuel economic prosperity for the next 50 years?
A I would add renewable energy. Minnesota is in a clean-energy economy. We possess abundant fresh water, we have the capacity to produce as much food as any place on the planet, and our research institutions lead on medical technology. Aligning our resources on Medical Alley makes sense.
Q We have seen five crop seasons of low commodity prices for wheat and corn. Soybean farmers have been hurt by the trade war with China. Beyond aid that is coming from the federal government, do you think the state will need to step in to assist struggling farmers?
A Yes. Our farmers were put at the pinnacle of this trade war. There is no upside, there is nothing more we are going to gain in agriculture. Because of the federal government’s dysfunction, I foresee Minnesota working with our trade partners to establish and reestablish trade relationships. We need to explore some additional state-based crop insurance or safety net programs. We are losing dairy farmers daily. Minnesota can’t do it alone. But there are some things we can do to help keep our agricultural base a little more stable.
Q You are the first person from rural Minnesota to be elected governor since Rudy Perpich won reelection in 1986. You campaigned on a “One Minnesota” theme. How do you bridge the political divides between rural and urban areas?
A It starts with communication. Our late-November/early-December listening tour was a great example of that. Massive numbers of people showed up in 23 communities in every corner of the state. What came out of that was listening to our neighbors and finding out we have far more in common. School quality comes up in La Crescent as much as it came up in Duluth. This idea about health care costs, it didn’t matter if it was north Minneapolis or Mankato.
Q You will be working with a DFL-controlled House and a Senate with a one-vote Republican majority. What will you do to build relationships with legislators of both parties?
A There’s going to be an opportunity to forge lasting solutions [about which] people can go home and say, “We did this together” and be proud of that. With Senate Majority Leader Paul Gazelka, there is a willingness to have honorable and decent conversations. I will take responsibility to make some of those compromises. But it’s very clear we just had a referendum on everything from infrastructure to education to health care to immigration, and Minnesotans in historic numbers agreed with the vision that we are laying out. That means I need folks to come a little bit our way. I’m not going to allow the divisions. And I’m not going to accept the rigidness of thinking that stops us from doing Minnesota’s work.
Q Citizens get disgusted with special sessions because they want government to work. Do you have strategies to avoid the trap of falling into special sessions that we’ve seen in recent years?
A What I heard for two years of running for governor and this listening tour was that making government function is a top priority among people. One of my strategies is to start early and be very inclusive in this process. As we are building a budget, we’re speaking very clearly with Senate Leader Gazelka. If there are some wins that we can get for Minnesotans right now, let’s get those early in the session. Get them over and I’ll sign them and let’s show the people that the system works. If there truly are some red lines that are nonstarters, instead of using those as tools or fake leverage at the end of the session, let’s just remove those and get down to work. If you are a Republican and you’ve just seen that you’ve had a pretty bad electoral defeat, get some things done for people, go home, and take credit for that.
Q Why do you want this job, and what values do you think Minnesotans share?
A There is a uniqueness to this state that provides a sense of hopefulness, a state that can give second chances, a state that is willing to lift you up. This is a state that provides endless potential for both entrepreneurs and public service. I think we can be the example of how our democracy works best, [where] differences of opinion can be strengths. People were asking me to be someone who could bring us back together and to find those common grounds.
Liz Fedor is the Trending editor of Twin Cities Business.