Here's The Money Families Could Receive Under Gov. Walz's Plan

ST. PAUL, MN — Gov. Tim Walz this week unveiled a $12 billion package he hopes will make Minnesota "the best state in the country for kids to grow up."

The proposal aims to lower the cost of child care and reduce child poverty by expanding tax credits for families.

The package also makes "the largest investment in public education in state history," according to Walz's office. Specifics include a plan for universal school meals for students and expanded access to special education and mental health resources.

"For a middle-class family with young kids, this budget would cut the cost of child care by thousands," Walz said in a news release Monday.

Lt. Gov. Peggy Flanagan added that "from lowering the cost of child care to reducing child poverty with the Child Tax Credit, and providing universal school meals to all students, the investments we make this legislative session will resonate for generations. It’s a very big deal for our kids."

Reducing childcare expenses

Walz's plan calls for $539 million in tax credits in 2024-2025 and $547 million in tax credits in 2026-2027 to expand the child and dependent care credit:

• Families making under $200,000 with one child could receive up to $4,000 a year for childcare costs
• Families with two children could receive up to $8,000 a year for childcare costs.
• Families with three children could receive up to $10,500 a year for childcare costs.

Reducing child poverty

Walz's plan calls for a "nation-leading" child tax credit do reduce poverty by 25 percent:

• This credit would provide $1,000 per child families making less than $50,000, with a maximum total credit of $3,000.

Expanding K-12 education credit

Walz is calling for the current K-12 education credit to account for inflation. The credit can be used to reimburse non-tuition educational expenses like tutoring, after-school programs, school supplies, and transportation.

• Under Walz's plan, the amount of income at which credit phaseout begins would move from $33,500 to $59,210.

Expanding the Family Assets for Independence Minnesota (FAIM) program

Walz's proposal expands a savings account matching program called Family Assets for Independence (FAIM). The program helps families contribute to 529 college savings plans and emergency savings accounts.

The governor proposes increasing the lifetime financial match limit from $6,000 to $12,000.

Department of Children, Youth, and Families.

Walz is also calling for the creation of a new state agency, which would be called the "Department of Children, Youth, and Families."

The department would oversee child care and early learning programs, child support, child safety, and other family programs.

"A Department of Children and Families will consolidate early childhood programs from multiple state departments for better accountability, efficiency, and innovation," said Clare Sanford, Minnesota Child Care Association.

Read Walz's full proposal below: