House Democrats on Monday voted down a Republican bill that would allow citizens to decide if a portion of future budget surpluses should be returned to taxpayers.

The bill (H.F. 4) establishes the Minnesota Tax Relief Fund and would ensure excess tax revenue is returned to the Minnesotans who paid it. This is an effort to avoid repeating what happened in 2023 when Democrats — in full control of the Capitol — spent an $18 billion surplus as part of a 40-percent increase in the state budget – raising taxes by $10 billion along the way.

Back in 2023, people wanted that massive surplus to be used for tax relief, safer communities, and quality education for children. No matter your political leanings, most people were not asking that our historic, one-time state surplus be used to fund a 40% increase in ongoing state spending. This bill would stop that from happening again and protect taxpayers.

The bill proposes a constitutional amendment question on the 2026 general election ballot, asking voters to decide whether future budget surpluses should be automatically refunded. Any projected revenues that go over five percent of projected expenditures according to the last biennial budget forecast will be used to fund the account.

Enshrining the principle of surplus returns in the Minnesota Constitution safeguards taxpayers from future overreach and promotes financial accountability in state government.

The bill failed after a split vote along party lines, 67-67.