MINNEAPOLIS (WCCO/AP) — Gov. Tim Walz says his revised state budget proposal looks to the future while accounting for the recent economic forecast.

On Friday at the state capitol, Walz says the revised budget bottom line is now $562 million, compared to the original bottom line of $789 million.

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“We are proud today to release a smart, responsible budget that looks to the future,” Walz said. “While we had to take a hard look and scale back some proposals, the core tenets of our budget—education, health care, and community prosperity—remain strong. This budget tackles the great challenges facing our state and promotes opportunity for everyday Minnesotans while protecting our fiscal stability.”

Altogether the changes include reductions in proposed new spending of $131 million, tax changes that would bring in an additional $65 million, returning $142 million in unspent health care reinsurance funds to the general fund, and new spending of $37 million that would go mostly to higher education.

(credit: CBS)

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“While we had to make some tough choices, our revised budget does not waiver from our commitment to invest in the lives of Minnesotans, particularly children and families,” Lieutenant Governor Peggy Flanagan said. “We look forward to working with the legislature to pass this budget and build a brighter future for our state.”

Press Conference:

Walz says the revised budget is balanced in fiscal years 2020 and 2021 due to strategic spending reductions and tax bill adjustments.

Minnesota House Minority Leader Rep. Kurt Daudt released a statement, calling the revised budget disappointing.

“It’s disappointing that Gov. Walz has not backed off the most harmful elements of his budget—a billion dollar tax increase on Minnesotans’ health care, and a crippling 70 percent gas tax hike,” Daudt said. “The gov should focus on helping Minnesotans keep more of their hard-earned money, & work to fund basic priorities like roads & bridges with our budget surplus, rather than making health care more expensive & driving up the cost of everyday goods for all Minnesotans.”

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(© Copyright 2019 CBS Broadcasting Inc. All Rights Reserved. The Associated Press contributed to this report.)