And it would devote an additional $284 million for new health and human services spending, including subsidies to help reduce premiums on the state health insurance exchange by 20 percent.

Walz, a Democrat, is also proposing to raise the gas tax by 20 cents a gallon to help pay for transportation projects.

"This is not a choice between whether we want a gas tax or not," Walz said.

RELATED: Walz pick for transportation commissioner signals gas tax increase

Instead, he said that without it the state will have "crumbling roads and bridges that risk our safety."

He said the tax would be phased in over two years, then more increases would be indexed to inflation later.

On the 20-cent gas tax increase, Gov. Walz says “this is not a choice between whether we want a gas tax or not.” He says without it we’ll have “crumbling roads and bridges that risk our safety.” It would be phased in over 2 years then index more increases to inflation later. — Tom Hauser (@thauserkstp) February 19, 2019

Minnesota has a $1.5 billion surplus, but recent monthly revenue numbers suggest that number could shrink.

Walz said the budget he is proposing is "the budget Minnesotans voted for by historic margins."

The budget would also increase vehicle registration motor vehicle sales taxes.

Here's the current breakdown of where the money goes when you buy one gallon of regular gas in Minnesota.

Each time you go to fill up, you'll see a sticker like the one below on the pump. It's from the Minnesota Department of Commerce and clearly says state gas tax money can only be used for roads and bridges.

Republicans were critical of the proposal.

Playing off Walz's campaign theme, House Minority Leader Kurt Daudt said the budget proposal doesn't make us "one Minnesota. It makes us one expensive Minnesota."

He also said that with a $1.5 billion surplus, raising taxes doesn't make sense.

GOP House Minority Leader Kurt Daudt says the Walz budget doesn’t make us “one Minnesota. It makes us one expensive Minnesota.” Playing off Walz campaign theme. Daudt says with $1.5B surplus that raising taxes doesn’t make sense. pic.twitter.com/DSJZUGc1Zu — Tom Hauser (@thauserkstp) February 19, 2019

Republican Senate Majority Leader Paul Gazelka said the proposal would turn Minnesota into a "cold California."

Gazelka said he was "surprised" by the combination of a gas tax increase, vehicle registration taxes and the sales tax on vehicles. Daudt called those proposals regressive taxes that he said would hurt most Minnesotans.

KSTP's Tom Hauser contributed to this report