Session over, July 1 is new state budget deadline

Minnesota Legislature
Minnesota Gov. Tim Walz speaks at a podium as Senate Majority Leader Paul Gazelka, R-East Gull Lake (right to left), and House Speaker Melissa Hortman, DFL-Brooklyn Park, listen during a press conference Monday in St. Paul, announcing an agreement to spend $52 billion on the next two-year budget.
David Joles | AP

Minnesota lawmakers walked out of the state Capitol in broad daylight after the 2021 session came to an end. In most years, that alone would be a banner accomplishment. This year, it produced howls of protest.

The objections stem from the fact that the Legislature didn’t complete a single budget bill by Monday’s deadline. It’s a point Republican House Minority Leader Kurt Daudt dwelled on.

“Basically, I think Democrats were waving the white flag of surrender. This was the least productive session in modern history,” said Daudt, who was also critical of the deal cut by fellow Republicans in the Senate with a half-dozen provision he called “completely unacceptable.”

Gov. Tim Walz and legislative leaders took until the last day of the session to agree on a broad framework for a roughly $52 billion two-year state budget, but acknowledged that many details and key policy differences still need to be resolved before a planned special legislative session to pass final bills next month.

The budget agreement exempts federal Paycheck Protection Program loans and enhanced unemployment benefits from state taxes, even though taxpayers may have to file amended returns because the agreement came on the same day tax returns were due. 

The agreement also increases spending for education, including $75 million for summer school programs to help students who fell behind because of remote learning due to the COVID-19 pandemic.

Despite criticism from Daudt and some others who weren’t involved in negotiations, those who reached the deal held it up as a major achievement. 

“Minnesota did it again,” Walz said, noting divided leadership in state government. “It took courage and leadership to stand up.”

Republican Senate Majority Leader Paul Gazelka claimed victory for not raising taxes.

“Promises made, promises kept,” he said. 

“A win-win-win budget,” said DFL House Speaker Melissa Hortman, who noted the agreement would not have been possible without the infusion of more than $2.8 billion in federal COVID-19 relief from the law proposed by President Joe Biden and passed without a single Republican vote in Congress. 

“We’re in a position to give tax cuts and make historic investments in E-12 education,” because of the federal money, Hortman said. “This is an agreement that serves all of us.”

Hortman also noted that because of the one-time nature of the federal aid, there are concerns about being able to sustain the spending on an ongoing basis.

Legislative conference committees, which will become working groups once the Legislature ends its regular session by midnight, will work out exactly how money is spent within the broad targets established by the agreement.

Policy differences on ending the governor’s COVID-19 emergency powers and on police accountability are still unresolved. 

“We’re still working on them, related to emergency powers, related to police accountability,” Gazelka said. “That’s the role of the conference committees. As they work together, we’re hoping to find some solutions there. But we did not address every policy issue at this point.”

Another disagreement yet to be resolved is on clean car rules the Walz administration has adopted that face fierce opposition from automobile dealers and Republican lawmakers. 

The agreement calls for details on spending to be worked out by May 28 and on policy by June 4, but Hortman acknowledged deadlines tend to slip at the Capitol. The Legislature is already set to hold a special session on June 14 because of Walz’s extension of emergency powers, and leaders hope to pass final bills by then. 

Special sessions have not been unusual during budget setting sessions over the last 20 years, especially when different parts of the government are controlled by different parties.

“Perhaps it’s time to recognize it’s not the same legislative calendar as was required in 1973,” Hortman said. 

A handful of bills, including one dramatically expanding Minnesota’s medical marijuana program to allow use of cannabis in plant form, did pass on the final day. It will remove a restriction against any smokable forms by program enrollees.

That, too, produced some tension in the Republican ranks.

“So for the people who are listening and want legalized marijuana, you are basically getting it right now through the back door,” said Rep. Tim Miller, R-Prinsburg. “And I believe through the front door here pretty soon.”

Sen. Michelle Benson, R-Ham Lake, defended it.

“It is not our goal to make this a path to legalization. It is our goal to make this available to people who have medical need and cannot afford it,” she said.

House Majority Leader Ryan Winkler, DFL-Golden Valley, said it would save patients in the medical marijuana program up to one-third of their costs for the cannabis and make the intended benefits more accessible.

The later deadline to finish the work could make it even harder to reach a consensus on details. Most of the grumbling Monday afternoon came from House Republicans. 

“I would just ask the question: What have we accomplished? What did the Senate Republicans get?” said Rep. Greg Davids, R-Preston. “I think one word sums them both up: nothing.”

The stickiest issues might not be resolved this year, Gazelka said

“There’s a lot of policy provisions that both sides are not going to agree on,” he said. “We’re going to be throwing those overboard, getting the budgets done and getting the resources available for people.”

The delayed budget will have some implications. Minnesota Budget Commissioner Jim Schowalter said layoff notices are likely to go out later this month or in early June to state employees in case of a possible shutdown.

“Obviously, there’s a lot of costs and difficulties that happen without a budget. We’ve only started to investigate those,” Schowalter said. “All of our attention was on putting together a budget that works. And that’s where our first efforts have been.”

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