Still no deal at State Capitol to prevent business tax increases

Gov. Tim Walz
Gov. Tim Walz speaks to reporters at the Minnesota Capitol on Monday after a meeting with legislative leaders failed to resolve a standoff over the state's depleted unemployment trust fund.
Tim Pugmire | MPR News

Updated: 6 p.m.

There’s still no agreement on replenishing the state’s unemployment insurance trust fund and repaying money owed to the federal government.

DFL Gov. Tim Walz and top House and Senate leaders met again Monday to try to reach a deal. State officials insist that Tuesday is the deadline to act to avoid tax increases on employers.

Walz said he believes the state can address unemployment and the front-line worker pay that House Democrats want.

“We need deadlines. We need to know that at some point in time you need to make a decision,” Walz said. “It may not be 100 percent accepted. It may not be 100 percent exactly what you wanted. But it’s a decision that works for the people of Minnesota and move forward.”

Minnesota’s high unemployment rate and benefit payout during the COVID-19 pandemic drained the trust fund. State officials were forced to borrow from the feds.

The Minnesota Department of Employment and Economic Development has repeatedly said the deadline is Tuesday to take action and avoid tax increases on businesses.

DEED Commissioner Steve Grove told members of the House workforce committee Monday that time is critical.

“As of tomorrow [Tuesday] this gets a lot harder to unwind, and time is of the essence on this piece,” Grove said.

The House turned back a last-gasp attempt later Monday to force a vote on a fix-it bill.

Three Democrats joined a united Republican front in pressing for the action, but it failed to muster enough votes.

Democrats continued to argue that employers have more time to submit payment. Republicans said businesses can't easily delay their tax payments and that higher assessment would create a hardship for smaller businesses in particular.

The stalemate on unemployment could get in the way of other issues. Walz said there are other important things to do this session, including education funding.

“I worry about that,” Walz said, adding that he will meet with leaders again Tuesday.

Your support matters.

You make MPR News possible. Individual donations are behind the clarity in coverage from our reporters across the state, stories that connect us, and conversations that provide perspectives. Help ensure MPR remains a resource that brings Minnesotans together.