Chances for a special legislative session to divide up Minnesota’s budget surplus went from slim to none late Thursday after a meeting among legislative leaders broke up.
Talks “reached an impasse,” said Gov. Tim Walz, who spoke to reporters with DFL House Speaker Melissa Hortman after a meeting with Republican Senate Majority Leader Jeremy Miller.
Hortman said Miller told her that a deal to split the budget surplus three ways is no longer in force now that the regular session is over.
“If Minnesotans think we need to have a special session to finish this work, if Minnesotans think we need to invest in schools and nursing homes and roads and bridges and pass these tax cuts, they need to let Senate Republicans know,” Hortman said. “Because Senate Republicans have made it clear to us that they don’t feel any pressure. They don’t see a need to come back and finish the work.”
Walz said Democrats were ready to compromise, and he can't believe Republicans walked away from the largest tax cut in state history.
Miller said in a statement that Walz and House Democrats “have different spending priorities than Minnesotans.” Miller said they were still many millions of dollars apart on spending for public safety and human services, and, “After four months of session and four more weeks of discussions, the differences could not be resolved.”
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About a week before the end of the regular session last month, the three leaders announced an agreement on a plan to use $4 billion of the surplus over the next few years to cut taxes, $4 billion to increase spending in a number of areas and to save another $4 billion in case of an economic slowdown.
Now that money will remain unspent, and next year’s Legislature and whoever wins the governor’s race will decide how to spend it.
In recent weeks Walz and others have expressed concern that no matching funds were approved to tap federal infrastructure money, but some Senate Republicans downplayed that issue.
The tax cut agreed to by legislative negotiators would have eliminated state taxes on Social Security income, permanently cut income taxes and given renters and property owners a break.
Also left undone is a public works construction bill, which is typically the main focus of the even-year session.
Because lawmakers were debating a surplus, state government will not shut down due to the lack of a deal. The budget is in place until the middle of next year.