Politics and Government

Legislature sets out to build a budget  — a big one

A Black man speaks at a podium
Gov. Tim Walz, House Speaker Melissa Hortman, Senate President Bobby Joe Champion and other state officials announced an agreement on March 21 on broad budget numbers that set the stage for legislative work on a new two-year state budget.
Brian Bakst | MPR News

It’s officially budget bill season in the Minnesota Legislature.

Category-by-category spending packages will roll out this week. The plans all have to fit within limits agreed to by Gov. Tim Walz and DFL legislative leaders. Eventually, they’ll make up a two-year state budget totaling more than $70 billion. 

“What Minnesotans wanted was a budget that supported education, a budget that supported working men and women of Minnesota,” said Assistant Senate Majority Leader Nick Frentz, DFL-North Mankato, adding that the goal is to pass one that “every Minnesotan north, south, east and west, old and young will be proud of.”

Senate Minority Leader Mark Johnson, R-East Grand Forks, described the in-the-works budget as a “runaway train of spending in Minnesota that Minnesota taxpayers will be paying for years and years to come.”

The plan allows a budget that reaches nearly $72 billion over two years — compared with about $52 billion now. But $10 billion or more of the new figure is considered one time, meaning the money isn’t establishing or feeding a permanent program.

Several areas do quite well

Public education is the prime example. The agreement calls for $2.5 billion in additional spending — so school spending will total $23 billion over two years. And the goal is to build the extra money into the budget for the long-term. 

A proposal that is set for release Monday will show how much would be put on the flexible, per-student formula or how much is directed to specific school programs. Lawmakers have already committed about $200 million per year to free school meals in a bill the governor signed this month.

House Speaker Melissa Hortman, DFL-Brooklyn Park, said the expectation is that the final budget will automatically boost school funding by a measure of inflation in future years so they don’t lose financial ground. 

“All of us share the position that we will be linking the funding increases in the future to inflation,” she said at a news conference alongside Walz and Senate DFL leaders. 

Housing and rental aid programs get a mostly one-time $1 billion bump. Public safety initiatives would see a major infusion, too.

And there is money to launch the paid family and medical leave program that’s a top Democratic priority.

Person sits at a table and signs
House Speaker Melissa Hortman, DFL-Brooklyn Park.
Kerem Yücel | MPR News

Not all DFLers are on board with the deal their leaders struck.

It’s not unusual to hear griping from committee chairs who feel like their area got shortchanged.

The amount set aside for tax relief in the next two years is $3 billion, which is lower than even some Democrats hoped for. 

One important point: If lawmakers approve tax credits, exemptions or other rebates that reduce what taxpayers ultimately owe, that counts as spending. Billions of dollars in tax relief will make the budget bigger. The only way around that is through reduced tax rates so the state doesn’t collect it in the first place.

Sen. John Hoffman, chair of the Human Services Finance Committee, hasn’t been hiding his disappointment over a spending target that he says will make it harder to prop up the long-term care industry and raise wages for care workers. 

“When you look at our desperate needs in the state of Minnesota for the people that are most vulnerable, I gotta tell you sometimes I feel there's a story of this guy named Job and sometimes I feel like I'm Job,” said Hoffman, DFL-Champlin. 

In the Bible, Job had devout faith in God and believed he’d be taken care of. He endured a period of suffering and temptation. But the moral is he persevered.

These budget frameworks can and do change and Hoffman hopes he’ll be able to get a larger share still.

Senator John A. Hoffman (DFL) District 36 expresses his support.
Sen. John Hoffman, DFL-Champlin, walked out of the Capitol to express his support for the extension of the DED program at a rally on the steps in St. Paul on March 26.
Courtney Perry for MPR News | 2018

Republican Party leaders at the Capitol have widely panned the framework

They say the spending is excessive and would grow government too fast. And they’ve criticized the level of tax cuts as meager in relation to Minnesota’s $17 billion-plus projected surplus.

“We’re sitting on a record surplus because we’ve collected more in taxes than we’ve spent. And we believe that low-income and middle-income Minnesotans really deserve some of that money back,” said Sen. Eric Pratt of Prior Lake, the top Republican on the Finance Committee.

Expect Republicans to focus a lot on the total price tag while DFLers frame their message about what Minnesotans will get out of the budget.

An exchange last week between Republican Rep. Pat Garofalo and DFL House Ways and Means Chair Liz Olson previewed the messages that will be on repeat in the weeks ahead.

“How can you and the DFL justify a 40 percent increase in general fund spending?” Garofalo asked.

“What we have in front of us tracks with the February forecast and we spend within we balanced,” Olson replied. “We have a balanced budget in front of us and we have that based on the information we had in the February forecast.”

Garofalo, of Farmington, persisted: “Would you categorize this budget as sustainable?

Olson, of Duluth, said it would be. “With all the information we have in front of us we have a balanced budget and use what you see is what you get in this budget.”

Two men talk at the Capitol
Gov. Tim Walz, left, and Sen. Eric Pratt, R-Prior Lake, talk to reporters after a meeting in 2019.
Tim Pugmire | MPR News
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