The Minnesota Legislature is in the final stretch of its regular session, with a busy week of shepherding budget bills through committees before they hit the floor for final votes.
The GOP-led Senate and DFL-led House have approached a $1.6 billion budget surplus with vastly different and competing visions: Republicans want to cut taxes by $591 million, while Democratic-Farmer-Labor Gov. Tim Walz and his allies in the House want to raise taxes on the wealthiest Minnesotans, generating an estimated $564 million in new revenue in the upcoming biennium, as well as other tax increases.
Republicans also are calling for budget cuts to state government operations, which DFL leadership have decried, saying the pandemic has shown the need for state government workers who process unemployment benefits and conduct COVID-19 contact tracing.
Left to be determined is the full impact of the American Rescue Plan Act dollars flowing into the state. Roughly $2.6 billion will go to the state government, while billions more will flow to local governments, as well as higher education, E-12 schools, and the state’s COVID-19 response.
In addition to the wide ideological gulf, the 2022 election could also derail a smooth finish. Senate Majority Leader Paul Gazelka and his GOP colleagues Sens. Michelle Benson and Carla Nelson — among others — may be mulling a run for governor against Walz, whose reelection campaign is already informally underway. Any Republican who is seen capitulating to — or even compromising with — Walz could face dire prospects with Republican primary voters.
As the budget picture comes together, here is where lawmakers stand on a range of issues that have yet to be resolved.
SAFE Account for law enforcement mutual aid
The murder trial for ex-Minneapolis police officer Derek Chauvin is well underway, with downtown Minneapolis resembling a militarized zone. Various law enforcement agencies planned for weeks for security preparations without yet knowing whether state funding will be available to reimburse local police departments for their manpower and equipment to help prevent any rioting or unrest. Walz had initially proposed the creation of a $35 million fund for security expenses during the trial, but Republicans proposed an alternative, approving a $20 million fund that would be overseen by a panel of police chiefs and sheriffs.
House DFLers failed to pass the governor’s bill, partly because of objections from some Minneapolis-area representatives who opposed giving law enforcement millions of dollars without policing reforms to go with it.
House Speaker Melissa Hortman, DFL-Brooklyn Park, said on Monday that negotiations on the bill had come to a standstill.
Sexual assault law change likely coming
There was widespread, bipartisan outcry after the Minnesota Supreme Court recently ruled that a person cannot be found guilty of third-degree sexual criminal sexual conduct for assaulting a person they know is mentally incapacitated — if the victim voluntarily drank alcohol or ingested drugs.
A bipartisan group of lawmakers are moving legislation to close this so-called loophole, as well as change the state’s sexual assault laws to strengthen protections for victims.
“We have time to address the Supreme Court decision and provide victims the legal protection they deserve,” state Sen. Warren Limmer, R-Maple Grove, said in a statement after the court decision. Limmer, chair of the Senate Judiciary and Public Safety Committee, said his budget bill will include language closing the loophole.
Christopher Columbus statue reinstallation?
Last June, Native activists toppled the statue of Christopher Columbus from the state Capitol complex, leading to a felony charge against one of the demonstrators.
Senate Republicans want to repair and re-install the statue in its original place, despite objections from Native Americans who say Columbus should not be honored because of his role in the murder and enslavement of Indigenous people.
State Sen. Bill Ingebrigtsen, R-Alexandria, has drafted legislation that is now part of the Senate GOP’s state government budget bill. It would cost an estimated $154,000 to repair the statue.
The House state government budget bill does not include a provision similar to Ingebrigtsen’s bill, making it uncertain whether a compromise will be reached on the contentious issue.
State tax exemptions on jobless benefits, Paycheck Protection Program loans
Lawmakers have agreed to exempt from state taxes Paycheck Protection Program loans that businesses received to help weather the pandemic and keep workers on their payrolls.
House and Senate Republicans want to extend the tax cut for all businesses, including those who received the largest loans, some of which reached $10 million. The House DFL plan aims to target that relief to smaller loans, which represented the bulk of the lending. More than 100,000 Minnesota businesses received PPP loans, including many Minnesota lawmakers.
Minnesota has extended its tax filing deadline to May 17, the same day the Legislature is expected to adjourn its regular legislative session.
Unemployment benefits also stand to be taxed by the state unless lawmakers act. Lawmakers of both parties agree on this, aiming to exempt up to $10,000 in jobless benefits from state taxes.
Walz emergency powers ending?
Senate Republicans have voted several times to end Walz’s peacetime emergency declaration, arguing that the executive branch has had too much power for too long. Although Minnesota remains at high risk for another COVID-19 spike, the state has amassed protective equipment, testing supplies and completed other preparedness measures while vaccine administration continues apace.
On Monday, Hortman, whose DFL-led House has supported Walz, signaled that this summer the House might move to scale back some of the governor’s emergency powers.
After the Legislature’s May 17 adjournment, Hortman said Walz should continue to have power to run the state’s vaccination and testing efforts to manage the winding down of the pandemic.
“There might be a couple other key powers that he needs to continue to exercise, and I think we could scale them down, but Minnesotans have the fate of the state in their hands with whether they continue to behave in a cautious manner,” she said.
House Majority Leader Ryan Winkler, DFL-Golden Valley, said putting lawmakers directly in charge of managing the pandemic could lead to a slower response if partisan politics get in the way.
“If Republicans are willing to be responsible and actually be negotiating and working with us in good faith in a timely manner, we want to work with them,” he said Monday. “But we are not going to hand over responsibility for the health and safety of Minnesotans and our economy to people who just want to score political points.”