The 2021 legislative session came in like a lion and went out like a lamb.
When lawmakers first returned in January to hash out a new two-year budget, they faced a projected deficit of $883 million, a divided Legislature and a herculean vaccination effort that would shape the trajectory of the COVID-19 pandemic.
In a matter of months, Minnesota’s fortunes would drastically change, largely boosted by the federal American Rescue Plan Act that funneled billions of dollars into the state in the form of stimulus payments and federal aid to state and local government. The deficit swung to a $1.8 billion surplus with nearly $3 billion from the federal government helping shore up Minnesota state government.
On Monday, designated by law as the final day of the 2021 legislative session, DFL Gov. Tim Walz and leaders of the Republican-controlled Senate and Democratic-Farmer-Labor majority House announced a broad budget deal that focused solely on the numbers. They put off debate until later thorny policy issues like policing and tougher automobile emissions standards. They said they will return in a June special legislative session to finish the work. If they can’t figure out the fine print and pass the agreed upon broad outlines into law by June 30, a partial government shutdown begins.
Here are some takeaways from a legislative session unlike any other.
Status quo budget leaves no clear winners
Walz earlier this year unveiled a series of tax increases he said were necessary to address the state’s vast economic disparities worsened by the pandemic, including a new fifth tier income tax bracket on Minnesota’s wealthiest. He also proposed raising the corporate tax rate and other changes to the tax code.
House DFL leaders backed many of those tax proposals, sought to legalize recreational marijuana, and pass a number of new police reform and accountability measures.
Senate Republicans, meanwhile, pursued a number of policy proposals, including Voter ID, a rollback of proposed tougher car emission standards and an end to Walz’s emergency powers he’s retained for a year to deal with the pandemic.
In the end, the final budget agreement included none of the controversial policy issues the two parties have been debating for months. It includes no new taxes, but it also increases education spending modestly and far above what Senate Republicans had sought. Walz, the DFL House and GOP Senate will have to push for their priorities another day.
The House Democrats’ leader said she was satisfied. “I would say we celebrate each other’s wins because there’s a lot of common ground,” said House Speaker Melissa Hortman, DFL-Brooklyn Park. “I think that this is an agreement that serves all of us. I don’t think that there’s anything in the agreement that we, as House Democrats, don’t like.”
Federal aid props up state budget
Minnesota received more than $2.8 billion in federal COVID-19 relief funding, which factors heavily in the $52 billion budget Walz and legislative leaders set.
Walz will get to control about $500 million of the federal aid as he manages the winding down of the state’s pandemic response. His administration has been coordinating the state’s vaccination program as it pushes to raise the state’s vaccination rate to 70%. The remainder of the federal money will be controlled by the Legislature, according to the budget agreement reached.
The hitch: The federal funding is all one-time money.
Once it’s spent, programs funded by the COVID-19 relief will disappear unless the Legislature acts to extend them. That includes summer school programming intended to address learning losses caused by the disruption to schools during the pandemic.
Police reform measures on the brink
Under the budget agreement, June 4 is the deadline to finalize language on any new policy changes that will need approval from both legislative leaders and the governor, leaving just 18 days for the House DFL and Senate GOP to bridge massive differences in efforts to approve new police reform measures.
Senate Majority Leader Paul Gazelka, R-East Gull Lake, on Monday said his caucus would “remain committed to not passing anything that is anti-police or makes the job of law enforcement more difficult.”
He said he opposed proposals to end qualified immunity for police officers, which could make officers personally liable for civil rights violations that occur in the course of doing their work. He said he also opposes the creation of civilian oversight boards with investigative powers.
House Democrats, however, say the recent killing of Daunte Wright by ex-Brooklyn Center police officer Kim Potter demonstrates a need to end certain practices like so-called pretextual police stops. That’s when a person is pulled over for a minor violation with the intent to search their car for contraband — a practice that disproportionately affects Black Minnesotans and has led to deadly encounters like in the Wright case.
It’s unclear how a lack of police reform included in the final public safety budget bill would land with progressive members of the House DFL caucus, who previously withheld votes on a Walz proposal to pay for law enforcement costs during the Derek Chauvin murder trial.
Legislating by Zoom sucks the life out of Capitol
COVID-19 pandemic protocols meant that lawmakers worked mostly remotely for much of the session. With 134 members, the Minnesota House resembled a massive conference call when it met for floor sessions, with some state representatives at times forgetting to mute their lines, interrupting debates with unintended background noise. The Minnesota Senate, with only 67 members, was able to have more of its members on hand for floor debates, though many voted by proxy, their votes read into the record by colleagues.
“Weird,” is how state Sen. Scott Dibble, DFL-Minneapolis, summed up the session.
The final day of the session was quiet. Few members attended in person, and there were no members of the public or lobbyists congregating in the hallways and rotunda to monitor the floor votes and share the latest political scuttlebutt.
Unlike previous budget-setting sessions, the Capitol was largely empty and sat behind a fence, which kept out the public. The fencing was installed to protect the Capitol from potential unrest last summer, as well as security threats in January from pro-Trump extremists who sowed chaos during an attempted insurrection in Washington, D.C. that included threats to many state capitols, including Minnesota’s.
Legislative leaders say the fencing will come down soon, and the public will be allowed in the Senate and House chambers next month.
Minority caucuses disappointed with outcome
The House GOP and the Senate DFL were not part of the final budget negotiations. That’s life in the minority party. On Monday, disappointment reigned among members of the minority caucuses.
House Minority Leader Kurt Daudt, R-Crown, took aim at the agreement to let Walz control half a billion dollars in coronavirus relief funds.
“Who from the legislative branch would ever agree to let the governor spend $500 million on whatever he wanted should turn in their election certificates and find a new job,” Daudt said, in what could be interpreted as a veiled shot at his Republican colleague Gazelka.
Other House Republicans criticized a provision of the global budget agreement struck by Walz, Hortman and Gazelka, which says no policy provisions will be included in final budget bills without previous agreement from the governor.
“The governor now has to agree with all policy and finance prior to the bill being transmitted to him for signature or veto,” state Rep. Jim Nash, R-Waconia, tweeted. That “makes the legislative branch irrelevant in many ways. His view on policy and finance bills is the veto if he disagrees.”
State Sen. Patrica Torres Ray, DFL-Minneapolis, criticized Senate Republicans for the outcome of the session.
“I have never seen this in my last 15 years in the Senate,” she said. “The takeaway is that Minnesotans need to pay attention to the consequences of electing a divided Legislature. The political polarization in the state is restricting our ability to govern, and that needs to end.”