With six weeks to go in Minnesota’s legislative session, DFLers who narrowly control state government with their first “trifecta” since 2014 have a list of early accomplishments such as cementing abortion rights in state law and passing a carbon-free energy mandate.
But Democrats also have plenty of unanswered questions left to address, starting with the Big One: how, exactly, they plan to spend a Paul Bunyan-sized $17.5 billion surplus when writing the next two-year state budget.
In the last two weeks, House and Senate committees began releasing dueling budget proposals outlining potential spending on issues like public safety, child care, human services, climate change and the environment. Those plans have similarities but also major differences that will need to be ironed out.
After lawmakers return on Tuesday from a short break for Easter and Passover, they will reveal their closely-watched tax plans and start to negotiate over what can actually pass the Legislature and reach the desk of Gov. Tim Walz.
Democrats are likely to approve some form of rebate check for taxpayers, a tax credit aimed at families with young children and at least reduce a state tax on Social Security benefits. Among the thorny issues that are still in flux: tax increases for transportation and housing, a paid family leave program, legalizing recreational marijuana, sports betting, bonding for construction projects, gun regulations and more.
The regular session must adjourn by May 22. Walz and legislative leaders have all said they expect to finish their work by then.
Budget and taxes
Minnesota has a record surplus of $17.5 billion (in a state with a budget of around $26 billion a year) and could even have a $19 billion surplus if changes to how inflation is accounted for weren’t made between the December revenue forecast and the February forecast. Gov. Tim Walz and DFL lawmakers who write budget plans are deciding how to spend it with two key factors in mind — fulfilling commitments made to increase support for education and low-income families and acknowledging that much of money is available this budget period but not next budget period.
Large increases in spending have been set aside for public education, housing, social services and tax cuts. Walz continues to push for tax rebate checks and both he and DFL lawmakers are pushing for targeted tax cuts aimed at helping low and middle income families and people with children.
The record surplus does not mean DFLers are not considering tax hikes with most meant to provide ongoing money for transportation and housing. There is also a proposed new payroll tax to pay for paid family and medical leave insurance. New taxes on recreational marijuana and would only raise enough to cover the costs of regulation and enforcement.
The two tax committee chairs will not present their proposals until after the break.
Transportation
House and Senate transportation chairs have produced budgets that contain the largest increase in revenue for roads, bridges and transit since a 2008 increase that needed a bipartisan override of then-Gov. Tim Pawlenty’s veto. The budgets include Increases in car tabs fees, motor vehicle sales tax rates, a new retail delivery fee and a 0.75% sales tax increase in the seven-county Metro that would raise around $1 billion a year. These are meant to respond to declines or flat growth in taxes devoted to transportation at the same time that general taxes are producing record surpluses.
- The package delivery fee of 75 cents is being altered to exempt very small businesses and allow retailers to cover the fee without charging customers. It is in the House and Senate transportation omnibus bills. Another fee on rideshare trips has been deleted from the bills, though could make a reappearance next session.
- There doesn’t appear to be majority support to change the troubled Met Council from a board appointed by governors to one elected by voters in the Twin Cities region. But a task force is likely to be created that could recommend such a change to future Legislature. Another idea still being considered is to create a charter commission to craft a home rule charter for the regional government that could include an elected council. That charter would then go to voters in the region for adoption.
- Two proposals to address crime and safety concerns on light rail transit vehicles and platforms would work together in sequence. The first would create intensive, high-profile and temporary teams of police, social workers and homelessness advocates to work to get help for those who need it and enforce a code of conduct on violators. Then, new civilian transit staff — called TRIP personnel — would take over fare enforcement from police and serve as helpers to riders and eyes and ears for transit police. Both are in the transportation omnibus bills.
- Both budgets set aside $50 million in one-time funding to help build a passenger rail line between the Twin Cities and Duluth called the Northern Lights Express.
Social Security tax
Key Senate DFLers say that eliminating a state tax on Social Security will be part of their tax budget plan passed by the chamber, but House Democrats may prefer a smaller cut to the tax to avoid giving some benefit to the wealthy. This unresolved issue will be one fierce point of debate between DFLers as they negotiate a final two-year budget. Gov. Tim Walz and top legislative leaders don’t like the idea of a full repeal, but many DFL legislators in critical swing districts do.
Local Government Aid & County Program Aid
House DFLers included $100 million in a budget plan for each of two state subsidies to help city and county governments with basic costs and help limit property tax increases. Local officials say Local Government Aid — which primarily benefits cities in Greater Minnesota — and County Program Aid have not kept up with inflation and have asked for more money. The Senate has not released its plan yet, but Walz supports a boost and so the aid programs are likely to get extra money.
Bonding
Minnesota DFLers have pledged to spend cash on a nearly $2.3 billion package of construction projects. Normally, the Legislature might borrow money for capital investments on things like roads, bridges and wastewater infrastructure. But that requires a 60% supermajority vote in the House and Senate, and minority Republicans in the Senate already rejected a bonding bill because they first want elimination of a state tax on Social Security benefits. Cash needs only a simple majority, allowing the DFL to move ahead without Republican votes. However, it’s possible legislators will compromise on a bonding bill in the end. That would free up more money from the surplus to use on other priorities.
Energy
House and Senate DFLers are poised to spend money from an unusually large energy and climate budget on a smorgasbord of incentives for clean energy technology like electric vehicles, electric school buses, and home heat pumps. They still have significant differences to sort out on major policy questions like a requirement for electric utilities to build a certain amount of energy storage and whether to study the future of nuclear technology in Minnesota.
Recreational marijuana
House and Senate bills to legalize recreational marijuana and fill regulatory gaps in last year’s hemp-derived edible legislation have moved through multiple committees and should come to votes after the break. Several changes have been made to respond to concerns that the bills did not distinguish between federally illegal marijuana and federally legal hemp products. The bills now provide local governments more authority to enforce state rules and to collect some licensing fees to cover costs.
The tax rates and license fees are designed to cover program costs — around $100 million a year — and not raise general fund revenue. “No pot for potholes,” said Rep. Zack Stephenson, the Coon Rapids DFLer and prime House sponsor. The bills are standing alone and are not in omnibus bills.
Sports betting
Standalone bills to legalize wagering on college and professional sports were introduced by the chairs of the House and Senate committees and while they have had a few hearings, the issue has gone quiet. While they could be waiting for work on budget bills to be completed, there is still some concern by supporters that votes in the state Senate are still short.
The bills would give all of the action to the state’s tribal nations that already have casino gambling. Only tribal casinos can offer sports betting in person. Any gambling there would not be assessed any state taxes. But tribes can also contract with national sports books like DraftKings and FanDuel for online betting via mobile devices. Those bets would be assessed a state tax. But sponsors say it will be enough to cover costs and put some money into problem gambling and youth sports but not raise money for other state functions.
Medicaid “unwinding”
The House and Senate have passed a bill to smooth the end of special Medicaid rules imposed by the federal government during the pandemic. In return for increased federal payments, the states could not remove anyone from the program as long as the public health emergency was in affect. But that emergency is ending and states must now not only start checking new applicants for eligibility but go back and make sure all 1.5 million Minnesotans on the program still meet income requirements.
Some estimates are that between 100,000 and 300,000 residents could lose coverage. The bill pays for the staffing needed to review all those clients but also to provide money for MinnesotaCare to provide a place for those who lose Medicaid to find new plans.
Walz signed the bill last week.
Housing
House and Senate housing chairs received one of the largest budget targets of any area of the state budget and far more than they have received the last several budget periods — $1 billion. The budgets, mostly one-time money, boosted funding for bonds to renovate existing public housing,bonds to partner with affordable housing providers for new units, to invest in maintenance of housing that is affordable but not part of public programs called Naturally Occurring Affordable Housing and to greatly expanded rental assistance and down-payment assistance.
The first $50 million in rental assistance was passed to Walz already, with another $50 million in the housing omnibus bills.
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The committees have also approved a new quarter-cent sales tax in the seven-county Met Council region to provide ongoing money for city and county affordable housing programs and projects.
Abortion
Minnesota lawmakers moved quickly to pass legislation that cemented the right to an abortion in state law, backing up a state Supreme Court ruling outlining that right in Minnesota’s Constitution. But other bills may be less likely to pass. The status of a high-profile bill that would repeal many restrictions on abortion — limits that are already defunct because of court rulings — is uncertain. The measure would also eliminate a law requiring health officials to collect and publicly report data on abortion. Another bill aimed at creating legal protections for people who come to Minnesota for an abortion has passed the House but not the Senate.
Broadband
Legislators have agreed to spend an extra $100 million to help build new infrastructure for high-speed internet in rural areas. That’s a historically large amount of state money for broadband, but it was less than some developers, local officials and broadband advocates had hoped. Nearly $1 billion is on its way from the federal government, but the state cash could help keep construction moving in the meantime.
Race and health equity
The governor’s budget proposal included several health equity initiatives, some of which appear likely to pass.
Omnibus budget bills released by House and Senate leaders include a home visiting program that would increase the number of families that receive home visit services – which have been found to improve child and maternal outcomes. The Senate proposed $20 million for this, while the House plan includes $5 million.
House and Senate DFLers have also proposed, although the amount of money differs, a “Healthy Beginnings, Healthy Families” program that aims to address early childhood health outcomes through greater access to screenings, mental health services and education.
Other points of agreement include funding an HIV Prevention and Equity initiative, a program to monitor the impact of long COVID and support survivors, an establishment of an Office of African American Health and the continuation of funding for the Office of American Indian Health.
Fentanyl penalties
After a partisan divide in the last few legislative sessions, lawmakers on both sides of the aisle appeared to have reached a deal last month on a proposal that would increase penalties for fentanyl possession to align with heroin. The bill would add threshold numbers for pills, making it easier for law enforcement and prosecutors to put away distributors.
The bill — authored by a GOP member in the House and its companion in the Senate by a DFL member — was heard in the public safety committees of both chambers. The bills are included in both the House and Senate public safety omnibus packages, but GOP Rep. Dave Baker hopes the proposal can be peeled off into a standalone bill and make it to the House floor after lawmakers return from the Easter-Passover break.
No knock search warrants
A proposal to ban no-knock search warrants is making its way through the Legislature after years of failed attempts by DFL lawmakers to outlaw the controversial tactic. The push comes more than a year after a Minneapolis SWAT team entered a downtown apartment unannounced and fatally shot 22-year-old Amir Locke in less than 10 seconds. The use of the warrants declined sharply after Locke’s death but racial disparities persisted.
The proposal to ban no-knocks is part of a public safety omnibus bill released by DFLers in the House, but is not included in a corresponding public safety plan in the Senate.
MPCA Citizens’ Board
House DFLers are likely to pass a measure to reinstate a citizens’ board to make permitting decisions in conjunction with the Minnesota Pollution Control Agency commissioner, an idea that has drawn support from environmentalist nonprofits but opposition from Republicans and agriculture trade groups. Senate Democrats, however, did not include the citizens’ board legislation in their “omnibus” bills, signaling it may not have enough support to make it to the desk of Gov. Tim Walz.
Child care
The House and Senate both appear poised to spend a major amount of money on the child care system in Minnesota, including by using more than $370 million over the next four years to significantly increase the reimbursement rate for the Child Care Assistance Program, a subsidy for low-income families. Legislators are also likely to put hundreds of millions into payments to increase the pay of child care workers and into Early Learning Scholarships, another program aimed at helping children from low-income families access high-quality child care. The Legislature also might approve new tax credits for parents but tax plans have yet to be released by the House and Senate.
Guns
The DFL agenda on guns is now far more narrow than what Walz had hoped earlier in the year, but it’s been clear for months that lawmakers with slim Democratic majorities could not pass certain regulations such as limiting the size of gun magazines. What still might pass are bills that would extend background checks to private gun sales and create a “red flag” law that allows a judge to seize a firearm from someone deemed a threat to themselves or others.
Restore the vote
Walz has already signed a bill to restore voting rights for most people convicted of crimes but who are no longer in prison or jail. Before the bill passed, formerly incarcerated people had to wait until all probation and parole was completed. The law could impact around 50,000 people.
The bills passed after the state Supreme Court rejected a lawsuit seeking to restore voting rights. The suit argued that because the impact of the previous law fell more heavily on people of color, it should be ruled unconstitutional under federal provisions requiring equal protection.
Ban the box
The Minnesota House passed a bill that would extend “ban the box” regulations to appointed positions on Minnesota’s boards and commissions, eliminating a law that asks applicants if they have a felony conviction. State law already bans this question for private employers and most public jobs as a criminal justice initiative. The Senate has advanced the bill through committees but not held a floor vote on the measure, although the legislation has support of the Senate Majority Leader.
Universal school lunch
Another early victory for DFL sponsors is legislation to spend around $200 million to provide free school breakfast and lunch for all students, not just those who qualify for federally funded meals programs. Waiving the requirement that school districts check income and submit funding requests was a pandemic-related change. But that provision ended with this school year and increased the pressure to restore universal lunch.
House lawmakers continue to work on a related problem: how to replace the free-and-reduced-price data collection with a new metric to measure poverty in schools and distribute around $700 million a year in money aimed at helping those students.
Paid Family and Medical Leave
This is one of the more-prominent issues that saw its chances change with the DFL power trifecta. DFLers introduced bills in the past to create an insurance program similar to unemployment insurance for workers who need leave when they become sick or injured or give birth. Leave would also be available for workers who need leave to care for a sick or injured loved one, including newborn children.
But those stand alone bills died in the GOP Senate but are moving this year and Walz has made it a priority. In order to get the program running more quickly – by July, 2025 — $668 million from the surplus will be used to frontload the program so benefits can be paid immediately, not after payroll taxes have collected enough to cover early benefits.
Drivers licenses for all
A bill already signed by Gov. Walz ends a 20-year ban on undocumented immigrants from receiving driver’s licenses — a ban that stemmed from the 9-11 terror attacks on New York City and Washington, D.C. Advocates for the bill said immigrants still drive for jobs or family reasons, but do so without licenses and without having to show knowledge of traffic laws and driver skills. They also drive in fear of arrest and prosecution. Law enforcement favored the change.
Immigrants without documentation can begin applying for licenses October 1.
MinnPost staff writers Mohamed Ibrahim and Ava Kian contributed to this report.
Editor’s note: This story has been updated to reflect that bonding bills require a 60% supermajority, not a two-thirds supermajority. This story has also been updated to correct that there are no exceptions for restoration of voting rights for those convicted of murder and sex crimes.
How refreshing. How enlightened. I am grateful to have a sensible, responsible, progressive attitude in lawmaking in the majority.
The opposition appears to be losing not only their volume and pitch, but their ability to do much but supply philistine austerity alternatives. They have no ideas, and are neither “conservative” nor team players.
Thanks to all who helped vote DFL into the Minnesota House.
Democrats, do all of the “one time spending” you want. There is 17 Billion there for you to dole out as you see fit. Please do not put in programs that can be funded this year from budget surplus, but taxpayer funded for the next 50 years. Every program that is tax payer funded moving forward will not be funded by state surplus but will be funded annually by taxpayers. The Federal Government will stop giving out “pandemic” payments in the Billions and Minnesota taxpayers will be responsible for paying these programs moving forward.
My favorite program to site the never ending stampede to the taxpayer trough is HUD. Every month there is a call for a new program to help with housing, taxpayer funded of course, here at Minnpost. My question is always, “isn’t that what HUD was supposed to do since mid 1960’s”? 100’s of Billions of taxpayer dollars have flowed thru HUD since then but yet a “new program” is needed every 2 months. It never ends so be careful with how you spend this surplus….. Today’s surplus is tomorrow’s never ending taxpayer burden.
I often wish conservatives wouldn’t get angry at helping the needy, instead getting angry at our wealth inequality, unlivable wages and unaffordable healthcare
Gene, I help immensely with those that can’t help for themselves, we all should. Where I differentiate from you is blaming wealth inequality on some systemic problem not the decisions the individual makes. Whether you are black, white, brown or purple your choices in life determine your future. If you make good decisions, get an education, get a skill that others need and want, learn how to work hard, learn how to be a good employee, learn how to be a good employer, you will succeed. That goes for everyone. Making excuses for folks who made poor decisions helps no one.
Why do so many who do all you demand still fail to find success? Why are all who work hard not billionaires?
I’m not sure that Mr. Smith has the answers to your questions, but I’m sure that you do. Please enlighten us . I have a hint as to why ALL people who work hard aren’t billionaires. If everyone were billionaires, it wouldn’t mean anything, but we could print the money and carry it around in wheelbarrows to buy a loaf of bread if that helps.
Ahhh…but Joe…even the many working hard struggle with poverty.
Yes…our wealth inequality has a strong bearing on we have so many impoverished.
And don’t get me going on healthcare and prescriptions. Not one person shouldn’t be able to afford either.
Actually, conservatives don’t get angry at helping the needy. In fact, conservatives are significantly more charitable than liberals. Christian conservatives are most likely the ones manning food shelves. Indeed, atheists are substantially less likely than Protestants and Catholics to report volunteering their time to charitable organizations.
https://news.gallup.com/poll/224378/religious-giving-down-charity-holding-steady.aspx#:~:text=There%20is%20little%20difference%20among,their%20time%20to%20charitable%20organizations.
Charity is a transaction designed to allow the giver the illusion that they are changing the behavior of those they feel superior to. It solves no societal level problem. Its no surprise that conservatives use it as cover for their role in creating the problems it purports to solve, as actual responsibility is anathema to the conservative worldview, performative “generosity” is all you know.
Charity is:
“the voluntary giving of help, typically in the form of money, to those in need”
“kindness and tolerance in judging others”
Not sure that I see your definition here but feel free to provide citations for your definition of charity. And I know that readers here realize that the second definition is so–not you. But it doesn’t apply to a majority of commenters here at MinnPost and that is what makes America great, freedom of expression.
Don’t need a citation. Do you give your charitable dollars to anyone who asks? I’m just gonna assume no, so please explain how you’re NOT attempting to use your dollars to create a given outcome on a matter you’ve CHOSEN. If you give with the expectation of a result for your giving, that isn’t charity, its transactional.
It does demonstrate that conservatives are more charitable than liberals.
The poll includes religious organizations as charities. While it’s certainly true that some religious organizations do good work serving those in need, it’s also true that some churches are little more than elaborate grifting schemes. The statistics do not distinguish between them. To be clear, if you choose to give your money to a megachurch pastor who needs a new boat, that is your choice. But I question whether it should be categorized as charitable giving.
It’s interesting hearing you claim conservatives help the needy. Many claim so and do so, but obviously it takes more than their efforts, otherwise we wouldn’t see so much poverty and homelessness.
Then we hear that the wealthy contribute the most to charity, such as them paying for a college building, museum, etc., something that provides no benefit to the poor.
You missed the entire point, again. The issue Minnesotans will have is when these programs are implemented into the budget without the surplus to pay for them. That goes to the taxpayers and Minnesota is one of the highest taxed states in the union. It is called being responsible and without some responsibility the State will soon look like California, 100’s of billions in debt.
You seem to still labor under the mistaken notion that anyone but delusional conservatives find comparison with the world’s fifth largest economy a perjorative. We get it, you’d prefer we resemble the third-world southern states. Us? Not so much.
Thanks for the very informative article, but the DFL does not have control of all three branches of government – only legislative and executive. It does have control of the house, senate and governorship. We knew what you were trying to say, but one last edit please.
Government exists to collect taxes and spend them in the public interest. Minnesota has done this well in the past and this shows for the extremely high quality of life ratings we achieve despite our challenging winters.
It used to be that this was done on a bipartisan basis. Republicans are welcome to resume doing this as much as they wish. That they are doing so on some of these issues is encouraging. If Minnesota is ahead of the rest of the country, it would not be the first time we have been trend setters. We do not have grandiose aspiration, but think “not so bad” is pretty great.
Wouldn’t want to go overboard and get all braggy, but a lot of things we do pretty well. We don’t like excuses.
See, that’s the problem with you people. You don’t understand the actual role of government. Government doesn’t “exist to collect taxes and spend them in the public interest.” Government exists to protect your constitutional rights. Period. Taxes are to cover the costs of doing that. But your statement is as succinct a description of the difference between democrats and republicans as I’ve ever heard, so congrats.
So, does that mean you are anti-defense, anti dept. of agriculture, anti interstate, etc. etc. etc. In case you forgot or never checked the reason the United States Government was established:
“We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.”
Or do you disagree, i.e. the founders got it wrong, this isn’t textual enough, something is out of context?
That’s not quite right. The federal government is defined by the constitution, part of which delineates the people’s rights. State & local governments are subject to their own charters and/or constitutions. Nowhere that I’m aware of defines the role of government to be solely limited to protecting our constitutional rights. To the extent that government does that, one mechanism is through taxation in order to fund the work organized by government. The problem with you people, to use your phrasing, is the demand for government to do its work without collecting the taxes necessary to fund it.
I agree, but $50M for Northern Lights passenger rail is a boondoggle.
So the DFL want to tax more (including the poor and middle class) and spend more?
Who could have seen this coming?
Did the DFL campaign on all these tax increases?
How much will get jammed through in the final minutes?
The DFL has the majority. These must be all policies they don’t have the votes on otherwise, they’d be passed.
Well the lunch is not free unless it is dropping out of the clouds from heaven, seems folks struggle with the truth, taxpayer funded! Also find it interesting that they want to kick up tab fees at the same time they don’t want to enforce stopping folks with expired tabs in Minneapolis etc. (make the responsible pay more to cover the irresponsible). Not sure limiting no knock warrants is part of a safety package, maybe more like a less safe package. Sure would have thought a pot tax could generate some income, sure does seem to in the states that have already legalized it. Gambling, why wouldn’t we want to generate some revenue, like the lottery, this is a voluntary tax?
“Not sure limiting no knock warrants is part of a safety package, maybe more like a less safe package.”
Unless you’re the guy getting gunned down in the raid. Did you not hear about the guy in new mexico this week that got killed by police who responded to the wrong address? What’s with conservatives’ inability to understand that police are fallible? When the evidence shows they abuse their authority, we have to rein in their authority. If they always got it right, there wouldn’t be an issue with no-knock warrants. But when they gun down an innocent man – and the perp they were looking for wasn’t even there – it’s pretty clear there’s a problem.
You forgot all the folks that OD’d on Fentanyl or whatever, or the murder’s that are hiding behind the door, so evidently the victims etc. don’t count in your book! You don’t go after no knock warrants to collect on parking tickets! And of course Mr. Locke brandished a gun, not a smart thing to do. And then again there are kids that walk down the street and get executed because? You need the list? Appears your point is, give all the bad guys as much latitude as you can, while the victims and the general populous get the terror! You know like the lady that took 5 rounds up in Brooklyn Park. She should not have been in her apartment with her kid when there are < 25 year old gang banger's wondering around working on a hit job, for some other thug. Sorry to give you the bad news, there really are some bad characters out here. Who should get your sympathy, the victims or the perpetrators? Suppose they knew where the hit guys were, but hey, can't go after them, need to wait until you can catch them in the act on their next hit job? Guess that sounds pretty rationale to some folks. And who of us " always got it right"? Congratulations, you would be the first in my recollection of my 72+ years on the planet.
It’s obvious the Democrats new go to revenue stream is sales tax and user fees.
My favorite is the transit tax giving the Met Council taxing authority. The excuse is lower gas tax and motor vehicle sales tax revenue during Covid and a chip shortage for new car production. Now we create the seven metro county forever transit tax. This and the housing sales tax is a total of 1% , meaning Ramsey and Hennepin county will have a sales tax over 9%. For an estimated $600 million annually we will create more unnecessary transit programs that will only cause Metro Transit to lose more money than it already does. How long before this is used to bail out Hennepin Counties SWLR disaster ?
This should mean that 100% of the Motor Vehicle Sales Tax should go to roads vs using 40% of it to bail out Metro Transit’s annual operating losses. But it won’t.
So your plan is for the 14th or 15th (not sure on the exact ranking) largest metropolitan area in the United States to just not have public transit of any kind? That seems smart.
The issue isn’t a lack of transit it’s a lack of people that want to use it.
Taxing people more isn’t going to change that.
PS: Whether we like it or not there are some bad ass folks out there and we either deal with them or they will deal with us as they see fit! Choose, or ignore and suffer the consequences, you know like the cartels in Mexico and central America.