It was like a baseball game, only backwards. They started with the final score and then worked in reverse, inning-by-inning.
That’s essentially how the Minnesota Legislature is ending its 2019 session. The final score was decided Sunday night when Gov. Tim Walz, House Speaker Melissa Hortman and Senate Majority Leader Paul Gazelka agreed on a $48.3 billion budget for the next two years, and on how that total would be divvied up among 10 different conference committees.
Once those “targets” were decided — two weeks after a self-imposed and obviously optimistic deadline for such agreements passed (and one day before the constitutionally mandated end of session) — those House-Senate conference committees got together to agree on how to spend their allotment. At least according to publicly declared intentions.
And since this is Minnesota, where the single-subject clause of the state Constitution is considered less a requirement than a vague guideline, those same bipartisan committees would also have to decide which of dozens and dozens of policy bills might remain inside the omnibus bills as well.
All of which means not much was accomplished on the final day of the 2019 Legislature. Leadership tried to create a deadline of 5 p.m. for the conference committees to finish their work, but most treated the deadline as a well-meaning suggestion, and none came close to finishing by then, though the higher education budget did get approved just before 11 p.m. And though the agriculture, rural development and housing omnibus bill reached the floor just before midnight, when the regular session is required to end, Republicans objected and time ran out.
As Senate Minority Leader Tom Bakk put it: “This session ended with a whimper.”
Because of a secretive, closed-door process that featured Walz, Hortman and Gazelka seemingly making all the decisions for the 199 other officials in the House and Senate, much talk on Sunday was of empowerment and transparency. To that end, Hortman asserted that the conference committees, with input from Walz’s commissioners, would be making the big decisions. And those decisions would be made in public, she said.
But on Monday it appeared that many of the big decisions were happening at the committee chair level — not where the public could watch or even where the meetings could be recorded. Hortman said a special session would be needed “to finish processing the agreements,” but there wasn’t much to indicate, as least not publicly, that many agreements were near. And by Tuesday morning it was emerging that the govenor and the leaders were making the hardest decisions themselves and giving orders to the chairs.
“In some places it’s happening, in other places it’s not,” Gazelka said of a public process. “It’s harder than you can imagine. We want to be transparent and each time we say, ‘What can we do to make it more transparent?’”
He said earlier deadlines for agreements did help, even if they didn’t meet them. “But then you come back to the very, very end where it’s psychology. It’s how do you get to the end and how do you ask somebody to dare to give up something that somebody around them might say is terrible.”
A clause in the May 19 accord noted that, “Any policy and finance provisions included in a final conference committee report must be agreed upon by the Governor, Speaker of the House, and Senate Majority Leader.”
When the leaders were asked if they were going to have each of the conference committees come to them and make their case and get a vote, Hortman laughed off the question.
“This is just a statement of reality in how a bill becomes a law. It’s a little Schoolhouse Rock,” she said. “Sen. Gazelka does not need to bring a bill up in his chamber that he doesn’t agree with and I do not need to lift a bill up off the dais that I don’t agree with.”
Hortman also said the House would not pass bills that the governor doesn’t want to sign, and that there would be “very few disputes that would come back to this level,” she said in reference to the leaders and Walz, even though there are hundreds of policy items in dispute in those bills.
“Democracy is messy,” Walz said.
Yet on Monday evening, Walz, Gazelka and Hortman did indeed sit in a room — the governor’s cabinet room — and brought in the conference committee chairs in pairs to meet behind closed doors. As she approached the room, nicknamed “Leader Court” by some members, Sen. Carla Nelson, the Rochester Republican who co-chairs the education conference committee, was asked if she was there to see the principal?
“That’s what it feels like,” she said.
The chairs of the environment conference committee — Rep. Rick Hanson, DFL-South St. Paul and Sen. Bill Ingebrigtsen, R-Alexandria — said they simply briefed the triumvirate on where they were in talks and what issues remained. “It’s good to have the bosses involved,” Ingebrigtsen said.
Hortman said the chairs are coming in to go over “things that were left vague in the agreement” between her, Gazelka and Walz.
“They’ve been coming in and asking for more direction,” Hortman said. “And the three principals have been trying to remember everything we discussed and make sure we give them all the direction we agreed upon together.”
The chairs are then free to “create in those spaces where we didn’t have an agreement.” And then they weren’t as “leadership directions” complete with initials from the big three began to emerge Tuesday.
Special session coming
With the session’s deadline for adjournment of midnight Monday come and gone, much of the work will now move to a special session, which raises its own issues. While some legislative work could done before a session convenes, would that unofficial work of committees be subject to the same rules and open-meeting requirements?
“We are pushing as hard as we can for people to do as much as they can in public,” Hortman said.
But the issue of public accountability is hardly the only thing unclear about a special session:
What will pass and what won’t? To be determined.
What might muck up the deal? Not sure.
When will the special session start? Thursday, maybe, but it hasn’t yet called by Walz.
How long will it take? A day. Or two. Or three.
What might live and die in all of those omnibus bills? Stay tuned.
Gazelka revealed one of the practical and political reasons the leaders wanted a Thursday session to be completed quickly. The three-day Memorial Day weekend begins Saturday and not only do members want the time with family and friends, the leaders fear they will also hear from the lobbyists and activists.
“That’s part of the reason we wanted to get it done early,” Gazelka said. “It doesn’t matter whether you’re Democrat or Republican, there are going to be people who are not happy that you didn’t do what they expected you to do. That is a concern. I think both sides would say that’s a concern.”
House Majority Leader Ryan Winkler, DFL-Golden Valley, put it another way: “You’ve got to close the deal when you have the deal on the table.”
Walz said the plan now is to convene a special session Thursday and that he thinks it could be finished in a day. “But I’m more concerned that we get it right,” he said. “I do think it’s important to button this up relatively quickly. But if we have to go to Friday, we go to Friday.”
How the deal came together
The concession that made the three-party deal come together was one Gazelka said his caucus members weren’t happy about: the continuation of the medical provider tax. That had long seemed to be a non-negotiable item for the GOP. Continuing the provision, which Republicans often referred to as the “sick tax,” beyond a 2020 sunset would increase the cost of health care, they said, something they pledged not to do.
Gazelka didn’t even win a new sunset a few years out, something rumored but not realized in the deal. Cutting the rate from 2 percent to 1.8 percent is something for the GOP, but not much without a new sunset. The tax can now live into perpetuity unless some future Legislature repeals it.
“That was the thing that I had to accept,” Gazelka said. “In the end, both the governor and myself and the speaker looked at each other and said without that it will lead us to a place that would be really bad for Minnesota.”
Walz celebrated the preservation of the provider tax. “I can’t stress enough, the sunset is gone forever,” he said. “This gives us clarity.”
But Walz and Hortman gave up on the gasoline tax and other tax increases for the Twin Cities that could have boosted transit funding. Republicans also blocked DFL hopes for a $1.3 billion general tax hike, much of which would have come from businesses, especially those that have moved profits to tax shelters in other countries.
The tax bill is the place where a lot could still happen in a special session. Or not happen. Conforming to federal tax code changes would produce a lot of new revenue for the state, specifically because of the elimination of tax credits and deductions in that code. The state will re-adopt many of the those but will also “spend” that money in tax cuts and tax expenditures so that the bill is revenue neutral.
For example, the bill could include increases in local government aid and county program aid that Walz wants but the Senate didn’t include. Walz said Monday that more money for aid was part of the deal, though it wasn’t included in the written agreement between the three leaders. It could also potentially include new tax credits for donations to scholarship funds to help low-income children attend private schools.
One item that it must contain, according to the agreement struck Sunday, is a tax-rate reduction for middle-income Minnesotans. Walz said that was something Republicans can tout as a victory, since such a cut hadn’t happened in 20 years.
Walz said Monday he rejects the political strategy of holding out for everything in the hopes that it will lead to controlling both chambers of the Legislature after the next election. While he did say the DFL will work toward that (“We plan on being here seven more years. We have the House and we’ll have an election next year that people can decide”), he said he didn’t want to wait. That’s why he got what he could this year and will fight for the rest in coming sessions.
“This idea that you’re gonna wait it out until you have everything?” he said. “I was not interested in that.”
Room for Daudt
In legislative bodies like Minnesota’s, lawmakers are either in the majority or they are an afterthought. The state constitution, however, gives power where partisan majorities don’t, in that it requires supermajorities for passage of certain laws. One of those instances is in the sale of state bonds, the way much of state construction is financed. Because a bonding bill was part of the budget deal, House Minority Leader Kurt Daudt and Senate Minority Leader Tom Bakk will now be needed to wrangle their respective caucuses.
For his part, Daudt is not happy with the deal his fellow Republican Gazelka cut with the DFL. He is especially unhappy with the rebirth of the medical provider tax. “We were pretty clear the No. 1 issue we didn’t want to happen was the provider tax,” Daudt said. “I was mad earlier in the week when I heard this rumor that it was going to be a 1 percent tax with a two year sunset. I thought that was bad.”
At the very least, the minority party can talk and talk about bills that come up for passage, making a quick session difficult. But Daudt and Bakk can also use the bonding bill to do more than talk. Daudt and his caucus Monday suggested something they would try to win: no reductions in state reimbursements for nursing homes. Under a Walz administration proposal, homes that continue to get low quality scores would get lower reimbursements under the state’s value-based reimbursement formula.
Said Daudt of that reasoning: “If they’re going to get low-performing nursing homes less money and higher-performing nursing homes more money, let’s do that with our schools. They would never do that. What they’re doing is a $65 million cut to nursing homes that they’re trying to cover up and make it look like a reform.”
Walz said he hopes House Republicans won’t try to block or delay the rule, either with their votes on bonding or by procedural delays. “For them to now be on the side trying to interfere is their right, but there will be repercussions for that,” Walz said.