With less than two weeks before it’s required to adjourn, the Minnesota Legislature is starting to see what the end of the 2020 session may look like.
And like the session itself, it may look different than any other that came before.
Instead of bargaining over budget and taxes or which partisan policy priorities might end up in the massive omnibus bills that have dominated the conclusion of previous sessions, GOP and DFL leaders and Gov. Tim Walz this year are bartering over legislative powers under the governor’s state of emergency called to respond to the coronavirus.
How we got here
As part of the state’s response to the coronavirus, Walz declared a peacetime state of emergency on March 13 before extending it for 30 days on April 13. He is expected to extend it again before May 13.
It is under those declarations that Walz is able to govern by executive order rather than wait for the House and Senate to pass legislation. He has used that power 47 times, with measures that have ranged from ordering Minnesotans to stay at home to allowing food trucks to operate at truck stops.
Under state law, the Legislature can rescind a governor’s declaration of emergency. But the DFLers who hold a majority in the state House are unlikely to help the GOP-controlled Senate do that.
But over the weekend, House Minority Leader Kurt Daudt — invoking one of the few powers minority parties have in the Legislature — said he would not offer help get the 60 percent of House votes needed to approve bond sales for a state infrastructure spending package unless the state of emergency is ended.
That complicates — but doesn’t totally upend — what needs to happen before May 18 when this session must end. The end game will also be colored by the updated budget and revenue forecast released Tuesday. The state went from a $1.5 billion surplus to a $2.42 billion deficit — nearly a $4 billion swing on a budget base of $48.3 billion. If there is any good news, the state started with a $2.4 billion rainy day fund and has received more than $2 billion from the CARES Act.
When doing nothing means doing something
Given the divided Legislature, where bills must be agreed upon by a GOP Senate and a DFL House, both parties can essentially veto the other’s priorities. And one consequence of the way coronavirus changed normal legislative process is that both parties have given up on their biggest partisan agenda items, be it cutting taxes on social security benefits (for Republicans) or enacting more gun safety measures (for DFLers).
That need-to-compromise dynamic changes, however, when doing nothing advantages one party. And two examples of that phenomenon are playing out, with the ratification of state employee contracts and giving the Legislature more say over how to spend the billions of dollars flowing from the federal government to the state.
Doing nothing this session, for example, would nullify state contracts covering 11 employee groups with more than 46,000 workers. Not only would those workers not get a 2.5 percent raise this July, but they would have a 2.25 percent raise given last July taken off their checks.
Gazelka has said the GOP would like to see those contracts renegotiated given the expected reduction in state tax collections in the wake of COVID-19, including perhaps canceling the July 2020 raises.
On the other side, doing nothing this session also means Walz would continue to have broad authority to spend the COVID-19 response money flowing from the federal government. Minnesota has received nearly $2.2 billion directly from the CARES Act and another $900 million in other money for social services, health, transportation and education.
Senate Finance Committee Chair Julie Rosen’s Senate File 4486 would put that federal money into a special account and require the Legislature to appropriate it in the same way it appropriates state tax dollars. While it passed the Senate last week, with seven DFL votes along with all Republicans, Walz opposes it, since it makes it more difficult and time-consuming for him to move money around for COVID-19 response needs.
The House DFL does not seem inclined to support the bill, and if nothing is done Walz’s position will prevail. Current law allows governors to spend federal funds after running it passed a Legislative Advisory Council, which can advise but not veto the spending.
State Office of Management and Budget Commissioner Myron Frans notes that Walz is only following a law adopted by the Legislature. “They’re the ones who wrote the law,” Frans said of the advisory council process. “We are following a procedure that’s been around for a long time followed by a number of different governors — the idea of what happens when federal money shows up after the governor’s budget has been submitted and there’s an emergency.
“We are talking to both sides that we want them to be involved in making these decisions,” Frans said.
One idea is to fill up a special account created in March with $200 million in state dollars for emergency COVID expenses. Under that process, a commission of 10 lawmakers from both parties reviews requests to spend the money and can veto it with a majority vote.
Frans also didn’t close the door on state employee contract discussions, wanting a better idea of what the recession is doing to state tax collections. But he said there are also savings in those contracts, he noted, including $300 million is additional employee contribution to health insurance premiums. And the DFL is aware that asking corrections officers, state troopers, nurses, public health workers and those processing unemployment claims to give back a pay raise is not the best look for legislative Republicans.
“I hope the state employee contracts for people who are nurses and epidemiologists and doing all of this front line, essential service work right now doesn’t become a political chip this year,” said House Majority Leader Ryan Winkler, DFL-Golden Valley.
Gazelka acknowledged that the legislative role in spending federal funds and the collective bargaining issue are in play for end-of-session talks. “The good news is we’re all working productively, and I expect us to have a package that we all will agree on before session ends,” Gazelka said.
House Speaker Melissa Hortman said the law is clear on spending federal emergency funds. “The governor has complete authority to spend the federal money as he sees fit,” Hortman said.
But she too acknowledged the issue is being talked about by legislative leaders and Walz.“We are having productive conversations as to whether there is a compromise position that would allow us to have an orderly end of session with a bonding bill, a tax bill and some investment in Minnesotans’ economic security,” Hortman said. She added that how federal money is spent “is an area of fruitful conversation. Everyone has to come to the table with a willingness to compromise and a desire to see a deal get done.”
Broadband, rental assistance — and a bonding bill
There are a handful of other issues still pending that so far lack agreement. Making sure hourly school employees are paid along with teachers and other professional staff is a priority of House DFLers. Delaying tax collection deadlines and giving tax relief to farmers and small businesses is a GOP priority.
Both parties want to put money into expanding broadband access both for telemedicine and distance learning, and perhaps for equipment purchases for students. While both parties want to provide assistance for Minnesotans who can’t pay rent or mortgages, there are big differences in the amount of money they want set aside, and the length of the current moratorium on evictions.
While the number of items still being discussed is small and getting smaller, a bonding bill has been on both parties’ agendas from the first day of session back in February. The bonding bill — which funds public infrastructure projects around the state — is always the top issue of even-year sessions, with the debate usually centering on how much and which projects. Republicans are proposing a package of around $1 billion, while DFLers want more.
It wasn’t until Saturday, however, that bonding and the issue of balance of power and legislative prerogatives became linked.
Even though Daudt is in the House minority, he has clout at least once a session, when the majority comes looking for the votes needed to reach 60 percent approval for bond sales. Over the weekend, the Crown Republican used it by saying there won’t be a bond bill unless Walz lets his emergency power expire on May 13.
“House Republicans are ready and willing to work with the governor on the COVID response, keeping people safe, and on a bonding bill, but it’s time for the governor to work with the legislature on our path forward,” Daudt said in a Saturday statement. “The governor needed his emergency powers to navigate the fast-moving crisis, but after two months of unilateral power and decision-making it’s time for him to work with us on decisions and actions regarding the future of the state.”
On Monday, House Speaker Hortman criticized Daudt’s position. “There are a number of strong responses I could take to the unrealistic corner he has backed himself into,” the Brooklyn Park DFLer said. “The reality is that 50 governors have declared states of emergency in their states, the president of the United States of America has declared a national emergency. Holding the bonding bill hostage in exchange for a change in that status is not a position that’s likely to be successful.”
Gazelka also disagreed with Daudt, saying his caucus wants a bonding bill, though the size is still part of the debate. And he noted that there are 26 Republican governors with emergency powers currently and 24 Democratic governors.
“I’ll bet every single one of (the Legislatures) wants to have more oversight, that the governor in any of those states should not have complete authority,” he said. “What I’m hoping is that having oversight of the federal money is a big step that could get us toward working together.”
“The sooner we get to the legislative bodies working with the governor, the better off I think we’ll be,” said Gazelka. “But I’m not making that a condition of working on a bonding bill, legislative oversight of federal money (or) the tax relief for small business owners.”
Neither of those positions will matter if Daudt blocks the bonding bill the House, though. And so the question for now is what can Hortman and Gazelka and Walz agree to regarding increasing the Legislature’s role in managing the crisis — and whether it will be enough for Daudt to claim victory and get the handful of GOP votes needed to pass a bonding bill.