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With deals on education budget and money for frontline workers, Legislature closes in on finishing budget

After weeks of foreboding, days of filibusters and speculation on lack of progress, lawmakers face looming … success, with agreement on 10 of the 13 budget bills and two more that are said to be close.

Senate Majority Leader Paul Gazelka: “All three of us feel like there’s no way we should allow a shutdown.”
Senate Majority Leader Paul Gazelka: “All three of us feel like there’s no way we should allow a shutdown.”
MinnPost photo by Peter Callaghan

From even before the first day of the Minnesota Legislature’s special session, leaders have sounded a calming tone about the risks of a budget failure for state government. 

Gov. Tim Walz, Senate Majority Leader Paul Gazelka and House Speaker Melissa Hortman have said repeatedly that budget deals totalling $52 billion will be reached, that sticking points will be unstuck and that state government will be funded on July 1 and for the next two years.

Now, after two weeks of foreboding headlines, days of House GOP filibusters  and a lack of apparent progress on the 13 funding bills, their faith in the process appears to have been well placed. Lawmakers have reached deals on 10 of the 13 budget bills, and two more are said to be close.

Seven to 10 days was the prediction on May 17. While that is unlikely to be met, it may be missed by only a day or two. “All three of us feel like there’s no way we should allow a shutdown,” Gazelka said. “It’s too big a deal for Minnesota.”

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“We’re picking up steam,” said Hortman.

“We’re making good movement,” Walz said Monday. “While we should have been done in May, there’s certainly no reason why we wouldn’t finish now.”

Tuesday’s major accomplishment was an education funding measure that will boost the school funding formula by more than $1 billion, with per-student formula increases of 2.5 percent for the upcoming school year and 2 percent for the following school year. It includes separate funding to recruit and train teachers of color and to boost efforts to reduce racial inequities in Minnesota.

Gov. Tim Walz: “While we should have been done in May, there’s certainly no reason why we wouldn’t finish now.”
MinnPost photo by Peter Callaghan
Gov. Tim Walz: “While we should have been done in May, there’s certainly no reason why we wouldn’t finish now.”
The governor and legislative leaders also agreed Tuesday to spend around $250 million of federal American Rescue Plan money on cash bonuses for those who worked in frontline jobs during the pandemic, including those in health care, school support staff, grocery and food service workers. 

“We’re working out together as to who gets what and how,” Gazelka said. 

Hortman said a nine-member work group — three appointed by Walz, three by the House and three by the Senate — would hash out details of who and how much with a goal of having a plan approved by Labor Day. A plan needs seven votes.

“During COVID-19, there were a lot of heroes,” Hortman said.

Walz noted that in signing the American Rescue Plan, President Biden singled out help for essential workers as a primary use of the money going to the states. Minnesota received $2.8 billion in direct aid.

Sen. Erin Murphy, DFL-St Paul, has been one of the main advocates for essential worker pay along with Rep. Cedrick Frazier, DFL-New Hope, said she was pleased with the apparent agreement. “If we were able to secure that much money for the workers then yes, it will be a job well done,” Murphy said.

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That agreement is tied to a one-year extension of the state’s reinsurance program, which stabilizes prices in the individual health insurance market. DFLers had wanted the plan, which lets insurance companies “reinsure” their most-costly customers via a state fund, to expire, while Republicans wanted it extended by two years.

State Rep. Cedrick Frazier and state Sen. Erin Murphy shown at a May 27 press conference.
MinnPost photo by Peter Callaghan
State Rep. Cedrick Frazier and state Sen. Erin Murphy shown at a May 27 press conference.

Public safety issues remain unresolved

Four funding bills are already on Walz’s desk: Higher education, Legacy program funding, Agriculture and Commerce. Once signed, those areas of government will be assured of funding when the next budget period begins, in eight days.

Six other funding bills are agreed to but awaiting scheduling for floor debate in one chamber or the other. They are Environment, Housing, Education, Transportation, Taxes and the so-called Jobs bill. The two that are said to be close to completion: the Health and Human Services and State Government, with neither having significant differences, according to leaders.

The final unresolved bill, as was predicted months ago, is the funding and policy omnibus bill for the judiciary and public safety agencies. That is the bill that will include any policy changes in policing and criminal justice.

“It’s just been tough,” Gazelka said of the bill, which attempts to reconcile a DFL priority for further policing and criminal justice reforms with a GOP push to boost law enforcement and respond to increased crime. “We’ve narrowed down to a place where I know where we’ll get done relatively quick.” The Big Three leaders are involved to “help them finish those final things.”

Still unresolved are a licensing ban on cops who are active in extremist groups; model rules for how police respond to demonstrations; the handling of outstanding warrants; and limits on so-called pretextual stops, such as for expired license tabs or faulty lights.

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“It’s just a really emotional issue,” Hortman said. “It’s the most difficult thing I think the state of Minnesota has gone through this last year. We’re the epicenter. We have an obligation to get this right.”

Gazelka Tuesday said there are now about 20 items on a punch list that are being resolved, including state action to coax a lumber-products plant to Cohasset and money to begin planning a land bridge over I-94 in the Rondo neighborhood of St Paul. 

“Lots of things are on the precipice,” Hortman said.

An announcement on those details could be held Wednesday.

Federal aid helps

Two factors were central to getting things this close. First was a willingness on the part of the Walz, Hortman and Gazelka to jettison issues that were too partisan or controversial to reach agreement. Republican issues that fit that category included changes to voting rules and a school voucher plan. Democrats stepped back from any tax increases and issues such as immigrant driver licenses.

“Both sides are going to point to things and say, ‘I really like that,’ and both sides are going to point to things and say, ‘Why didn’t you get that?” Gazelka said. “We’re the only divided Legislature in the whole country, so for either side to think they’re going to get everything is just not reality.”

House Speaker Melissa Hortman: “Lots of things are on the precipice.”
MinnPost photo by Peter Callaghan
House Speaker Melissa Hortman: “Lots of things are on the precipice.”
“We’re coming to that place that many of us knew that we would get to in trying to find common ground for Minnesota, but also recognizing that the most divisive of things are probably not going to get done or have to wait for another day,” Walz said.

The other factor was the billions of dollars that flowed into the state government in the form of federal pandemic relief aid. The state not only got money directly but it also benefited from the tax collections that flowed from stimulus checks, business grants and the bump in unemployment pay.

Having extra money helped with most of the budget bills, but especially the education and transportation bills.

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The potential delays now fall mostly on members of the two minority caucuses: the GOP in the House and the DFL in the Senate. A bonding bill to pay for construction projects requires a 60 percent vote in both houses, and even if minority members might not have the votes to block bills, they do have unlimited speaking privileges. While the Senate DFL has been mostly cooperative in limiting debate and helping move bills through rules suspensions, the House GOP has done the opposite.

No budget bills were adopted last Thursday, Friday and most of Saturday due to a filibuster by House GOPers, who resented being left out of negotiations on budget bills. While that has eased some, there remains a threat of delays.

Said of Hortman of tactics employed by House Republicans last week: “We gave them a full and fair opportunity to make idiots of themselves, which they took us up on.”