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After slog of a session, Walz, legislative leaders tout $52 billion budget

The Legislature finally finished a $52 billion two-year state budget with a few hours to spare before a partial government shutdown. At the same time, the state met at least one measure of a successful vaccination effort: 70 percent of residents 18 years old and older with at least one shot.

Gov. Tim Walz
“A way long time ago, I said there won’t be a day, like at the end of a war, where all the church bells ring and you walk outside and COVID is over,” Gov. Tim Walz said before a ceremonial signing of budget bills. “But today is about as close to that as we could get, that we are here, that it is over.”
MinnPost photo by Peter Callaghan

Given what has happened over the last 15 months — or even just since the 2021 legislative session began in January — it wouldn’t have taken much for Gov. Tim Walz to be in a celebratory mood Thursday.

There was the global pandemic that killed 7,600 Minnesotans, a recession induced by the response to the virus, and a peacetime state of emergency — with major disruptions to individuals and businesses. There was also the political fallout from the stay-home orders birthed from that emergency — along with a large projected budget deficit, which was then followed by record surpluses. 

All confronted Minnesota political leaders, with Walz at the front.

Still, it was a good week for Walz and legislators. The Legislature finally finished a $52 billion two-year state budget with a few hours to spare before a partial government shutdown. At the same time, the state met at least one measure of a successful vaccination effort: 70 percent of residents 18 years old and older with at least one shot.

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“A way long time ago, I said there won’t be a day, like at the end of a war, where all the church bells ring and you walk outside and COVID is over,” Walz said before a ceremonial signing of budget bills. “But today is about as close to that as we could get, that we are here, that it is over.”

It was the first use of the Capitol’s historic reception room since March of 2020, when the room was used to announce the first known infection of a Minnesotan and then for Walz to sign a $21 million state appropriation for public health. That money seemed large at the time. Fifteen months later, $750 million in state dollars — and billions more in federal funds — have been spent to fight the pandemic and address its social and economic fallout.

If you try sometime, you’ll find you get what you need

The post-Legislature comity would have been hard to foresee when the 2021 session began. Even before it started, a pre-session Zoom presentation by Walz and the four legislative caucus leaders broke down when DFLers felt Republicans weren’t willing to declare that the 2020 election was over  — and that Joe Biden was the legitimate victor.

The session then began just after the attack on the U.S. Capitol by supporters of then-President Donald Trump, who were trying to stop certification of the election. The Minnesota Capitol, protected by chain link fencing and National Guard units, was still closed to the public.

The slow but steady rollout of vaccines in Minnesota allowed the eventual reopening of the building. It also ended the partisan fights over everything from the protections for nursing home residents to the questions that appeared on a state vaccine locator website.

A sickened economy proved to be more resilient than predicted. With the help of federal cash doled out to governments and individuals, deficits became surpluses, making balancing state budgets easier. Each of the 12 state budget bills was aided in some way by federal dollars.

One small but telling example is in the one-time checks of $435 to those enrolled in the Minnesota Family Investment Program: the state’s primary welfare grant program. Walz and DFLers had been trying to pass the measure since March of 2020; they finally succeeded thanks to a health and human services budget bolstered by money from the federal American Rescue Plan. 

Another example: Ending the state’s eviction moratorium would have been far harder to achieve without $672 million in federal money available to help pay back the rent of those facing eviction. 

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And it’s not just this year. The 2022 session — in an election year with Walz and all 201 legislative seats on the ballot — will start with $2.3 billion in the state’s rainy day fund, $1 billion unspent from the state’s cash grant from the American Rescue Plan — and a surplus that recent tax collections suggest could be in the $2 billion range.

Senate Majority Leader Paul Gazelka repeated the obvious on the final day of the session: that a GOP-controlled Senate and a DFL-controlled House have more ways to fail than succeed, but somehow did what was necessary. 

He attributed much of that to the working relationship between himself — a conservative from East Gull Lake with gubernatorial aspirations — and House Speaker Melissa Hortman, a liberal from Brooklyn Park. “She kept her word. I kept my word. We tried to navigate through extremely difficult situations,” Gazelka said. 

Both also understood that while neither was ever able to get everything they wanted, both needed to bring some victories back to their districts. “How do we govern to the middle, which is extremely difficult?” Gazelka said. “When you have to navigate and settle at the middle, no one is really  happy.”

For Republicans, one of those victories was extending the state’s reinsurance program, which relies on a state funding to help insurance companies cover policyholders with high medical costs and has helped control health insurance premiums. The GOP also not only blocked any tax hikes, it won tax reductions for those who received Paycheck Protection Program loans and enhanced unemployment insurance. Republicans also got an end to Minnesota’s state of emergency. 

For the DFL, victories included the largest increase in education funding in a decade or more; increases in funding for health and social programs; the preservation of the Clean Cars rules to boost sales of electric vehicles; and a 15-day notice to tenants facing eviction, steering them to rental assistance under the RentHelpMN program.

Senate Majority Leader Paul Gazelka: “[House Speaker Melissa Hortman] kept her word. I kept my word. We tried to navigate through extremely difficult situations.”
MinnPost photo by Peter Callaghan
Senate Majority Leader Paul Gazelka: “[House Speaker Melissa Hortman] kept her word. I kept my word. We tried to navigate through extremely difficult situations.”
A session that began on Zoom ended with nearly packed House and Senate chambers, and Hortman noted the effect a return to gathering in person had on the process at the Minnesota Capitol. “Having people in person with each other, able to talk and even laugh, we were able to get a lot more done,” she said. 

Hortman echoed Gazelka’s description of what happens (and doesn’t) when a liberal House and a conservative Senate have to agree. “There are many initiatives that we champion that didn’t get a chance to get across the finish line,” she said. 

“What was the challenging part, especially on the public safety bill, was to navigate so we could get things we felt good about, worth having, that could pass the Republican Senate,” she said.

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Work to be done on bonuses for essential workers

The state budget comes in 13 different parts, each covering a different section of government. As is the Minnesota way, those same spending bills contain a session’s worth of work product, with dozens of bills slid into the hundreds of pages of legislation. Despite missing multiple deadlines, lawmakers passed all of them in time to avoid a government shutdown. After signing the taxes omnibus bill on Thursday, Walz had signed all into law.

“In a very divided nation, we did this with the only divided legislature in the country,” Walz said before thanking leaders of both chambers who didn’t “let partisanship override the commonalities we have and get a budget that’s for Minnesota.”

An agreement on Minnesota’s peacetime emergency reached this week, while not easy or pretty, also satisfies both legislative Republicans and Walz. An amendment to the state government funding bill ended the peacetime state of emergency as of the end of the day Thursday. But another amendment, this one to the taxes bill, provided some powers that the governor said were still needed: assuring the continuation of enhanced federal food stamp benefits; letting him redeploy state workers back to their original jobs; and giving him powers around vaccinations and testing without having to return to state bidding and procurement laws.

House Speaker Melissa Hortman, left: “There are many initiatives that we champion that didn’t get a chance to get across the finish line.”
MinnPost photo by Peter Callaghan
House Speaker Melissa Hortman, left: “There are many initiatives that we champion that didn’t get a chance to get across the finish line.”
The deal also gives health officials the ability to declare a health disaster in the future, which would allow the state to respond shy of imposing another peacetime state of emergency. Walz could still do that, perhaps if some COVID variant leads to another surge. But the change gives the state tools that are less sweeping. For weary lawmakers, the agreement also means there will no longer be a need to return to the Capitol mid-month to vote on rescinding another 30-day extension of the declaration. They have been in session at least one day — and often many days — for each of the last 18 months.

The deal meant Republicans finally succeeded in rescinding Walz’s emergency declaration. It also led to an additional win for DFL lawmakers in the package of police accountability measures: The ability for police to simply get people with certain outstanding warrants to sign an acknowledgement that they are due in court rather than make arrests.

Still to be worked out are the details of a program to pay bonuses to essential pandemic workers: those with jobs in health care, long-term care and other essential roles that didn’t allow for remote work. A nine-member working group — three from the House, three from the Senate and three appointed by Walz — will meet this summer to figure out who might get how much from a $250 million fund that was drawn from the state’s share of ARP money. 

Essential worker bonuses are one of the federal law’s four stated uses for the money sent directly to state and local governments. “Those are the folks this was meant to cover and we’ll make sure we get it out and get it to them.” Walz said.

A special session will need to be convened to approve a plan that must get at least seven votes, arithmetic that assures that at least one Republican will need to endorse the plan.