MinnPost guide to the 2024 legislative session: marijuana fixes, sports betting, no new spending

Grab your tickets for MinnPost Social: 2024 Legislative Preview on Wednesday, February 28.

If you are a DFL legislator from Minnesota, how do you top a legislative session described as generational, historic, transformational — one where nearly every item on an aspirational to-do list was passed and signed into law by Gov. Tim Walz?

The most-common response to such a legislative challenge is: You don’t. Money is suddenly tight, and agencies need time to implement all that was passed, from a sweeping paid family leave insurance program to a record $1 billion in housing funding.

When lawmakers talk to her about new programs and higher taxes, Senate Taxes Committee Chair Ann Rest has a blunt response.

“I have only one word for them and that word is ‘no,’” the New Hope DFLer said during a Minnesota Chamber of Commerce pre-session panel discussion late last month. “No new spending, no new taxes.” Rest is not only chair of an important committee, she is, like everyone else in the DFL caucus, the 34th vote in a 34-33 chamber.

Walz was asked Friday whether he would have a different one-word answer than Rest.

“No, I don’t have a different answer,” he said.

“We had a transformational session last session, improving lives,” Walz said. He cited free school meals and the child tax credit as two programs that he has been touting of late.

“Now is the time to just implement, see the impact of what we did. The tax chair is taking a very measured, a very smart approach,” he said.

That suits minority Republicans, who thought too much was spent and not enough was returned to taxpayers last year. While they would like to roll back some of the spending, they might be happy to keep it from growing.

“We don’t have a revenue problem, we have a spending problem,” said Senate Minority Leader Mark Johnson of East Grand Forks using a slogan that will be heard frequently. The shrinkage of the surplus means “they can’t buy their way out of problems this year.”

Added House Minority Leader Lisa Demuth of Cold Spring: “We have got to realize that this is not sustainable, the way we’re spending.”

Still, as is also frequently mentioned, a trifecta is a terrible thing to waste. While Walz and DFL senators don’t face reelection until 2026, a sour 2024 election for Democrats could result in a GOP-controlled House. That has led some, especially on the left flanks of the DFL caucuses, to want to take advantage now. A major expansion of child care assistance has been proposed. And bills to change how sentencing laws impact communities of color and to make Minnesota a sanctuary state for undocumented immigrants are being pushed, but most still lack majority support.

Another would add what is called a public option to the array of ways residents can get health care. The concept is that people of all incomes could opt into the state’s health insurance marketplace known as MNsure that is now reserved for people whose income falls below statutory thresholds.

A House committee took the unusual step of passing a bill for what is called end-of-life options or physician assisted suicide. It would allow doctors to provide drugs that could be taken by a patient with terminal conditions. Minnesota would be the 11th state with such aid-in-dying provisions.

Legislative leaders have said while some of those issues can be examined this session, passage will likely wait until next year or later.

Here are some of the issues that should take up significant legislative time starting Monday.

Budget and taxes

The 2023 session adopted a budget that was nearly $20 billion more than was spent in the previous two-year period — $51.6 billion in 2022-23 compared to $71.5 billion in 2023-24. Some of the new total is one-time expenditures helped by a record $17.5 billion surplus. But even without one-time spending, the current budget will cost $66.1 billion.

After what might be described as a spending spree last year, the 2024 session will be characterized as one of restraint and caution. Why? The massive surpluses that marked the 2023 session are mostly gone — spent — with just $2.4 billion left as cushion.

After that, beginning in the budget that starts July 1, 2025, the projections are for a barely break-even budget given current spending and taxation. Any new spending this session, without corresponding increases in revenue, will drive the next budget into a deficit. An updated forecast Feb. 29 will provide the numbers that will drive the final decisions.

Spending nothing, however, keeps the out-years forecast in the black.

“That’s the plan,” Hortman said.

There is something lawmakers want to fix early in the session: a drafting error in last year’s taxes bill that will cost taxpayers as much as $350 million in the 2024 tax year if not repaired. A few other less significant changes are also needed.  

Cannabis law fixes

Since House File 100 began taking effect last summer, complaints about some of its provisions have surfaced — mostly from local governments and opponents of the bill. While bill summaries stated that smoking and vaping cannabis could only be done in private, the bill actually made Minnesota one of just four legalized states where public smoking and vaping is allowed, unless local governments restrict it. Many have passed local ordinances limiting smoking and vaping in the same way public cigarette smoking is handled.

While public/private consumption is unlikely to be changed this session, a batch of changes proposed by the new Office of Cannabis Management could hold more sway with DFL legislators. The office is asking that provisions meant to give an advantage to what are termed social-equity applicants be updated.

OCM interim director Charlene Briner doesn’t think they are enough. Her proposal is to give temporary licenses to social equity applicants that would have the effect of jump-starting their efforts to get into the business. When Briner talked about the proposal last month, some key lobbyists and lawmakers interpreted it to mean social equity applicants could also begin retail sales by late summer instead of in March 2025 as the current law envisions. But Briner clarified this week that while the applicants could get a head start on other steps to opening up a business, OCM isn’t proposing accelerating the retail rollout.

Briner also suggested bringing the regulation and enforcement of hemp-derived edibles into her office this summer instead of next spring. Importing hemp regulation for the Office of Medical Cannabis sooner would also help close a regulatory gap in the new law that left raw cannabis flower sales in some hemp stores unregulated. 

Rep. Zack Stephenson, DFL-Coon Rapids, said he is intrigued by some of the ideas Briner is expected to bring forward in bill form, especially additional help for social-equity applicants and any streamlining of licensing.

“Everyone agrees that the sooner we can get licensed dispensaries open, the better,” he said. “The point of the law is to replace the illicit market with a legal market.”

Sports betting

Betting on professional and college sports has been spreading across the U.S. since a 2018 U.S. Supreme Court ruling took jurisdiction away from the federal government and gave it to the states. Minnesota, however, has not been able to find enough support in the Legislature to legalize such wagering.

The math is still the same: Most DFLers will not support a bill that doesn’t give exclusive control over sports betting to the state’s 11 tribal nations. Most Republicans have insisted that the two horse racing tracks get some help from a sports betting law — either a share of tax revenue or the right to offer betting themselves.

But an all-DFL bill that would win support from the tribes has been blocked by a pair of anti-gambling DFL senators. Bills that help the tracks either give them too little to collect enough GOP votes or do too much so as to be opposed by the tribes.

“Most success around here comes from keeping your options open as long as you can,” said Rep. Zack Stephenson, DFL-Coon Rapids, who has been working to pass sports betting for three years.

Sen. Matt Klein, the Mendota Heights DFLer, said he continues to work with the holdouts but is also open to ideas such as one proposed by Sen. Jeremy Miller, R-Winona. Miller would give tribes control over betting in their own casinos and via mobile apps but would allow them to contract with tracks and professional sports teams to offer betting at tracks and stadiums.

Klein said there are also conversations around helping charitable gambling — the clubs and taverns that use pull tabs to raise money for charity. Changes in e-pull tabs last year to remedy legal objections brought by tribal governments diminished the take from those games.

Ballot measures

One measure will be on the November 2024 ballot: a renewal of the constitutional amendment that diverts a portion of state lottery proceeds to environmental projects. The Environment and Natural Resources Trust Fund has directed  $700 million to 1,700 projects since it was created in 1991, and the 2023 session sent it to the ballot.

But will it be the only measure voted on in this election? Supporters of three other constitutional amendments are hoping to be on the ballot as well. One would raise the statewide sales tax by three-eighths of 1% with proceeds spent on affordable housing projects including homeownership assistance and rental assistance. The other combines a state equal rights amendment with abortion and gender equity protection provisions. A third would create an independent redistricting commission to handle once-a-decade redrawing of political maps.

All have some support among the DFL majority. That doesn’t mean any will be on the ballot, at least not in 2024. Hortman said the consensus now is to pass the equal rights/abortion amendment though the House and Senate this session for placement on the 2026 ballot.

Bonding

Even-numbered legislative sessions have, in the past, been dubbed bonding sessions — as in, the big operating budget is adopted in odd-years, leaving the next session for the bill that sells bonds to fund construction projects. After a period where no bonding bills were passed, the Legislature could be easing back into a pattern of big bonding bills one session and smaller bills the next.

Last year the House and Senate met some bottled-up construction needs with a $2.6 billion capital construction package. This year, Walz has proposed a $982 million bonding bill that is heavy on transportation, water systems, public safety and state buildings. Because it is a rare bill that requires 60% majorities to pass, minority Republicans have to be involved.

Hortman said capital budget chairs and GOP leads will decide how much goes into each pot — state projects, local DFL projects and local GOP projects. Once that distribution is made, projects will be agreed upon and a bill will be debated.

“There would have to be balance across the state,” not just in the more-densely populated areas, Demuth said.

Editor’s note: This story has been updated to correct OCM’s proposal to strengthen social equity provisions in the recreational cannabis law. OCM clarified its position after the story was published.