Hello from St. Paul,
With the legislative Easter/Passover break now here, it’s safe to say the Minnesota House is going to be very busy heading into the home stretch.
The legislature must set a budget for the upcoming biennium. Each branch of Minnesota government has released comprehensive budget targets. The House DFL is the majority party in House, and it has unveiled a budget target of $52.5 billion. Republicans control the Minnesota Senate, and they have a target of $51.9 billion, while Governor Walz’s target is $52.3 billion.
Adding to the intrigue is the unbelievable one-time revenue that must be addressed. Along with a $1.6 billion state surplus, we also have billions of dollars coming to our state as part of a federal COVID-19 relief package. If the legislature does not spend the billions in federal money before session ends May 17th, the governor can spend that money unilaterally, without the legislature's approval. The administration has made their intention to spend that money clear in Ways and Means Committee March 22nd. You can watch that meeting here. That means the governor has all the cards when it comes to budget negotiations. He just needs to run out the clock.
We are also facing other issues that need attention. As I shared last week, we attempted to move forward on bills that would exempt forgiven business owner Paycheck Protection Program (PPP) loan income from state taxes and pandemic-related Unemployment Insurance tax elimination for our workers. The Senate approved its plan on a strong bipartisan vote of 55-12.
The House majority did not allow any of these proposals to move forward, which is unfortunate because there is clearly overwhelming bipartisan agreement that these problems must be solved. (Here are my remarks I made during the debate on the floor.) It is their intention to hold back this tax relief for leverage in budget negotiations.
April 6 marks our first day back after the Easter/Passover break. May 17 is when the legislature must adjourn for the year. With only 6 weeks remaining, expect legislative activity to heat up quickly, as the House, Senate and Governor’s Office will need time to negotiate final budget agreements, and find consensus on numerous other topics, before session ends.
Have a good weekend,
Nolan