From the Minnesota Reformer
Lawmakers give final approval to $52 billion budget, averting state government shutdown
By Ricardo Lopez -June 30, 2021
Minnesota lawmakers at last completed a new $52 billion two-year budget on Wednesday with just hours to spare before parts of state government were set to temporarily shutter amid ideological differences in the divided Legislature.
The final budget piece, a nearly $21 billion education bill, passed unanimously in the Senate, having been held as leverage until the House agreed to pass a $900 million tax bill containing business and individual tax cuts, a top Republican priority. The education budget bill was the last remaining must-pass bill to avoid a partial government shutdown.
That left the tax bill outstanding, but its passage was not crucial to keeping the lights on for state government agencies.
“We’re almost to the finish line,” Senate Majority Leader Paul Gazelka, R-East Gull Lake, said ahead of the final votes. “Both were always meant to be the last two bills, taxes and education. Both sides think both bills are important but it’s that trust and verify and so that’s what we’re waiting for.”
The final days of session included the usual end-of-session bumps, with last-minute amendments threatening to derail a previous global agreement. But the specter of a potential government shutdown appeared to motivate lawmakers to quickly work through those final hangups.
The GOP-led Senate and DFL-majority House worked late into the early morning hours of Wednesday, wrangling over the final details of a contentious public safety budget bill that included modest police and criminal justice reforms that disappointed some Democrats.
One bump included a last minute announcement by DFL Gov. Tim Walz to end his emergency powers on July 1 after reaching a deal with the federal government to extend some federal benefits like food stamps for several more weeks in the absence of a peacetime emergency declaration.
Walz had hoped the Legislature would approve an amendment to the state government budget bill that gives the governor some continued authority to manage a public health emergency, but ultimately lawmakers stripped out that language and voted to end his emergency powers.
The education budget bill includes a 2.45% increase to the general education funding formula in 2022 and a 2% increase in 2023, costing nearly $463 million over the next two years.
State Sen. Roger Chamberlain, R-Lino Lakes, said formula increases were the “fairest” way to give school districts money without strings attached. “Big increases in spending, few mandates,” he said.
The tax bill lawmakers will vote on will not only exempt unemployment benefits from state taxes, but also Paycheck Protection Program loans to businesses that struggled through the pandemic. It also provides state funding for an engineered-woods mill in Cohasset in exchange for state funding for a study of building a land bridge over Interstate-94 in St. Paul’s Rondo neighborhood.
The bill includes changes to the state’s tax credit for low-income working parents and credit increases for some taxpayers, a continuation of the historic preservation credit and an extension of a credit for startups.
Tax hikes on the wealthiest Minnesotans, sought by Walz early in the year and opposed by the GOP, were not included in the final deal.
It will also establish a film production tax credit at $5 million each year for fiscal years 2022 through 2025.
Gazelka indicated that the Legislature was unlikely to adjourn the special session on Wednesday night, saying a public works borrowing bill was still being negotiated.
Another reason why lawmakers were not yet adjourning was to ensure Walz signed all of the budget bills, Gazelka said.
Still, lawmakers plan to return in yet another special session in September to adopt recommendations made by a working group about how to provide $250 million in bonus pay to essential workers who were left out of previous COVID-19 relief aid and were forced to use their own sick and vacation time to care for themselves or others.
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See also Mike Cook's report for Session Daily, House, Senate pass state government bill that includes end to peacetime emergency and Legislature passes $52B budget, continues to debate tax measures by Briana Bierschbach and Jessie Van Berkel at the Star Tribune.
Screenshot: The livestream from the Minnesota House Information Services YouTube channel as we finish this post.
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