Minnesota lawmakers could pass some historic legislation Sunday, including eliminating taxes on Social Security, easing the cost to schools for special education, and raising the pay of caregivers in the struggling long-term care industry.
But they have to act fast. Lawmakers have until midnight Sunday to agree on $4 billion worth of tax cuts and $4 billion in new spending.
They struck a deal on tax breaks Saturday, but sticking points remained on spending plans for key areas like crime and education. If they can’t get past those sticking points, it’s possible that the tax deal won’t become reality.
The money would be spent over the next three years and comes from the state’s record $9.25 billion budget surplus as well as future tax collections that are anticipated to exceed expectations.
Gov. Tim Walz, GOP Senate Majority Leader Jeremy Miller and DFL House Speaker Melissa Hortman announced the grand bargain Monday. Members of bipartisan joint committees have spent the last week ironing out the details of the spending plans.
Final bills appeared to be coming together Saturday as both the Republican-controlled Senate and the Democratic-Farmer-Labor Party-led House held a marathon of floor sessions, committee meetings and closed-door talks.
“It’s crunch time,” said Sen. Miller, R-Winona. “Time is short.”
Technically, lawmakers aren’t required to pass anything. The state is operating under a two-year, $52 billion budget approved last year, so there’s no risk of parts of the government shutting down if no additional legislation passes this year.
EMERGING DEALS: TAXES, HEALTH, BONDING
Leaders of the conference committee working to cut taxes announced they had come to agreement Saturday.
The plan would eliminate state income taxes on Social Security, cut the lowest tax tier rate by a quarter of a percent and increase credits for renters and homeowners. The tax breaks would reduce revenue by about $1.45 billion next year and roughly $1.22 billion a year going forward.
Lawmakers continue to debate how to spend $1 billion on health and human services programs.
Senate Republicans want to put most of the new money toward raises for caregivers and aid to the long-term industry, which faces dire financial struggles in wake of the coronavirus pandemic. Democrats want help for long-term care, but also want to increase aid to lower-income residents to help for things like childcare.
Finally, non-budget years are typically when lawmakers approve an infrastructure bill, and talks between the House and Senate are progressing. The $1.5 billion agreed upon for the so-called bonding bill will likely focus $1 billion on requests from state agencies and $400 million for community project requests.
Rather than focus on eye-catching new construction, the list of projects being winnowed by lawmakers is focused on fixing and maintaining assets like roads, bridges, and state- and college-owned buildings.
“It may be the only bill that passes this year,” said Sen. Tom Bakk, I-Cook, who chairs the Senate’s capital investment committee. The bonding bill is the only part of the grand bargain not tied to the other parts.
Lawmakers on Saturday also announced agreements on a number of smaller supplemental budget bills, including spending plans for agriculture, drought relief, broadband investments, energy programs, and grants for job training.
STICKING POINTS: CRIME, SCHOOLS
Figuring out how to spend some $450 million in public safety has proven difficult. While there’s general agreement on increasing funding for the courts, the “order” side of the law & order equation has threatened an impasse.
While House Democrats have repeatedly said they want to hire and recruit more police officers, they’ve focused recent days of talks on another priority: a suite of spending that includes grants to local nonprofits to deploy “violence interrupters” and other forms of crime community-based crime prevention efforts that don’t involve badges and guns. They’re also pushing for money for more investigators to improve the rate of solving crime.
Senate Republicans, meanwhile, have zeroed in on their top priority: more cops. In theory, both sides could get some of what they want, but by Saturday evening, they were struggling to not talk past each other.
Lawmakers also are at odds on how to spend $1 billion more on education. There are differences on how much to put toward boosting funding to cover districts’ special education costs. Many special education services are mandated by regulations, but there are not enough dedicated state and federal funds to pay for them — a longtime financial sore spot for school administrators.
Leaders of the education committee also remain divided on how much to dedicate for student supports, such as mental health services and how to improve young students’ literacy.
In both education and crime Saturday evening, key figures began making public pronouncements to the media and on the floor of the chambers — a telltale sign that talks are at risk of stalling.
Miller and Hortman had already begun to get their hands into some of the nitty-gritty of the sticking points Saturday night, potentially with Walz involved as well.
While the legislative session officially ends Monday, lawmakers have until midnight Sunday to pass bills.
