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Already behind schedule, Minnesota lawmakers aim to complete a new state
budget this week and head off the possibility of a government shutdown a
month from now.
The final pieces of budget legislation are coming into focus. Once the
last details are locked in, Gov. Tim Walz intends to call a special
session. He told MPR News last week that he was aiming for Wednesday,
but that could easily slip until later in the week.
Republican House Speaker Lisa Demuth and House DFL Leader Melissa
Hortman said they want to see it happen by Wednesday. They said the
final bills were being fine-tuned to match the agreements made.
"We're still hoping for Wednesday, but we are waiting for the revisor to
finish drafting Health and Human Services," Hortman said of the bill
that always reaches hundreds of pages due to its scope and complexity.
"We want Wednesday, and we want the revisors to draft, draft, draft."
The Legislature failed to complete much of the $66 billion two-year
budget by a May 19 session adjournment deadline. Since then, small sets
of negotiators have met mostly behind closed doors. That's meant
stakeholders and the public in general have had to scrape for details.
And for some lawmakers on the inside, they add the process has been
difficult for them as well.
"It was very difficult," said Rep. Erin Koegel, a DFLer who helped
fashion a final transportation plan. "There's lots of egos and it was a
very hard process. It was uncomfortable and it was tense. And I'm hoping
that maybe some lessons were learned this year, and we can go forward in
a little bit more of a civil manner."
The Republican co-chair of the House Taxes Committee told MPR News on
Monday that he doesn't think the proposal structured by Walz advisers
and legislative leaders can pass.
"We put five months of thought into something they put five minutes of
thought into, and I know which one's going to be better," said Rep. Greg
Davids of Preston. "I'm just not sure why any Republican would even
consider voting for this. I don't think it would pass House or the
Senate."
What's unusual about the Capitol now is that the House is tied between Democrats and Republicans. The working groups are chaired by three
lawmakers - a Democrat from the Senate and House and a Republican from
the House.
The legislation they're writing will be voted on in public during that yet-scheduled special session.
Legislative leaders are hoping for an in-and-out session that takes one
day or close to that.
But this year has been full of surprises and it wouldn't be a shock if lawmakers unhappy with the agreements drag it out to make a point or try
to send things back to the bargaining table.
Most budget spreadsheets and policy agreements are online although a few
bill drafts are still to come.
An education finance bill popped up Monday. A tax bill was posted over
the weekend.
The tax bill is 12 pages in total, meaning most items in dispute were
tossed overboard. It's a sharp contrast to last year's tax package that
ran more than 1,400 pages and has attracted lawsuits for the inclusion
of so many items that only loosely connect to the tax code.
The transportation plan Koegel worked on reflects a $115 million cut in
the next two years and a bit more than that two years beyond that. The
Spring Lake Park DFLer said her goal was to minimize cuts to mass
transit.
But there were other pinch points that kept the transportation bill open
for weeks, from discussions about emissions to the structure of mass
transit.
As part of the agreement electric vehicle owners will foot more of the transportation bill.
EV owners will pay a surcharge to basically kick in money they're not
paying in gas taxes.
Initially, that had been a flat amount. The final plan determines the
surcharge based on a formula that factors in vehicle value and age.
The minimum fee at first will be $150 for full-electric cars and $75 for plug-in hybrids.
But that could shift later as lawmakers study a charging system fee.
The "skinny" tax bill tapers exemptions for data centers. They won't be
able to avoid taxes on electricity use as they have before.
The cannabis products tax goes up from 10 percent to 15 percent.
Davids said the fact it raises taxes overall is a nonstarter for him.
"It's massive tax increases, and that's not what our caucus is supposed
to be about," he said in a telephone interview.
In the education bill - at more than $25 billion it's one of the biggest expenses in the state budget - there are changes to calculations for
various per-student allowances. The bill includes more money to
implement literacy curriculum changes.
There's also a new task force set up to examine special education costs
and look for ways to lower the rapid growth in those.
Districts will be expected to develop and implement cardiac emergency
response plans for sudden cardiac events on their properties; those
would have to be in place by the 2026-27 school year and there is grant
money in the bill to aid with the anticipated costs.
Aside from when this special session will happen, it's difficult to
assess if there will be enough votes to pass all these bills.
The 67-67 House creates an unusual dynamic and a 34-33 Senate led by
DFLers doesn't leave much room for defections either.
The risk of a partial government shutdown and state employee layoffs
next month remains for areas without enacted budgets. Layoff notices
have started to go out to meet legal requirements for workers who could
be furloughed.
As some remote-work employees start shifting back to office assignments
under a Walz directive, state employee union leaders say the one-two
punch is a lot to handle.
Leaders of the Minnesota Association of Professional Employees wrote a
memo to rank-and-file members late last week under a bolded heading of
"Facing next week might feel scary."
"We know these coming days will be hard," it reads. "The people running
the state didn't give you the respect of a plan, but we'll make sure
you're not left in the dark. You keep Minnesota running."
https://www.mprnews.org/story/2025/06/02/special-session-looms-to-pass-re quired-budget
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