Lawmakers definitively approve $ 52 billion budget, avoiding state government shutdown

Minnesota House Speaker Melissa Hortman, DFL-Brooklyn Park, and Senate Majority Leader Paul Gazelka, R-East Gull Lake, speak to reporters on June 21, 2021. Photo by Ricardo Lopez / Minnesota Re-form

Minnesota lawmakers finally completed a new, two-year, $ 52 billion budget on Wednesday, with just hours to spare before parts of state government are temporarily shut down amid ideological differences within the legislature divided.

The last item in the budget, a nearly $ 21 billion education bill, passed unanimously in the Senate, having been retained as leverage until the House agreed to pass a bill. $ 900 million tax bill containing tax cuts for businesses and individuals, a top priority for Republicans. The Education Budget Bill was the last bill to be passed to avoid a partial government shutdown.

That left the tax bill hanging, but passing it wasn’t crucial to keeping the lights on for state government agencies.

“We’re almost at the finish line,” Senate Majority Leader Paul Gazelka of R-East Gull Lake said before the final votes. “The two were always meant to be the last two bills, taxes and education. Both parties think that both bills are important, but it is that confidence and that verification and so it is what we are waiting for. “

The final days of the session included the usual end-of-session bumps, with last-minute amendments threatening to derail a previous global deal. But the specter of a possible government shutdown seemed to motivate lawmakers to quickly resolve these latest blockages.

The GOP-led Senate and DFL majority House worked late Wednesday morning, arguing over the final details of a controversial public security budget bill that included modest police and police reforms. criminal justice that disappointed some Democrats.

One bump included a last-minute announcement by DFL Governor Tim Walz to end his emergency powers on July 1 after reaching a deal with the federal government to extend certain federal benefits like food stamps for several weeks in the absence of a declaration of emergency in peacetime.

Walz had hoped the legislature would approve an amendment to the state government budget bill that gives the governor continued authority to manage a public health emergency, but lawmakers ultimately removed that language and voted to end its emergency powers.

The education budget bill includes a 2.45% increase in the general education funding formula in 2022 and a 2% increase in 2023, which will cost the government nearly $ 463 million. over the next two years.

State Senator Roger Chamberlain, R-Lino Lakes, said the formula increases were the “fairest” way to give money to school districts without strings attached. “Big increases in spending, few mandates,” he said.

The tax bill that lawmakers will vote on will exempt not only unemployment benefits from state taxes, but also paycheck protection program loans to businesses that have struggled during the pandemic. It is also providing government funding for an engineered lumber plant in Cohasset in return for government funding for a study to build a land bridge over Interstate-94 in the St. Paul’s Rondo neighborhood.

The bill includes changes to the state 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 .

The tax hikes on the wealthiest Minnesotans, called for by Walz earlier this year and opposed by the GOP, were not included in the final deal.

It will also establish a film production tax credit of $ 5 million each year for fiscal years 2022 to 2025.

Gazelka said the legislature was unlikely to adjourn the special session on Wednesday evening, saying a public works loan bill was still being negotiated.

Another reason lawmakers were not adjourning yet was to make sure Walz signs all budget bills, Gazelka said.

Yet lawmakers plan to return in another special session in September to adopt recommendations made by a task force on how to provide a $ 250 million bonus to essential workers who have been excluded from relief aid. Previous COVID-19 and were forced to use their sick leave and vacation to care for themselves or others.

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