Opinion editor's note: Editorials represent the opinions of the Star Tribune Editorial Board, which operates independently from the newsroom.
It took far too long, but the Minnesota Legislature finally achieved a deal that will fully replenish the Unemployment Insurance Trust Fund (UI) while also doubling front-line worker bonus amounts brokered in an earlier agreement.
Gov. Tim Walz marked the occasion with a ceremonial bill signing on Monday after a Friday signing that put the bill into law. Not every bill gets a ceremonial signing, but this one is worth celebrating. Some 130,000 businesses of every size and type across the state will see $2.7 billion in tax relief from this bill, mainly by sparing them the sudden and in some cases sharp increases in UI fund contributions.
Business owners were about to take a double hit from the pandemic. The state shut down many of them, triggering mass layoffs that sent unemployment levels soaring. Minnesota's fund, which had a healthy balance pre-pandemic, was sent into a shortfall, forcing the state to borrow from the feds. As part of pandemic relief, the federal government allowed some pandemic relief funds to restore state unemployment funds and send bonuses to essential workers who showed up for work that could not be done remotely.
Most states availed themselves of this option earlier. In Minnesota, the DFL House pushed hard for $1 billion in worker bonuses and attempted to limit business tax relief on unemployment to the same amount. The GOP Senate clung to an earlier agreement of $250 million in worker bonuses reached in 2021 before the last wave of federal relief and a larger-than-anticipated state surplus, but it insisted on a complete restoration of the trust fund.
Such protracted negotiations are common in divided government as opposing sides struggle to reach an agreement. But in this instance, talks first blew past a deadline in March for setting new rates, then past an even more critical deadline of April 30, when the first-quarter UI taxes came due. The Department of Employment and Economic Development must recalculate new amounts for UI business taxes, send them out and reimburse those that wound up overpaying. Walz hastily signed the deal on Friday because DEED could not legally start that process until it became law.
"Minnesota businesses, especially small businesses and their workers, were deeply impacted by COVID-19," DEED Commissioner Steve Grove said at Monday's signing. "This investment means we won't have to raise future UI tax rates right at this critical moment of expansion for Minnesota's economy." Avoiding those higher tax payments, he said, would free up money for business owners to put toward salaries, benefits and capital expenses as they make their way through the recovery.
Front-line workers, including those in health care, emergency services, child care, public transit, retail and other sectors will finally get long-delayed bonuses. Details are not yet final, but the state is working on an online application process, and workers can sign up for updates. They will have 45 days to apply once the application is available.
A threat rescinded
Another promising sign of progress at the Capitol recently came from an unexpected quarter. In an apparent olive branch, Senate Majority Leader Jeremy Miller said at a MinnPost event that he does not envision any further confirmation votes on commissioners this year.
"It's a very serious thing to confirm or not confirm commissioners," Miller said. "I think it is highly unlikely that any confirmation votes would come up between now and the end of session, unless something pops up that I'm not aware of."
Three high profile commissioners — Jan Malcolm at the Department of Health, Paul Schnell at the Department of Corrections and Jennifer Lemaille Ho at the Minnesota Housing Finance Agency — have all been targets of GOP criticism and are not yet confirmed, even though Walz is nearly done with his first term and gearing up for a re-election campaign.
Minnesota allows the Senate take a confirmation vote at any point in a governor's term, and failure to confirm triggers removal from office. During Walz's term, Senate Republicans voted down commissioners Nancy Leppink, at the Department of Labor and Industry, and Steve Kelley at the Department of Commerce in 2020. Laura Bishop resigned from the Pollution Control Agency in 2021 over threats of removal. Sen. Jim Abeler, the Republican lead on health care issues, said at an anti-vaccine rally last summer that he thought Malcolm deserved ouster, noting in a speech last summer that "It seems the only language the governor understands is the removal of another commissioner."
As noted in a previous editorial, this is a process ripe for an overhaul. Commissioners should not have confirmation threats hanging over their heads for the whole of their term. Such a provision also serves as a severe deterrent to drawing high-quality candidates.
There is far too much to do in the last few weeks of the legislative session to allow it to get bogged down in threats over confirmation, and we applaud Miller's decision to avoid such fights this year.