Minnesota lawmakers emerged Thursday after weeks of deal-making with a completed two-year state budget, one they say will be essential to lifting the state out of the fog of the COVID-19 pandemic.
Gov. Tim Walz marked the occasion at the Capitol, surrounded by nurses, doctors, business owners and students he's met over the past year responding to the health crisis.
He lauded the $52 billion budget as one that will focus on those hit hardest by the uneven toll of COVID through tax breaks, direct relief checks and funding flowing directly into classrooms.
"That long dark winter has ended, the sun is now shining on the summer," Walz said in the Governor's Reception Room, which hadn't been used since the pandemic hit in March 2020. "Now the work of recovery begins, and that's what this budget is about."
Divided government meant it took until just hours before a midnight deadline Wednesday for lawmakers to pass the final piece of the budget, an education finance package that was a top priority for Democrats and will pump $1.2 billion into classrooms.
Debate stretched into the early hours of Thursday on a tax-cut package that will spread out nearly $1 billion in relief over four years, focusing on businesses and workers that received federal pandemic aid.
Senate Republicans' top priorities were ending Walz's pandemic emergency powers and providing tax relief, said Senate Majority Leader Paul Gazelka, R-East Gull Lake.
"Those are the two things we really felt were important," he said.
But the budget tackles other issues that have been at the forefront in Minnesota over the past year, including the killing of George Floyd under the knee of a Minneapolis police officer.
Legislators struck a deal on a handful of police accountability measures, as well as transportation infrastructure spending, an off-ramp for the state's eviction moratorium and a spending boost in health and human services.
"It was because we were willing to look for win-wins that we were able to get some really significant Democratic wins with the divided Legislature, and Senator Gazelka was able to get some very significant conservative wins," said DFL House Speaker Melissa Hortman of Brooklyn Park.
Now that the dust has settled on the 2021 special session, here's where the big issues landed:
Emergency powers
Walz announced late Tuesday that he would end his COVID-19 emergency powers Thursday after reaching a deal with the U.S. Agriculture Department to protect funding for the Supplemental Nutrition Assistance Program. The House and Senate followed Walz's announcement with votes overnight Wednesday to end the executive authority that the governor had exercised since March 2020.
Public safety
The DFL-led House offered a dozen proposals during budget talks, but Senate Republicans vowed not to pass anything they perceived as "anti-police." Both sides eventually agreed to a public safety spending bill that includes new regulations on "no-knock" warrants and police management of confidential informants. Lawmakers agreed to add "sign-and-release" warranting, which would no longer require police to arrest someone who missed a court date for certain low-level charges. They also approved an amendment penalizing people for sharing personal information about a law enforcement officer, such as their home address. Walz intervened days before the end of the session to impose executive actions related to community safety grants, the police licensing board and body camera regulations for state-level law enforcement agencies.
Taxes
Negotiators agreed on a tax package focusing on businesses that received federal payroll loans and workers who collected unemployment checks during the COVID-19 pandemic. The bill also extends tax credits for working families, historic preservation, film production and angel investors. Last-minute additions to the legislation included funding for project development of the Rondo land bridge over Interstate 94 in St. Paul.
Education
Lawmakers opted to pump $1.2 billion more into the state's classrooms over the next four years. It's the single-largest boost in school funding in 15 years, increasing the per-pupil funding formula that supports school districts by 2.5% next year and 2% in 2023. The deal also will put more money toward hiring and recruiting teachers of color and Indigenous teachers, and increase suicide-prevention training and grants.
Pandemic worker pay
Minnesota workers who have been on the front lines of responding to the pandemic will get cash payments from the state under an agreement lawmakers added to the tax bill. A nine-person commission will determine who qualifies for the aid and how much people will receive. The commission is supposed to wrap up its work by Sept. 6, to be followed by another special session to enable legislators to sign off on the plan.
Reinsurance
Lawmakers ensured that the state's reinsurance program will continue through at least 2022. The four-year-old program has been credited with keeping premiums low for individuals in Minnesota's insurance market and serves as a financial backstop for health insurers who encounter enrollees with expensive health conditions. Keeping the program afloat has been a priority for Republicans, who say that Walz and Democrats have wanted to get rid of it in exchange for single-payer health care in Minnesota.
Eviction moratorium
Legislators reached a deal on a 105-day plan to phase out the eviction moratorium that Walz put in place at the start of the pandemic. Minnesotans cannot be evicted for failing to pay rent until June 1, 2022, if they have pending requests for assistance through renthelpmn.org or 211. Landlords will have to give renters 15 days' notice before eviction, a provision DFLers had pushed for.
Elections
The bill that helps fund elections did not include a GOP push for a new law requiring voters to have state-issued IDs to cast ballots. Republicans also failed to advance a new provisional ballot system. DFL priorities, such as automatic voter registration, a permanent end to the witness requirement for absentee voting and increased enforcement against voter intimidation, did not survive. Lawmakers did, however, agree to a new security requirement for absentee ballot drop boxes, which were popular in the 2020 election amid the pandemic. Under the new law, security cameras must monitor drop box sites at all times.
Environment
A compromise environment finance bill bans "forever chemicals" in food packaging and frees up more than $130 million in spending by the Environment and Natural Resources Trust Fund for such projects as combating toxic algae blooms and fighting invasive carp. Despite a push from Republicans, the deal did not delay or eliminate so-called "clean cars" emission standards proposed by the Walz administration.
Bonding
Legislators passed a technical bill that makes some adjustments to the historic $1.9 billion public works borrowing bill they approved last year. However, they did not agree to another bill to fund construction projects during this special session. Lawmakers typically pass so-called bonding bills during even-numbered years but had discussed a smaller package this session. Gazelka suggested Wednesday that they could work on a bonding package in September, when legislators are expected to return to the Capitol to sign off on a pandemic worker pay plan.
