With end in sight, Minnesota Legislature draws dividing lines

The outlines of an election-year skirmish fell into place on Monday as a divided Minnesota Legislature rushed to put the finishing touches on a three-month session upended by the global coronavirus pandemic.

The fault lines deepened as Republicans pushed ahead with legislation to reopen businesses shuttered by DFL Gov. Tim Walz and Democrats ratified pay raises for state workers, some of whom are on the front lines of the pandemic.

The moves in the closing days of the Legislature came as the two sides have staked out contrasting packages of economic aid, with Republicans favoring tax relief for businesses and individuals and Democrats calling for direct aid such as housing assistance. Those differences, along with a multimillion dollar bonding bill to fund major public works projects, must be worked out by next Monday's scheduled adjournment date.

The public health crisis already has dramatically limited what legislators expect to accomplish this year. A projected $1.5 billion budget surplus in February evaporated into a $2.4 billion deficit this month, and more than 600,000 Minnesotans have filed for unemployment benefits since the pandemic began.

Republicans in the House argued Monday that the state's new fiscal outlook means they can't afford pay raises negotiated last fall between the Walz administration and state employee unions. Those contracts, which cover roughly 50,000 workers, include a 2.25% pay raise that kicked in last summer and another 2.5% scheduled to start in July.

"I think Minnesota state employees understand the situation we're in," said House Minority Leader Kurt Daudt, R-Crown. "While these contracts were negotiated before all of this happened, I think state employees understand that we're all in this together."

Daudt also has threatened to block any bonding bill in the House unless the governor ends his emergency powers, which are up for renewal on Wednesday. Walz's current stay-at-home order expires on Monday but could be extended.

"We need to focus our resources on providing the essential services that Minnesotans need, ensuring that we're doing everything we can to defeat COVID-19 and avoiding the short-term thinking that damages our state and our economy," said House Majority Leader Ryan Winkler, DFL-Golden Valley.

The DFL-led House approved the pay raises on a 74-60 vote, but the contracts must also be ratified in the GOP-led Senate, where some lawmakers want to cancel the next round of raises. Senate Majority Leader Paul Gazelka, R-East Gull Lake, said it would be irresponsible for the state to grant raises scheduled for July in those contracts when the economy is in a "free fall."

Meanwhile, Senate Republicans advanced a bill Monday that would allow businesses to reopen providing they follow state-issued guidelines on virus prevention. Under the proposal, state boards and licensing agencies couldn't issue additional fines to businesses that defy the governor's order to remain closed.

Republicans have questioned why small businesses remain closed while larger, big-box retailers have been allowed to stay open. Several also noted that other states are now moving toward letting hair salons and similar service businesses reopen.

"Right now people can go and purchase from a large competitor but can't purchase from a family business that has been in the area for many decades or for multiple generations," said Sen. Andrew Mathews, R-Princeton, a backer of the bill. The GOP reopening measure passed the Senate 39-28.

"To open more businesses, we need to take steps that are rooted in reliable science and data," said Sen. Bobby Joe Champion, DFL-Minneapolis. "The members of this chamber come from a lot of different backgrounds, but none of us are epidemiologists."

The two sides also have clashed on a flexible spending account set up to respond to COVID-19. The account, which started with $200 million, is now down to $65 million, and the deadline to use that money ran out Monday. Senators approved extending the deadline to Dec. 31. House Democrats, who had proposed extending use of the funds through June 2021, plan to take up the Senate's version Tuesday.

Staff writer Torey Van Oot contributed to this report.

Briana Bierschbach • 651-925-5042