The Minnesota Legislature’s special session ended early Saturday morning, June 20, with significant unresolved issues.
After middle-of-the-night negotiations yielded no progress, Senate Majority Leader Paul Gazelka told the sleep-deprived Senate, “We need a break from each other and this place.” The Senate then adjourned sine die at 5:00 a.m.; the House followed suit around 6:45 a.m.
The final 24 hours of the session had been a high-wire act of partisan sniping in public and frantic negotiations in private. Although there were major differences over COVID-19 funding, the bonding bill and taxes, many hoped they could find resolution. Lawmakers were unable to overcome disagreement on policing and criminal justice reform, which became a lynchpin issue.
Friday morning began with heated debate in the House on SF47 (Rosen). The bill proposed to appropriate $841 million in relief for local governments to address COVID-19 costs. Disagreement fomented after the House Democrats in the Ways and Means Committee amended SF47 on Thursday to include certain of the Governor’s supplemental budget recommendations. The amendments added temporary raises for personal care attendants, additional funding for the child care assistance program, and other measures not previously agreed to by Senate Republicans in a bipartisan deal. The changes drew a rebuke from House Republicans who described it as full of budgetary “shifts and gimmicks.” The collapse of agreement on SF47 spiraled into an impasse on more significant issues.
Despite the gridlock, a few smaller bills managed to pass both houses of the Legislature, such as an education policy bill (HF33) and a bill that further aligns the childcare assistance program (CCAP) with federal requirements (HF41).
The House and Senate didn’t reach any overlap on proposals for police reform. After nearly seven hours of debate on Thursday evening, the House amended all of their proposed criminal justice reform measures onto SF104 (Limmer), passing them 71-59 and sending them back to the Senate. Although Senate Republicans and House Democrats traded offers late into the evening on Friday, their respective negotiating positions barely moved.
At this writing, Governor Tim Walz likely will call the Legislature back in a second special session within a few days or weeks.
Regular session: From Surplus to Bust
Policymakers walked into the session with a $1.5 billion surplus that some envisioned using for supplemental investments while others had plans for tax relief. However, that surplus was quickly erased and turned into a projected $2.4 billion deficit in light of the pandemic. Minnesota cannot deficit spend so this budget problem must be addressed by June 30, 2021. The Legislature and Governor are not required to balance the budget against the recent budget projection and will have until early December (the next full economic forecast) to better understand how the pandemic is affecting the state’s economy.
While federal CARES Act aid and FEMA reimbursement funds should provide some relief for the state, there are other factors to consider. If the Legislature is not in session, the Governor must exhaust state budget reserves before considering more drastic unallotment powers, which would permit him to cut funding for existing programs.
Minnesota Management and Budget (MMB) Commissioner Myron Frans has voiced fears of draining the reserve right now to balance the budget due to uncertainty around how the pandemic will evolve later this year.