Minnesota lawmakers and Gov. Tim Walz on Wednesday succeeded in approving a record $52 billion two-year state budget to avoid a government shutdown that would have served as a havoc-wreaking capstone to an already havoc-filled period in the state’s history.
The House remained locked in debate over a tax policy bill after 11:30 p.m. and appeared fated to continue for some time, but the spending bills necessary to keep state government open were all passed by both chambers hours before a fiscal midnight deadline.
After emerging from a chaotic crucible of overnight deal-making Tuesday into Wednesday, all the major players strode into Wednesday evening with a swagger backed by words of imminent success, and Walz said he expected to sign all 13 bills approved by both chambers Wednesday night.
In one sense, they only did their most basic job: They agreed on how to spend taxpayers’ money for state services that range from parks to prisons and highways to health programs.
In another sense, they accomplished — or stood on the cusp of accomplishing — what no other state government has had to grapple with in more than two years: A Legislature evenly divided between two parties.
And that, of course, was only enhanced in a state emerging from a pandemic and still reeling from the traumas of unarmed Black men killed by police — and the reckoning and unrest that followed. After all, until a few weeks ago, the Capitol itself was closed to the public for COVID-19 concerns and fenced off for security concerns, under the watchful protection of state law enforcement and the Minnesota National Guard.
“It was just more difficult,” not-fully-rested Senate Majority Leader Paul Gazelka, R-East Gull Lake, said to reporters Wednesday afternoon. “We really needed the extra month.”
That extra month (actually closer to a month and a half) followed because Republicans who control the Senate and Democratic-Farmer-Labor Party members who control the House failed to find common ground in May, when the state constitution mandates the Legislature adjourn. The recent activity is the result of a special session — the latest in an unprecedented sequence of special sessions required for Walz to keep his pandemic-related emergency powers.
Political veterans weren’t surprised that it took so long, or that it took a harrowing deadline to force intransigent or stubbornly principled lawmakers to compromise. This year’s prospect of the shutdown was scarier than previously because an opinion by the Minnesota Supreme Court suggested that, legally, a shutdown would have forced everything to stop. Like, state prisons would have theoretically had to open their cells.
What was remarkable about this year’s protracted proceedings was that there’s an excess of cash in the state. Since the pandemic began, some $18 billion in federal COVID relief or stimulus funds has flowed into the state. Not all of that is state government money, but as late as May, lawmakers learned how they would be permitted to spend roughly $3 billion in federal funds.
So the financial arguments weren’t the perennial narratives of Democrats raising taxes versus Republicans cutting services. In fact, the new budget — which breaks $50 billion for the first time and is a state record even in inflation-adjusted dollars — was poised to cut taxes by close to $1 billion while still increasing spending all over the place.
For example, under the budget, public schools will receive the largest per-pupil funding increases in 15 years, public defenders will see 21 percent more funds heading their way, and state law enforcement officers will see pay raises. (No one at the Legislature actually proposed “defunding” law enforcement in state law.)
The education bill was the one Walz, a former high school teacher, picked for a Wednesday evening photo-op, as he signed it and strode across the Capitol campus with his wife, Gwen, a public school administrator, to hand-deliver it to Secretary of State Steve Simon. He said it was “fitting,” given how the closure of schools became such a life-altering experience for many families and professionals during the pandemic.
Walz reflected on the success of reaching a budget deal. “You shouldn’t get patted on the back for doing what you’re supposed to do, but I’m telling you, in 2021, trying to legislate in this climate with a divided Legislature, it is quite an accomplishment,” he told reporters.
The biggest obstacles — the ones that kept lawmakers in pitched battles until close to the bitter end — to bipartisan agreements weren’t financial, but ideological and relevant to the moment.
Democrats, led by the DFL’s People of Color and Indigenous Caucus, pushed to the end for changes to laws governing police tactics and conduct that they said would improve public safety by protecting people, especially Black men, from avoidable use of force, while Republicans held firm against initiatives they believed will make it harder for law enforcement officers to apprehend criminals and keep the peace.
In the end, Democrats claimed several victories, such as reforming how warrants are served and increasing transparency for police misconduct, but fell short of many of their aspirations, such as banning armed cops from stopping motorists for relatively minor equipment violations.
Republicans never eased up on a roughly yearlong campaign to end Walz’s emergency powers, ultimately succeeding when the House voted unanimously to end the state of emergency July 1 as part of a larger budget agreement. Gazelka also pointed to a plan to subsidize the individual health insurance market to keep premiums lower as a priority Republicans achieved. Republicans were also able to stymie early hopes of Democrats and Walz to increase state income taxes on the wealthiest fraction of Minnesotans.
Democrats will be able to claim a tapestry of victories in their wheelhouse. At the most basic level, scores of programs for the poor — often targets of Republicans — were unscathed, while a number of new programs aimed at encouraging racial equity in various sectors were adopted. Democrats also fended off a Republican attempt to squelch a Walz “clean cars” initiative to mandate more electric and hybrid vehicles be stocked in auto dealerships and scored a regulatory victory by banning a family of chemicals, known as PFAS, from being used in food packaging.
House Speaker Melissa Hortman, DFL-Brooklyn Park, was unavailable for comment while the House worked through final passage of the tax bill.
The Legislature is also expected to return for yet another special session in September, primarily to hammer out how to distribute $250 million in “hero pay” to compensate workers — which workers hasn’t been determined — who battled the coronavirus pandemic.
Neither chamber in the Legislature was preparing to actually adjourn Wednesday. The fiscal deadline to pass bills and avoid a shutdown isn’t connected to lawmaking during a special session. It’s unclear if anything more will get done, but Gazelka noted that it’s possible a deal could be hatched on a public works construction package, known as a “bonding bill” because it’s financed by taxpayer-guaranteed loans. Proponents of a bonding bill have been hoping for a suite of local infrastructure projects in the neighborhood of $500 million to $600 million.
Gazelka said it’s also prudent for the Legislature technically to remain in session, should any late-breaking dramatics break out.
I think it’s ‘trust, but verify,’ ” he said, referring to the DFL-controlled House and Walz — whom Gazelka is considering challenging in the 2022 election.