Where big issues stand at the Minnesota Legislature

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On the final day of the regular legislative session, Minnesota’s legislative leaders and Gov. Tim Walz agreed on an overarching plan for the next two years of state spending.

But the Republican-controlled Senate and DFL House are headed into overtime to sort through the details of the $52 billion budget plan and to try to agree on controversial policy provisions. They expect to return for a special session in mid-June, and will continue budget negotiations in working groups before then.

Here’s where the key issues stand at the end of the regular 2021 legislative session.

Bonding: The Legislature typically passes a large public works borrowing bill in even-numbered years, and last October legislators approved a historic $1.9 billion bill. However, smaller bonding measures often pass in odd years — when the main focus is the state budget — and Gov. Tim Walz proposed a $518 million state infrastructure package this year, which includes funding for building projects at colleges and universities, Twin Cities communities damaged by unrest, housing and Capitol security.

Senate Capital Investment Committee Chairman Tom Bakk, I-Cook, has suggested a $240 million bill along with the $179 million infrastructure investment from the federal government. House Democrats have pushed for a roughly $1 billion package.

The budget agreement Walz and legislative leaders reached Monday simply says “TBD” for a bonding bill. The agreement included $100 million for housing infrastructure bonds, but notes that the state will not move forward with selling those bonds if Congress passes a federal infrastructure bill that includes housing funds. DFL House Speaker Melissa Hortman said Monday they have not yet started bonding negotiations — or even decided who will be involved in them.

Budget:House and Senate leaders and Walz struck a big-picture deal Monday on spending for the next two years, agreeing that Minnesota’s budget should total about $52 billion. Their budget framework includes $525 million of additional education spending, a key priority for Democrats. Republicans highlighted that the deal does not contain any tax increases.

The work of crafting the next budget is not over. State agency commissioners and legislative committee chairs are supposed to reach agreements on the language of various issue-specific budget bills by June 4. Their ultimate deadline to pass a budget and avoid a government shutdown is June 30.

Education funding: An increase in education funding was a top priority for Democrats this session. Lawmakers agreed to spend $525 million more on early through high school education in the next two-year budget and $675 million over the following two years.

In addition, there is another $1.3 billion of federal money going directly to schools, Hortman said. And she said Walz plans to act Tuesday to devote another $75 million from a different pot of federal money to support summer learning.

Election law: The election of 2020 has hovered over the debate on new state voting law proposals in more ways than one this session. Although no evidence exists of widespread voter fraud, Senate Republicans cited the threat of voting fraud more generally in proposing a new voter ID law that would require photo identification at polling places. Democrats have pointed to that and other proposals as part of a nationwide trend of Republican lawmakers seeking to make it more difficult to vote.

Though the measure did not make it into the Senate omnibus bill being debated in conference committee, the GOP-led Senate passed it as a standalone bill earlier this month on a strictly party-line vote. It is roundly opposed by Democrats, who control the state House. But its chief sponsor, Sen. Scott Newman, R-Hutchinson, has said it was brought up this session with an eye toward stoking further debate in 2022 when all 201 seats of the Legislature are again up for grabs. The Senate’s GOP leadership is still proposing provisional balloting for voters who register on Election Day, something Secretary of State Steve Simon is warning would “dismantle” Minnesota’s same-day voter registration system and its history of high voter turnout. Republicans also want to eliminate a state law allowing others to vouch for the eligibility of voters.

Democrats in the state House, meanwhile, want to pass legislation that would restore voting rights to people on probation — but not incarcerated — for felony crimes and to automatically register Minnesotans to vote when they are certified for a driver’s license. Few of the top priorities in either chamber have much of a chance to net common ground this year. But state officials like Simon are hopeful that some temporary measures adopted during the COVID-19 pandemic — including giving election workers 14 days to count early ballots as opposed to seven — can become permanent.

Emergency powers: Republicans in the House and Senate have continued to press for an end to Walz’s executive powers, while the Democratic governor maintained Monday that he still needs the powers to continue vaccination efforts. He recently extended the state of peacetime emergency into mid-June. Emergency powers debates will be part of the ongoing policy negotiations that continue after the regular legislative session ends.

GOP lawmakers have also been adamant that they should have a say over how the state government spends $2.8 billion from the American Rescue Plan. They do not want Walz to control the dollars. The deal leaders negotiated allows legislators to help guide the bulk of the spending. However, Walz would have authority over $500 million in federal funds.

Guns: Firearms legislation fell by the wayside in the divided Legislature this year. DFL priorities such as expanding background checks or passing a new “red flag” to remove guns from people deemed dangerous received scant attention for most of the 2021 session, until a resurgence in mass shootings around the country revived momentum in the spring. Still, Republican Senate leaders refused to consider the proposals — which also failed to pass the Legislature each of the previous two years Walz has been in office and Democrats controlled the House. A GOP-favored “stand your ground” bill to strengthen legal protections for citizens who use deadly force to defend themselves or their property has also not advanced this year, with Senate leadership more focused on the budget instead of passing new policy. Meanwhile, a DFL proposal to ban firearms on the Capitol complex amid heightened security concerns failed to gain momentum.

Marijuana: The House passed a proposal to legalize marijuana for adult use, the first time in state history such a proposal has ever made it that far. The bill would legalize recreational marijuana for adults, set up a marketplace for selling it and establish two tiers of expungement for people with prior cannabis convictions. People with misdemeanor, cannabis-only convictions would automatically have their records expunged, and any higher-level convictions would go before an expungement review board. But despite six Republicans supporting the bill in the House, the GOP-led Senate has signaled no interest in legalizing marijuana for adult use.

However, both the House and Senate have gotten behind a push to add the smokable raw flower version of marijuana for adults to the state’s medical marijuana program. Minnesota’s program currently only allows the more expensive cannabis oils and extracts.One of the final measures the House and Senate passed during the regular session was a health bill that included the change, which lawmakers said will help make medical marijuana in the state significantly more affordable.

Police reform: The Legislature passed a major police reform package last summer in the aftermath of widespread outrage over George Floyd’s killing. But most Democrats and community activists insist much more needs to be done. The April police killing of Daunte Wright in Brooklyn Center further intensified debate over the future of policing in Minnesota. Democrats added to an already sweeping slate of police reforms new proposals to limit when police can stop motorists and an effort to curb the need for arrests in cases where people have missed court dates for certain lower-level charges.

The Senate GOP has insisted on focusing on the budget this session, while Democrats are proposing at least a dozen new police accountability bills. They also include a ban on law enforcement affiliating with white supremacist groups, model policies for responding to public assemblies, citizen review boards for law enforcement, new regulations for no-knock warrants and limits on when police can pull over motorists. After striking an agreement on budget targets, Senate Majority Leader Paul Gazelka repeated that he would “remain committed to not passing anything that is anti-police or makes the job of law enforcement more difficult.” Gazelka has singled out ending qualified immunity and expanding citizen oversight for police as policies he does not support.

PPP: Businesses that received federal payroll loans during the pandemic will get tax breaks under the agreement lawmakers and Walz reached Monday. They decided to fully conform with the federal government, which moved last year to exempt all forgivable Paycheck Protection Loan income from taxes. They also agreed that Minnesotans who received unemployment benefits during the pandemic should get a tax break on up to $10,200 of that income. However, they have yet to pass either of those changes.

The Legislature adjourned on the tax filing deadline. The Department of Revenue is currently looking into options so that taxpayers would not have to refile their taxes.

Taxes: One of the biggest clashes of the session was whether to raise taxes on some Minnesotans to help pay for programs for those hit hardest by the COVID-19 pandemic. Walz and House Democrats had pitched a new fifth tier income tax increase on the state’s highest earners — married joint filers making $1 million or more, and single filers making $500,000 a year — as well as higher taxes on corporations. House Democrats also suggested gas and tobacco tax increases. Republicans drew a hard line against new tax increases this year, arguing the state has a surplus and should be providing relief for taxpayers coming out of the pandemic.

GOP lawmakers prevailed and the next budget does not include any tax hikes, as part of the budget deal. Instead, it will have a $754 million tax reduction over the next two years, and a $180 million drop in the following two years. The bulk of that $754 million is going to PPP and unemployment insurance tax breaks, Hortman said, which leaves $110 million in tax relief that the tax working group must decide how to handle over the coming weeks.

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