Minnesota Legislative Update Budget Negotiations Stall

Faegre Baker Daniels

With 10 days to go until the Minnesota Legislature must adjourn, budget negotiations between Governor Walz and House and Senate leadership have stalled. In turn, the work of conference committees, who need agreed-to budget targets to finish their work, has slowed considerably. Most of the committees’ work has focused on addressing same and similar language contained in the bills. This weekend, legislative leadership and Governor Walz will put politics aside as they attend the Governor’s Fishing Opener in Albert Lea. Perhaps this will be an opportunity to move negotiations forward.

As negotiations continue, House and Senate floor activity has focused on smaller bills as the chambers clear calendars in anticipation of a timely conclusion to session. This is in stark contrast to the omnibus bills that dominated long floor sessions in prior weeks.

Budget Negotiations

Budget negotiations between Governor Walz and legislative leaders of the House and Senate have stalled. The parties have been attempting to work through their fundamental differences and secure joint biennial targets since last Monday. Despite their negotiation attempts, joint budget targets were not agreed upon by the self-imposed Monday deadline, nor were they agreed upon by the end of the work week. This has prevented conference committees from addressing the major budgetary differences in their bills.

The impasse centers around he House and Governor’s proposals to increase the gas tax 20 cents a gallon and impose a sales tax in the metropolitan area to fund transit. While Senate Republicans have indicated a willingness to invest more in transportation and transit, Senate Majority Leader Paul Gazelka (R-Nisswa) explicitly stated “the gas tax is not going to happen,” suggesting it is a non-starter for budget negotiations. House Democrats and Governor Walz remain insistent upon a gas tax increase. They cite the status of Minnesota’s road system having a D+ grade from the Society of Civil Engineers and argue that a long-term, dedicated revenue stream is necessary. The two bodies also disagree on the health care provider tax. Current law sunsets the provider tax at the end of 2019 which was established to fund MnCare.

During budget meetings with leadership, Governor Walz offered cutting $200 million from his budget and House Democrats offered to decrease their proposal by $664 million. Senate Republicans continue to stand their ground regarding their budget total but did indicate they are willing to shift appropriations around within their proposal. The fundamental impasse currently is the two differences in funding state government. The Governor and House supports raising revenues to invest in Minnesota priorities, while the Senate supports reforms and using existing dollars.

While the last negotiation session was Tuesday, informal discussions have continued during the week. The next session is scheduled for Sunday, after the Governor and legislators return from fishing.

Regents Elected

At a joint convention on Thursday, members of both chambers voted to elect four new members of the University of Minnesota’s Board of Regents. Those appointed include: Judge Janie Mayeron (5th Congressional District), Mike Kenyanya (student seat), Mary Davenport and Kao Ly Ilean Her (at-large seats).

The selection was initially delayed due to disagreements among House Democrats regarding diversity on the board. Some argued that a more diverse board would focus efforts on increasing minority student retention and recruitment. The conflict was resolved by this week’s vote and members were elected without any arguments on the floor.

Key Dates:

  • May 13, 2019 – Conference Committee Reports Due to Original Body
  • May 20, 2019 – Last Day of the Legislative Session

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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