Minnesota leaders reach $9 billion deal for tax and spending plans, leave details to lawmakers
With just a week left in the legislative session, the leaders set out their broad parameters for how the money should be spent and said conference committees would determine specifics for how the funds would go out over the coming days.
ST. PAUL — Minnesota legislative leaders and the governor on Monday, May 16, announced a more than $9 billion tax and spending plan complete with $4 billion earmarked for tax relief over the next three years and $4 billion in new funding for schools, health and human services programs and police agencies.
On Monday, Gov. Tim Walz, Senate Majority Leader Jeremy Miller, R-Winona, and House Majority Leader Ryan Winkler, DFL-Golden Valley, laid out the details of the proposal outside the Capitol. The outline sets broad criteria on how lawmakers should spend two-thirds of the state's remaining budget surplus. Another $4 billion will be set aside in case the economy takes a turn for the worse.
"There's an awful lot of the hard work of democracy yet to be done this week but the parameters have been set and they've been done in a way that should make Minnesotans proud," Walz told reporters.
Legislative leaders and the governor for weeks met behind closed doors to try and decide how best to spend down the budget surplus. They started with huge differences in their plans for how the Legislature should use the money and said Monday that they'd agreed on some general principles but would leave specifics up to conference committee leaders.
The outline breaks out like this:
- $4 billion is set to be used for a tax bill spanning the next three years.
- $1 billion in additional funding is set to go toward the state's public schools.
- $1 billion is set to be used on health and human services programs.
- $450 million is earmarked for public safety and judiciary funding.
- $1.33 billion will be used for other state government spending agreed to by the leaders, but the specifics weren't immediately made public.
- $1.4 billion was set to be used to fund a slate of local projects in a bonding bill.
Their framework also sets roughly $5 billion in proposed spending for the next state budget that is set to take effect next summer. All told, they outlined spending priorities to the tune of more than $15 billion over the next three years but not all of that money has come into the state's coffers, some of it is just projected at this time.
Lawmakers on conference committees at the Capitol should be able to use the framework to iron out differences between their spending plans for all areas of state government in the next week, the leaders said. But it didn't include specific terms for spending in each area, so lawmakers will have to quickly decide which priorities should get additional state money.
That could get dicey as leaders in the divided Statehouse try to make a case for their priorities.
"There's a lot of work to be done this week," Miller said. "We don't have a lot of time. We have a few days to get this all wrapped up. So the conference committees are working through the process as we speak."
Miller said he and House Speaker Melissa Hortman, DFL-Brooklyn Park, wrapped up the compromise agreement late Saturday in virtual meetings and brought the plan before their caucuses on Sunday. Hortman tested positive for COVID-19 last week and has been participating in negotiations remotely.
The bipartisan deal included pieces that both chambers wanted, the leaders said. For Democrats, that meant $1 billion in additional funding for schools and a smaller tax plan than Republicans had proposed. They also had to give up proposals to start a state-run paid family leave program and drop the amount of proposed payments for front-line workers.
"We've accomplished more with Republicans in the Senate, with the governor on a budget deal than we expected to be able to do it by this point in time," Winkler said. "So I think this is a pretty significant breakthrough and our members are appreciative of that."
Republicans wished the state would spend more on tax relief payments and less on additional government spending, but felt pleased with the compromise.
The legislative session is set to come to a close on Monday, May 23. And the deadline to finish passing bills is Sunday, May 22. Walz has previously said he would not call a special session if lawmakers were unable to wrap up their work before the deadline. And on Monday he said he believed the upcoming deadline would help them to act quickly.