Minnesota lawmakers slog away at state budget impasse (again)

Axios

06-06-2025

Minnesota lawmakers are at risk of blowing through another self-imposed target for finishing the state budget.
State of play: Legislative leaders and Gov. Tim Walz want a special session to pass the remaining bills by the end of this week, so that tentative layoff notices won't go out to tens of thousands of state workers on Monday.
Yes, but: The path — and the vote math — for getting the full budget across the finish line remained a work in progress as of Thursday, as leaders and chairs continued to negotiate (and re-negotiate) a slew of hot-button policy and spending issues that have tripped up talks for months.
The big picture: The Legislature is about as closely divided as it can get — with a tied House and Democrats holding a one-vote majority in the Senate.
Those dynamics, plus political differences within the two caucuses and the threat of a projected deficit in future years, have made this two-year budget an especially complicated plane to land.
What they're saying: "We're at a point right now where, quite candidly ... every single legislator is potentially a veto over the whole deal," Walz told reporters Wednesday.
Friction point: Part of the challenge, Walz and other leaders say, is that multiple issues, disputes and details threaten to derail the delicate "deal" leaders announced near the end of the regular session.
To resolve them, leaders must make changes that appease certain members and constituencies whose votes are needed, without alienating others whose votes are also essential.
Zoom in: Some of the outstanding hangups are tied to issues that have been sticking points all session, while others are smaller policies that matter to individual legislators whose votes are needed.
They include:
🩺 MinnesotaCare: Progressive Democrats won't vote for a budget bill that includes the agreement to end state-subsidized health care for undocumented adults, meaning the rollback would need to pass as standalone legislation with many GOP votes.
Republicans, fearful of being double-crossed by Democrats and Walz, want language tying the fate of other critical issues to the MNCare legislation's enactment as a failsafe.
💰 Taxes: Leaders intervened after a bicameral, bipartisan working group failed to strike an agreement on a tax package, releasing a "skinny bill" that sticks to policies included in the framework leaders signed off on in late May.
Tax chairs from both sides of the aisle rejected that compromise measure straight away, sending negotiators back to the drawing board.
While the Legislature doesn't need to pass a tax bill as part of the budget, the revenue impacts matter for the state's bottom line.
🚙 Local funding: Language in a transportation spending bill that would shift some sales tax revenues from metro counties to the Metropolitan Council was met with blowback from local leaders and some legislators.
A chair involved in negotiating that provision issued a statement Thursday raising concerns about how it came together and calling for more public input on the idea.
⚡️ Data centers and more: Behind-the-scenes negotiations are still swirling on a host of other hot-button issues, including potential changes to Minnesota's new ban on non-competes, tweaks to the Earned Sick and Safe Time law and proposals related to taxes and incentives for data centers.
🚧 Bonding: Talks are also ongoing on whether to tackle a capital investment package authorizing hundreds of millions of dollars for roads, infrastructure and other construction projects.
That needs bipartisan support in both chambers to pass.
📆 Schedules: Legislators are people too, and the start of summer brings graduations, weddings, vacations, and other conflicts and commitments that can complicate attendance (and votes), especially on the weekends.
Case in point: One member has a family funeral this weekend, Walz noted, and DFL Sen. Nicole Mitchell is scheduled to spend part of Monday at a hearing for her upcoming burglary trial, which is set to start June 16.
Wild card to watch: Senate Republican Leader Mark Johnson didn't sign the budget framework agreement reached in late May. That's notable because Senate DFL Leader Erin Murphy will need their votes to pass budget bills that can't get support from members of her caucus and to suspend rules for a speedy special session.
Whatever concessions and changes Senate Republicans seek in return for their support could result in leaders losing votes from more liberal factions of the DFL caucuses.
What's next: If the Legislature isn't done by Monday, tens of thousands more state workers will get formal notice that they may be temporarily laid off if lawmakers fail to meet their June 30 deadline for getting the budget done.