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Minnesota Update
Legislature is Back to Work
The Minnesota Legislature returned to work today with less than six weeks to go in the 2023 legislative session. Appropriations committees will meet throughout the week to pass budget related bills as legislative activity transitions to the next phase of the process.
Budget Process
The House Ways and Means Committee and the Senate Finance Committee, as well as the Tax Committees have their work cut out for them over the next few weeks. To meet the third deadline last week, each budget area had to pass their respective budgets out of their committees to the Finance or Ways and Means committee. The next step is to pass each budget bill through the Taxes and Finance or Ways and Means committees to the House and Senate floor. Once the bills are passed by each body, they are compared, and a conference committee is named for the bills that are not identical. For major budget bills, five members of the House and five members of the Senate are appointed to a conference committee to resolve all differences in the bills. Generally, the governor and his department staff will join in on the negotiations. Once each budget area is resolved, the bills are passed again by the House and Senate a final time. Upon passage, each bill is sent to the governor for his signature or veto. Since the governor and legislature have agreed upon all targets for each committee, and the overall spending target, they are a step closer to finishing on time. A global agreement is usually not reached until closer to the end of session. The governor has stated that he believes they will finish on time, which hasn’t happened in recent years.
Paid Family and Medical Leave
A high-profile proposal moving through the committee process is SF 2 (Mann)/HF 2 (Richardson), which would establish the Paid Family and Medical Leave Program. Committees in both the House and Senate are anticipated to hear the bill this week. The current proposal sets up a paid family and medical leave insurance plan funded by a 0.7 percent payroll tax and managed by the Department of Labor and Industry. The bill would allow for up to 12 weeks of benefits for a serious health related condition or pregnancy and up to 12 weeks for bonding, safety leave, or family care. In a recent amendment, the construction industry is provided an exemption if it is explicitly stated in their collective bargaining agreement, and the section of law allowing for the exception is also cited in the collective bargaining agreement.
A recent fiscal note was released, and the bill will cost the state $1.7 billion at the outset of the program for IT infrastructure, outreach, business process infrastructure, and other administrative and implementation costs. The bill also pre-funds the Paid Family and Medical Leave Insurance Account to allow for the launch of benefits and premiums. The 0.7 percent payroll tax begins on July 1, 2025.
Legislative Deadline to Adjourn
The Minnesota Legislature is constitutionally required to adjourn the regular session no later than May 22, 2023.
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