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March 1, 2021

February Budget Forecast Released

On Friday, February 26, 2021, Minnesota Management and Budget (MMB) released its February budget forecast showing a projected surplus of approximately $1.6 billion for the next two-year budget cycle. That is an almost $3 billion swing from the last budget forecast, released in early December 2020, that projected a nearly $1.3 billion deficit. MMB credits increased tax collections, lower-than-expected state spending, and the federal COVID-19 stimulus package for the significant swing.

The news comes with a sense of relief for lawmakers who have been preparing for difficult decisions and contentious debates as they considered the tax proposals and budget cuts needed to balance the state budget. A hefty budget surplus makes passing a balanced state budget (as required by the state’s constitution) an easier feat to accomplish by the time the legislature adjourns on May 17, 2021.

Find more information on the state’s budget forecast here.

State Aid for Emergencies (SAFE) Account Moves in Senate

The Senate Finance Committee met Thursday,
February 25, 2021, to advance S.F. 1354 (Weber), which would appropriate $15 million to local law enforcement agencies should they be called into action to respond to public safety events. This was the last committee stop for the bill prior to being taken up by the full Senate.

The proposal remains highly political and a significant gap still exists between S.F. 1354 and the proposal released by the Walz Administration. The House companion, H.F. 455 (Mariani), has not advanced since February 18, 2020, when it failed on a 62-72 vote. Legislative leaders are expected to continue negotiations throughout the weekend in hopes of reaching a deal before the Derek Chauvin trial begins on March 8.

Important Dates

March 12
1st Committee Deadline - committees must act favorably on bills in the house of origin

March 19
2nd Committee Deadline - committees must act favorably on bills, or companions of bills, that met the first deadline in the other house

March 26 - April 5
Easter/Passover Break - the legislature is in recess

April 9
3rd Committee Deadline - committees must act favorably on major appropriation and finance bills

May 17
The legislature must adjourn

Please note: Committee deadlines do not apply to the committees on Capital Investment, Ways and Means/Finance, Taxes, or Rules and Legislative Administration.

Federal Update

American Rescue Plan Act of 2021

The United States House will likely approve nearly $2 trillion in spending to respond to the coronavirus crisis and its effects, on top of multiple laws since last year that support families, workers, businesses and the economy. Democratic leaders are focused on enacting $1,400 stimulus payments by the middle of next month and following up with a jobs and infrastructure measure that could have a price tag of as much as $3 trillion.

The next step for the bill will be moving it in the Senate; the Senate must move quickly to get it passed and signed by the president by March 14 for enactment before unemployment benefits expire.

Highlights of the American Rescue Plan Act of 2021 include:

  • Direct payments of $1,400 for individuals earning up to $75,000 a year (couples $150,000); additional $1,400 per dependent;
  • Public health: $7.5 billion for vaccine administration; $46 billion for COVID-19 testing and tracing; $2 billion for personal protective equipment and supplies; $10 billion for Defense Production Act supply needs;
  • Reopen schools: $128 billion in grants;
  • Child care: $15 billion grants; $1 billion for Head Start;
  • Extended unemployment benefits: $400 per week through the end of August
  • Rental assistance: $25 billion;
  • Child tax credit hike: $300 per child, per month, from July through the end of 2021 for families eligible for the full credit;
  • Earned Income Tax Credit expansion for low-income workers without children;
  • $15 per hour federal minimum wage for 27 million workers by 2025;
  • Elderly: $1.4 billion;
  • Small businesses: $25 billion for restaurants and bars; $1.25 billion for Small Business Association grants;
  • Paycheck Protection Program loans: $7.25 billion;
  • Transportation: $30 billion; $8 billion through 2024 for airports;
  • FEMA disaster relief: $50 billion for reimbursement to state, local, tribal and territorial governments..

Earmarks Return to Congress

Congresswoman Rosa DeLauro (D-Conn.) and Senator Patrick Leahy (D-Vt.), the chairs of the House and Senate Appropriations committees respectively, have reached a deal on the ground rules for earmarks in this year’s spending bills. House Democrats’ earmark proposal will include a cap on the total project funding and more guardrails than lawmakers had to adhere to before earmarks were banned more than a decade ago.

Highlights of the agreement include:

  • Earmarks will be capped at 1% of spending. This amount will likely be split evenly between the House and Senate, but that hasn’t been completely formalized yet.
  • For-profit entities will not be eligible for earmarks and the Government Accountability Office will audit the process, though exactly how is still being determined by House leadership.
  • Members will be capped at submitting 10 earmark requests per fiscal year, though members are not guaranteed to get those earmarks included in the annual government funding bills.
  • Each subcommittee will vet earmark requests. All earmarks must comply with the full committee spending cap.
  • Earmark requests will follow the 2010 standards. -- earmarks are filed online, members cannot have a financial stake in the entity receiving the earmark, etc.
  • GAO will review some of the fiscal year 2022 earmarks to ensure they are in compliance with standards.
  • House Republicans have a party rule against earmarks that they would have to alter should they decide to participate in the process.

Please reach out to any of the Larkin Hoffman Government Relations team members with any questions. 


Our Team

Peter Coyle



Peder Larson



Margaret Vesel



Robert Long



Bill Griffith


Matthew Bergeron



Gerald Seck



Logan O'Grady


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Larkin Hoffman provides counsel to a wide variety of ‎organizations, from ‎small businesses and nonprofits to  Fortune 500 companies, in ‎many areas of practice including ‎corporate and governance matters, litigation, real ‎estate, government relations, labor and employment, intellectual property, ‎information technology, ‎franchising and taxation. The firm also serves the needs of individuals in many ‎areas ‎including trusts and estates, personal injury and family law.


This newsletter is provided as a service to our clients and firm associates. While the information provided in this newsletter is believed to be accurate, it is general in nature and should not be construed as legal advice.