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March 29, 2021

House DFL Releases Budget Targets

With lawmakers on recess this week for Easter/Passover, the legislature wrapped up last week with 50 days left in the 2021 legislative session. Upon their return, lawmakers and Governor Walz will spend the remaining weeks working to negotiate and pass a balanced budget to fund state government for the next two years through the nation’s only politically divided legislature.

With the Governor releasing his revised budget proposal, and Senate Republicans announcing their budget targets, House Democrats unveiled their targets on Tuesday, March 23, 2021. At $52.5 billion in total spending, the House DFL is proposing the largest budget yet this session (with the Governor coming in at $52.4 billion and Senate Republicans at $51.9 billion).

Speaker of the House Melissa Hortman (DFL-Brooklyn Park) said that her caucus’s budget focuses on putting Minnesota families and workers first. The targets increase all state agency budgets, including $721 million in new funding for education, a $323 million increase in health and human services spending, and an over $1.6 billion bonding bill.

Republican House leadership criticized the bill for its lack of support for Minnesota’s small businesses hit hard by the COVID-19 pandemic, and for its reliance on raising taxes to be fully balanced.

With House and Senate budget targets now released, finance committees will begin meeting round the clock when the legislature reconvenes on Tuesday, April 6, 2021. All major spending bills must be passed out of committees by April 9, 2021.

Find the full list of House DFL budget targets here.

Governor Delivers State of the State Address

Governor Tim Walz gave his “State of the State” address Sunday, March 28, 2021, from a Mankato classroom where he used to teach. The speech was largely upbeat and underscored resiliency and a theme that brighter days ahead have already begun. In a 20-minute speech, the Governor stated his emergency powers have afforded him a reign over an unprecedented level of the lives of Minnesotans, has governed well, as he underscored the state’s standing as better-than-average on a number of coronavirus measures, including deaths, testing and the pace of vaccinations.

Senate Republican Majority Leader Paul Gazelka
(R-East Gull Lake) gave his parties response in a two-and-a-half minute speech where he stated the status of the state is hopeful, in large part due to COVID vaccines finally being made available to anyone who wants one.

Gazelka also asked the Governor to lay out clear guidance on when the pandemic and emergency powers will end and noted that Minnesota will receive almost $5 billion for state and local budgets from the American Rescue Plan (ARP). The funds can be used for one-time COVID-related expenses including summer school and vaccination distribution. Along with the ARP funds, Minnesota has a $1.6 billion budget surplus. Gazelka and Senate Republicans are committed to passing a balanced budget, recovering from COVID, and supporting Minnesota families, all without raising taxes.

Summer School Package Passes House

On a near party-line, 69-63 vote, the Minnesota House of Representative voted on Wednesday, March 24, 2021, to approve a $104.5 million education package to provide expanded summer school programs throughout the state. The bill, H.F. 1064 (Davnie, Minneapolis) represents Governor Walz’s Summer Learning Plan, targeted at making up for lost school time for students during the COVID-19 pandemic. The package would increase programming through field trips and hands-on learning, as well as tutoring, and mental health services.

Critics of the bill were focused on how the dollars were distributed, arguing that school districts should be in charge of determining how best to allocate funds to address educational needs for students this summer.

The bill heads to the Senate where it faces an uphill battle, with Senate Republicans proposing to use federal aid money to fund summer school programs, to save state money for further economic relief for small businesses.

Important Dates

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

Senators wrapped up work Thursday and departed for two weeks of spring recess. Before leaving town, the Senate passed, 90-2, an amended version of a bill (HR 1868) that would continue a suspension of Medicare cuts to medical providers during the pandemic. Senate leaders struck a deal to cut from the bill a waiver to avert statutory “pay-as-you-go” cuts stemming from the latest COVID-19 aid law. The House is expected to vote on the amended version when it returns in April.

Spring Agenda

The Senate comes back the week of April 12 to an agenda focused on civil and voting rights, health and gun safety and economic recovery. According to Majority Leader Charles Schumer, the chamber will take up a bill designed to combat the increasing number of hate crimes against Asian Americans. Schumer also said the Senate will take up Democrats’ massive overhaul of voting rights, campaign finance and ethics laws, legislation to expand background checks on gun purchases and a bill to ban discrimination based on sexual orientation and gender identity.

President's Budget

The White House confirmed it will release a “preview” of the fiscal 2022 budget next week, which it said will enable lawmakers to begin to draft appropriations bills. But officials stressed the preview won’t be a “formal” budget volume, adding the administration does not intend to describe it by the popular moniker “skinny” budget.

Filibuster Overhaul

On Thursday, March 25, 2021, President Biden took a stronger position on overhauling Senate filibuster rules. The President suggested he is open to a proposal to reduce the 60-vote threshold on voting rights legislation, even if the Senate doesn't fully get rid of the legislative filibuster. The President also informed Republicans that eliminating the filibuster was still on the table if Republicans block Democrats’ agenda or "there is complete lockdown and chaos as a consequence of the filibuster."

Transportation Funding

Transportation Secretary Pete Buttigieg acknowledged in testimony Thursday that the administration will need “at least a partial funding source” for its infrastructure legislation. He said places to look for funding include “user fees, general fund or other tax sources as Congress has done to fill gaps in Highway Trust Fund in recent years or borrowing.” President Biden is expected to announce details on the infrastructure plan next week.

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


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