January 11, 2021

Legislative Session is Back!

At Noon on Tuesday, January 5, the 92nd Minnesota Legislature convened at the Capitol. On a typical first day, the Capitol complex is abuzz with constituents, lobbyists, and members of the public roaming the tunnels and halls, or camping out on a bench outside the Senate and House chambers. This year, however, the COVID-19 pandemic has the building nearly locked down to the public. Both House and Senate leaders are committed to limiting access by the public to the Capitol for at least the beginning weeks of session, creating a digital legislature where hearings and meetings will take place remotely.

Despite the different start, the legislature’s main 2021 task remains the same: to pass a budget that will fund state government for two years. The feat will be challenging as Minnesota has the nation’s only divided state government (with Republicans holding control of the state Senate and Democrats retaining control of the state House following the 2020 election). Yet, legislative leaders have expressed optimism pointing out that the last budget, passed in 2019, was also approved by a divided state legislature.

The budget battle sets up a challenging environment for Governor Tim Walz who will be providing his second budget proposal to the legislature on January 25. Based on the November 2020 budget forecast, the state is facing a looming $1.23 billion budget deficit into the 2022-2023 fiscal years. The Management and Budget Office will release a revised budget forecast at the end of February. If revenues do not improve in that forecast, the Governor and lawmakers will be faced with difficult decisions to balance the state's operating budget, as required by the state Constitution.

Besides the budget, the Governor and his administration will continue to focus on the state’s response to the COVID-19 pandemic. With cases and deaths declining after a peak in November, the Governor announced easing of restrictions on Wednesday, January 6, 2021 that will take effect on January 11. The newly announced restrictions will very much mirror the restrictions in place in October, 2020. Lawmakers continue to be critical of the Governor’s unilateral authority he has under his Peacetime Emergency order first authorized in March 2020.

The legislature has until May 17, 2021 to pass a balanced budget. In the event lawmakers are unable to reach an agreement, a special session would be needed. No action before June 30, 2021 would result in a state government shutdown.

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