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First budget bills head to Governor
Nine Days Remain to Wrap-Up Special Session
After today, the Minnesota Legislature will have just nine days to pass all 15 omnibus budget bills through both chambers and to the governor’s desk in order to avoid a government shutdown on July 1, 2021. Progress has been slow thus far, particularly in the House of Representatives, where the Republican minority protested their exclusion from the budget negotiations by launching a full-throated filibuster that lasted over three days. However, late on Saturday, the House took up and passed the first three budget bills: the omnibus Legacy Amendment finance, omnibus Agriculture finance, and the omnibus Higher Education finance bills.
What’s Next?
House: This afternoon House took up and is currently debating amendments to HF 6 (Stephenson), the omnibus commerce, climate, and energy policy and finance bill. The omnibus transportation finance bill (HF 10: Hornstein) is expected on the floor next, having been heard in Ways & Means over the weekend. Meanwhile, Ways & Means is scheduled to hear the omnibus environment and natural resources finance bill (HF 5: Hansen) this evening.
Senate: Earlier today, the Senate took up and passed the omnibus legacy bill (HF 13: Rudd) and the omnibus higher education bills (HF 7: Tomassoni) on unanimous 66-0 votes. They now head to the governor for his signature. The Senate also re-referred the omnibus jobs and economic growth finance (SF 9: Pratt) back to the Senate Finance Committee in order to adjust the spending in the bill.
The Senate is expected to pass the omnibus agriculture bill later today or tomorrow before turning its attention to the omnibus transportation finance and omnibus jobs and economic development bills, both of which are expected to be passed out of the Senate Finance Committee today.
The most controversial budget bills, particularly the omnibus public safety and judiciary finance and omnibus health and human services finance, have not yet been finalized or released to the public. That being said, Senate Majority Leader Senator Paul Gazelka (R-Nisswa) stated this morning that progress was being made and that the omnibus E-12 Education finance bill was just awaiting a “small tweak” while the omnibus state government finance bill was also close to being completed.
Legacy
This first omnibus finance bill passed by the legislature in 2021 doesn’t actually address the state’s operating budget. Instead, the omnibus legacy finance bill appropriates the proceeds from 0.375% of the state’s sales tax proceeds; directing the money towards projects related to clean water, the outdoors and the arts. The “Legacy Amendment” was passed by a statewide referendum in 2008 and is a special pool of money all its own.
Higher Education
The omnibus higher education finance and policy bill became the second finance bill sent to the governor. As part of a $3.51 billion appropriation, the omnibus higher education finance bill will cap tuition increases for Minnesota State students at 3.5% over the next two academic years, while increasing funding for both the Minnesota State and University of Minnesota systems. The bill also funds the State’s various financial aid programs administered by the Minnesota Office of Higher Education. The omnibus higher education finance bill includes $1.58 billion for the Minnesota State system (45% of the higher education budget), $1.39 billion to the University of Minnesota (40%), and $546 million to the Office of Higher Education (about 16%). The Mayo Foundation will receive $2.7 million for its education programs.
Key:
The remaining bills yet to be heard/passed in either body are noted in orange.
Passed in the house, blue.
Passed in the senate, red.
Once a bill is passed in both bodies and is en route to the governor in bold black.
2021 First Special Session Budget Bills and Information:
Federal Update
The House Appropriations Committee will start marking up its spending bills in subcommittees, kicking off a long fiscal 2022 process. The Financial Services and Legislative Branch panels will mark up their measures on Thursday, followed by the Agriculture and Military Construction-VA subcommittees on Friday. The markups will offer a peek at how Chair Rosa DeLauro (D-Connecticut), has split up $1.506 trillion in discretionary spending — as approved by the House last week — among the dozen annual appropriations bills.
Those decisions will be notable, not just for how much each bill gets, but also how closely House Democrats stick to President Joe Biden’s proposed split between defense and non-defense funding. Biden’s budget request called for $770 billion, a 16.5 percent increase, for domestic and foreign aid programs, and $753 billion for defense, a 1.6 percent boost.
Appropriators will also be incorporating earmark requests this year, which could invite GOP support for parts of the spending bills. In total, just under half of the House Republican Conference requested project funding in at least one of the fiscal 2022 spending bills.
Biden sent Congress two separate proposals earlier this year, totaling more than $4 trillion. The first would finance highways, bridges, clean energy subsidies, rural broadband access, home care for the elderly, and more. A separate proposal would fund initiatives like universal preschool, two years of free community college, assistance with child care expenses, and a new paid family and medical leave benefit. Those items would be financed by an array of tax increases on corporations and wealthy households as well as enhanced IRS tax enforcement initiatives aimed at wealthier households, private firms, and cryptocurrency assets.
Final passage of a sweeping budget reconciliation package to enact President Joe Biden's fiscal policy agenda on infrastructure, child care, education and more likely won't occur until sometime this fall, according to the House Democrats' point man on budget issues. House Budget Chairman John Yarmuth told reporters after the Democratic caucus met with top White House officials on June 15 that he planned to mark up a fiscal 2022 budget resolution — a prerequisite for any filibuster-proof reconciliation bill — in mid-July. Democrats will then try to adopt the budget with reconciliation instructions on the floor before the August recess, he said.
The White House meanwhile is giving negotiators another week to 10 days to reach an agreement on a bipartisan infrastructure package before fully moving to the reconciliation process, according to Yarmuth
(D-Kentucky). The White House didn't set any "deadline or cutoff" for the bipartisan talks but noted they would "take stock" of the situation after that seven-to-10 day period. Yarmuth said his committee is preparing to write reconciliation instructions for about $4 trillion in spending, but could remove any bipartisan agreement from those instructions.
Late in the day on Friday, June 18, 2021, the House Rules Committee posted a revised text of Democrats’ surface transportation bill (HR 3684) with a new title that would extend Highway Trust Fund spending authority through fiscal 2026 and inject an extra $148 billion into the fund from general revenue to keep it afloat during that time.
Please reach out to any of the Larkin Hoffman Government Relations team members with any questions.
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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.
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