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April 13, 2021

Omnibus Budget Bills Released;
Passed Out of Committee

The Minnesota Legislature returned from its Easter/Passover break last Tuesday and jumped headfirst into the state’s biennial budget. Nearly 20 different omnibus budget bills were released at the start of the week as committees then proceed to take hours of public testimony, considered dozens of amendments, and eventually voted out their initial budget proposals in time to meet the third committee deadline on Friday, April 9, 2021.

With the only divided legislature in the nation, the
DFL-controlled House and the GOP-controlled Senate released very different visions for the next biennium. House Democrats released a proposed $52.5 billion biennial budget (nearly $250 million more than
Gov. Tim Walz’ proposed $52.27 billion budget), while Senate Republicans proposed a $51.8 billion two-year budget. The current state budget is estimated to spend approximately $48.36 billion. Senate Republicans have stated repeatedly that, with a projected $1.6 billion budget surplus, the idea of tax increases is off the table. Meanwhile, House Democrats have rejected Republican proposals to cut state agency operating budgets as an absolute non-starter. While compromise is always difficult, the projected budget surplus, along with the significant federal resources directed to Minnesota as part of the American Rescue Plan (ARP), should make it slightly easier for the governor and legislative leaders to find some common ground. The Governor is expected to release a second revised budget in the coming weeks that outlines his proposed use of federal ARP funds.

Racial Justice & Law Enforcement Reform Take Center Stage Again

For the second time in ten months, Minnesota is at the heart of the nation’s conversation about racial justice and the role of law enforcement. Just two weeks into the highly publicized murder trial of former Minneapolis police officer Derrick Chauvin, protesters again took the street following the fatal shooting of another young black man, Daunte Wright, this time in the Minneapolis suburb of Brooklyn Center. The Governor declared a state of emergency and curfews were implemented throughout the Twin Cities in an attempt to avoid the violence of last June.

As news of Mr. Wright’s death emerged, some DFL lawmakers immediately called for budget negotiations to be suspended until law enforcement reform measures can be addressed. Speaker of the House Melissa Hortman (DFL-Brooklyn Park), responded stating, “We will continue our work toward reform and accountability . . . our caucus will work together to determine our next steps.” The Minnesota legislature spent nearly two months last summer negotiating a series of law enforcement reform measures in response to the death of George Floyd and the nationwide protests that followed. These negotiations resulted in a compromise package passed during a special session and signed into law in July. In responding to news of Mr. Wright’s deal, the Governor said he felt there were additional measures policy makers could implement to prevent these shootings and called on the legislature to hold hearings on the topic in the coming weeks. 

Important Dates

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

Congress returned yesterday, Monday, April 12, 2021, from its two-week break to tackle massive fights on guns, taxes, infrastructure and immigration.

On Thursday, March 8, 2021, Speaker Nancy Pelosi backed the White House’s pitch to split its infrastructure plans into two packages — one emphasizing tangible assets like roads, bridges and broadband and another focused on “human” infrastructure — despite progressives’ push for a bundled approach.

President Joe Biden last week unveiled his proposal for spending more than $2 trillion on physical infrastructure and workforce development over eight years, as well as a slate of corporate and international tax changes aimed at paying it off over 15 years.

In the coming weeks, Biden is planning to release a second plan for education, health, and child and elder care funding that is expected to cost more than $1 trillion.

Releasing the proposals in two parts suggests the White House believes breaking them up might make them easier to swallow politically. But the administration has ultimately deferred to congressional leaders to make decisions about legislative strategy.

Using the budget reconciliation process would allow Democrats to avoid the Senate filibuster and pass the bill with a simple-majority vote. But that would require total party unity and potentially force Democrats to drop some provisions that may not be allowed under the reconciliation rules that require every provision to have more than an incidental budget impact.

The reconciliation process also requires Democrats to adhere to a strict topline spending number, which would be provided in a budget resolution containing reconciliation instructions for specific committees.

Time-intensive Process

The budget reconciliation process is particularly time-intensive because of the need for both chambers to adopt a budget resolution providing for reconciliation instructions before bringing the actual legislation to the floor. Both steps require a lengthy “vote-a-rama” in which senators can offer amendments until they grow tired or run out of proposals.

The timing in the House is largely the same for either strategy, other than adopting the budget resolution for reconciliation. Key House committees are hoping to hold infrastructure markups before Memorial Day, and Speaker Nancy Pelosi has signaled that floor action could come before Independence Day.

Transportation and Infrastructure Chairman Peter A. DeFazio (D-Oregon), “thinks we can do our part in the House probably in the month of May. At least his committee would be ready at that time.”

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


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