May 10, 2021

Minnesota receives $5 billion from ARP

Today, the Biden administration announced its guidance to states on the spending of the $1.9 trillion aid package, known as the American Rescue Plan (“ARP”). Minnesota will receive $4.97 billion, of which, $2.83 billion goes to state government and $2.13 billion goes to local governments around the state, including more than $166 million for St. Paul and around $271 million for Minneapolis. Republican plans attempt to limit Governor Walz’s control of the federal dollars by including some of the dollars in their budget plans, while democrats argue that it is too late to include them in the current budget negotiations. Disagreements over how to use these federal dollars, and who is involved in that decision-making, will play a large role in the final negotiations.

Vast Differences Remain with One Week Left of the 2021 Session

The Minnesota legislature is constitutionally required to adjourn the 2021 legislative session no later than midnight on Monday, May 17, 2021. While passing a balanced state budget to fund state government for the next two years remains the primary objective of the session, the DFL-controlled House and the Republican-controlled Senate remain over $1 billion apart in their respective budget proposals.

With only a week remaining, the simple logistics of drafting and re-passing thousands of pages of budget and policy legislation is becoming increasingly difficult to accomplish by the deadline. That being said, Gov. Tim Walz is expected to renew his pandemic peacetime emergency authority in June, thereby triggering at least one special session prior to a potential government shutdown on July 1, 2021. That expected special session has taken some of the pressure off of legislative leaders to reach a compromise by the May 17th deadline to adjourn.

Some of the key differences between the parties include:

Taxes

• Republicans have vocally opposed any tax increases this year, utilizing the state’s healthy budget surplus and additional federal COVID relief money to increase spending.
  
  
• Democrats are proposing a number of new taxes and tax increases, including a new, fifth-tier income tax for households making over $1 million (individuals making over $500,000).

Health and Human Services

• Republicans have proposed no new spending in health and human services, continuing spending at its current level, including maintaining the state’s reinsurance program that stabilizes health insurance premium costs for Minnesotans.
  
  
• Democrats are proposing $375 million in new spending targeted at helping low-income Minnesotans.

Public Safety

• Republicans are proposing $97 million in new spending for public safety, including increased funding for additional law enforcement officers.
  
  
• Democrats are proposing $134 million in new spending, including additional police training and reforms aimed at reducing police violence. 

Transportation

• Republicans are proposing a robust, $220 million increased transportation funding to fix local roads and bridges.
  
  
• Democrats are proposing a $49 million increase in transportation spending, funded by a new gas tax that automatically adjusts each year with inflation.
  

Other areas of major difference include funding for public K-12 education and state colleges and universities.

With all proposals passed through the House and Senate, conference committees have been meeting and will continue to meet over the next seven days to try and work out these vast differences. But, until joint budget targets are agreed to by the House, Senate, and Governor, little will happen.

Governor Dials Back COVID Restrictions

On Thursday, May 6, 2021, Gov. Walz announced his plan and timeline to eliminate nearly all of the state’s pandemic restrictions by July 1, 2021. The “Stay Safe Plan” should return a sense of normalcy to Minnesota through a three-step process:

Effective May 7, 2021

• No restrictions on outdoor dining, events, and other gatherings;
  
• Ends mask mandate outdoors except at large venues with over 500 people;
  
• Eliminates mandatory, early closing time for bars, restaurants, and food and beverage service at other places of public accommodation - unless a local government adopts its own early closing policy.

Effective May 28, 2021

• All capacity and distancing limits end, including for indoor events and gatherings.
  
• The requirements that will remain include: Face coverings indoors and for outdoor events that exceed 500 people; businesses and other venues must have plans that keep their employees and customers safe – as they have from the beginning of the pandemic – guided only by a minimal universal state guidance document that includes no new requirements.

Effective No Later than July 1, 2021

• When 70 percent of Minnesotans age 16 years and older have received at least one dose of the COVID-19 vaccine, but no later than July 1, all remaining face covering requirements and the requirement for preparedness plans will end.
  
  

Important Dates