Top Minnesota lawmakers reach tentative budget agreement without transportation package, tax cuts

After five days of closed-door negotiations, Minnesota's top lawmakers said Friday evening that they have come to an agreement on state budget targets, in a deal that keeps MinnesotaCare intact and, as of yet, does not include transportation and tax initiatives.

"We are as close as we can possibly be to having an agreement," DFL Senate Majority Leader Tom Bakk said as he addressed reporters alongside Republican House Speaker Kurt Daudt. The numbers are expected to be released Saturday morning.

Bakk said the entire five days were focused on the eight appropriation bills that fund state government, including an additional $400 million in education spending. It's higher than what the Senate brought to the table.

Gov. Mark Dayton countered that he would accept no less than $550 million in education spending, which would include a 1 1/2 percent increase on per-pupil spending each year of the biennium. Dayton also wants $173 million for half-day universal pre-kindergarten, according to Deputy Chief of Staff Linden Zakula.

Bakk said they will review the numbers Friday night before specifics are released. The Legislature is expected to suspend the rules to allow committees to work through the night, starting immediately.

Daudt said his key priority was to get the work done so the legislative session would wrap before its Monday at midnight deadline.

"It's going to take some breakneck work over the next three days to get that done, but we feel like we're there," Daudt said, adding that all portions of the budget were at one point or another vetted by the Legislature.

"We are going home before midnight on Monday." Bakk said.

Daudt said nursing home reimbursement reform will be included in the Health and Human Services budget, but it appears a GOP push to do away with MinnesotaCare was unsuccessful.

"MinnesotaCare will be sticking around," Daudt said. "Obviously this is a program that we have had concerns about—the future of the program. We've made some concessions."

A task force will look at the future of the program as part of the tentative agreement, Daudt said.

Proposed tax cuts by the GOP, as well as a transportation funding package have, so far, fallen by the wayside.

"We virtually spent no time talking about taxes or a comprehensive transportation package," Bakk said. "That's not to say we're not going to spend some time talking about it in the next couple of days, but right now the must-pass bills, we hope to have an agreement tonight so the conference committees can get going on them and the state budget will be funded for the next two years."

Daudt said that if transportation and tax cuts aren't addressed this year, "There will be a significant amount of money left in the bottom line that we can address them next session."

Both Daudt and Bakk declined to say how much unspent money would remain, only reiterating that it is significant.

"We really hate to give you a number until we review the spreadsheets."

Bakk said that although there are no longer sticking points on the bills, they're awaiting final signoff on the math.

Both said that compromise was involved in the tentative agreement, and that everyone walked away not completely happy.

"Everyone set aside some of our differences and certainly our priorities to come together," Daudt said.

Bakk said that with a $2 billion surplus, demand was high.

"The surplus created a situation where the wants were pretty high and the expectations were pretty high," he said. "We did our best to work within the resources that we had and I think the outcome's gonna be a pretty good budget."

If there's a bonding bill, it will be an "absolutely bare bones minimum," with spending for state capitol renovations and flood relief.

Although lawmakers initially commented on negotiations Monday, they quickly clammed up, saying little through the week. Bakk said it was at Dayton's insistence.

"I'd describe it as dueling press conferences where some of the rhetoric got a little hot," Bakk said. "The governor got kind of upset about that and suggested we put what is commonly referred to as a Cone of Silence around the discussions."

That's not uncommon, Bakk said, but this year was different because negotiations were at the governor's residence, rather than the Capitol because of renovations.

Starting on Tuesday, the day after session is scheduled to adjourn; the Minnesota Department of Administration will begin the dismantling of House and Senate chambers as part of Capitol renovations—limiting prospects for a special session. Barring a disaster, the very earliest would take place in December once the Senate Office Building is completed.

Stay tuned for updates.