At Minnesota Capitol, pressure builds on budget talks as deadline looms

Top lawmakers resumed their high-stakes talks Friday to craft a state budget plan as pressure mounts to strike a deal ahead of Monday's deadline for the Legislature to adjourn for the year.

With every passing hour, lawmakers are more likely to need Gov. Tim Walz to call a special session of the Legislature once they adjourn at midnight Monday, as the state Constitution requires.

Even after Walz, House DFL lawmakers and the Republican-majority Senate strike a deal, they still will have to finalize many details of a two-year state budget, which is expected to top $45 billion.

Walz and lawmakers have been locked in negotiations all week.

Despite hours of closed-door meetings, the two sides have been unable to bridge key differences over spending and taxes.

To pay for better schools, roads and health care, Walz and the House DFL want to raise the gas tax and keep in place a tax on health care that would otherwise expire. Republicans say Minnesotans' taxes are already too high.

"We've been spending day after day after day working at how do we bring two sides together that are pretty far apart. And certainly we've made progress. … I believe we're not too far off, but each day it just seems like we're almost there," Senate Majority Leader Paul Gazelka, R-Nisswa, said after a brief meeting in the governor's office Friday afternoon.

Gazelka said he still thinks there is an opportunity to finish the Legislature's work without a special session.

But optimism was quickly fading around the Capitol as people talked about the logistical challenges of processing highly technical bills that often run hundreds of pages, like the health and human services bill, in such a truncated time frame.

Senate Minority Leader Tom Bakk, DFL-Cook, said when he recently spoke with Walz, the governor was concerned that he won't be able to deliver on campaign promises.

"We talked some about how if he can't deliver, how do we message that to the public? He's got some feeling that a lot of people are going to feel let down, and we talked extensively about [that]," said Bakk, who said Walz should blame Republican obstruction.

The marathon talks that had kept lawmakers at the Capitol into the early morning for two consecutive nights paused Thursday evening, as Senate Republicans unveiled a push to continue funding for basic state services if lawmakers are unable to pass a budget by the end of next month.

Without such action, a state government shutdown could begin July 1.

"We are at somewhat of an impasse," Julie Rosen, a member of the Senate Republican negotiating team, said during a late Thursday committee hearing. "This is something of a protection policy."

But DFL leaders who control the Minnesota House seemed unlikely to approve a similar stopgap measure while they pursue a final budget deal.

The Senate was expected to vote on the temporary spending bill, but decided not to take it up Friday — potentially a sign of progress in the negotiations.

Bakk said the measure doesn't advance the budget negotiations, adding, "That's the reason I believe they're backing off."

Legislative leaders have already missed several self-imposed deadlines for reaching an agreement on top-line spending figures, including a Wednesday goal of finalizing numbers for the state office that must draft and print thousands of pages of budget bills ahead of a vote.

Predicting whether a breakthrough is imminent has been difficult, with lawmakers at the negotiating table remaining tight-lipped about the status of the talks.

As he walked into Walz's office late Friday morning, Gazelka offered just a two-word update on the path forward: "Keep working."

He said little more upon exiting the room a mere 30 minutes later.

"We're still working," he told reporters.

Staff writers Judy Keen, Jessie Van Berkel and J. Patrick Coolican contributed to this report. Torey Van Oot • 651-925-5049