After weeks of tense, closed-door negotiations, the Legislature ended up exactly where many at the State Capitol expected it would when lawmakers convened in January: modest growth in some programs, no new taxes, and a second life for an important health care levy.
The Legislature adjourned early Saturday after a 21-hour special session in which members labored through a series of bills to fund Minnesota schools, parks, prisons, public health care and other services for the next two years — at a cost of $48.3 billion.
First-term DFL Gov. Tim Walz — eager to pass his first budget and send lawmakers home — applauded the Legislature for its work: "This budget will improve the lives of Minnesotans in every corner of the state and I look forward to signing it into law in the coming days," he said in a statement Saturday. "Minnesota is showing the rest of the nation that Republicans and Democrats can still find compromise and work together to get things done."
First-term House Speaker Melissa Hortman, DFL-Brooklyn Park, who won her gavel in the DFL's sweeping 2018 election victory, and Senate Majority Leader Paul Gazelka, R-Nisswa, also praised the final result.
Each secured some gains with important constituencies in time for the 2020 election, when all 201 legislators will be on ballots. With full control of state government on the line, the stakes will be even higher, given the need for redistricting after the 2020 census, when lawmakers will draw new legislative and congressional district maps, with Minnesota potentially losing one of its congressional seats.
"We held the line on raising new taxes and kept spending focused on priorities. For the first time in nearly 20 years, Minnesotans are getting a tax cut," Gazelka said, referring to a 0.25% cut in the second-lowest income tax bracket. Gazelka and his united GOP caucus also fought off a Walz and House DFL proposal to increase the gas tax by 20 cents per gallon and the metro sales tax for transportation.
The budget deal, Hortman said, "provides strong funding for education and secures health care for more than one million Minnesotans." Education spending, which is roughly 40% of the total state budget, will be about $1.25 billion more during the next two years than the previous two, or 6.7% higher. A complicated formula for funding school districts will increase 2% in each of the next two years, allowing the state to stave off program cuts and the loss of teaching positions.
The 2% tax on health care services will decline to 1.8%, but its continuation was a major victory for Walz and Hortman. Its sunset would have blown a hole in the state's burgeoning health and human services budget, which faces increasing pressure because of rising health care costs and the aging of Minnesota's population. More than 100 interest groups, including the influential hospital lobby that actually pays the tax, backed the levy's continuation because it helps pay for health care for the poor and people with disabilities. The rate reduction was enough to satisfy Republicans who originally wanted the tax to expire as scheduled.
