Special session to pick up where the Minnesota Legislature left off

Gov. Tim Walz and legislative leaders pledged Monday to forge ahead with negotiations over a billion-dollar public construction package in anticipation of a mid-June special session, hoping to break the partisan impasse that blocked a deal in the final days of regular business.

Lawmakers expect to return to the Capitol by June 12, the deadline for Walz to extend a peacetime state of emergency that has allowed him to shutter businesses and impose other restrictions to slow the spread of the coronavirus. Under state law, the governor must call legislators back if he renews the emergency.

The special session is expected to pick up where legislators left off when they adjourned Monday.

Still unresolved are disagreements over the size of an infrastructure bonding bill, tax relief for businesses and spending to help those struggling amid the pandemic. Raises for thousands of state government workers also remain in limbo, hanging on a broader debate about a projected $2.4 billion budget deficit.

But amid the sparring of the Legislature's final hours, the Senate GOP leader said he had narrowed his differences with the House speaker over the size of the bonding bill, arriving at a compromise of between $1.1 and $1.3 billion. Despite the agreement, House Republicans stood firm in opposition without major concessions from Walz about ending his emergency powers.

"It's a shame," Walz said Monday, reflecting on the hold up of the bonding bill and other key administration priorities. "But I will not give up. We go around roadblocks, we figure out ways to get there. We've been on the phones, bipartisanly, continuing to try to work this out."

It wasn't just big-ticket spending items that fell by the wayside. Also on hold are proposals to alleviate a testing backlog for teen drivers, improve testing and tracking of rape-evidence kits, and provide financial help to the Mall of America, which has struggled through the pandemic. An education policy bill fell short in the final minutes of the session, after the House couldn't make it through a remote roll-call vote in time for a Sunday night deadline for the Senate to take up the bill.

The COVID-19 crisis overshadowed much of the four-month session, forcing lawmakers on both sides to set aside partisan priorities that had been expected to dominate in an election year. Debates over new gun laws and tax cuts for seniors hardly materialized, shunted aside to focus on the pandemic.

Lawmakers struck a bipartisan tone in the early days of the crisis, coming together to pass more than $550 million to respond to the pandemic. They were quickly reduced to virtual meetings and remote voting.

The bipartisanship gave way to party-line bickering in the end, particularly over the DFL governor's emergency powers.

"There was a moment where that bipartisan work kind of fizzled," said House Speaker Melissa Hortman, DFL-Brooklyn Park. Work was further complicated, she added, because the pandemic "reached in and grabbed the heart of the legislative session out."

With a special session all but certain, Senate Majority Leader Paul Gazelka, R-East Gull Lake, said lawmakers are close to agreement on several key sticking points, including a GOP proposal to delay tax deadlines, waive penalties and help businesses deduct equipment purchases. But they remain deadlocked on others, including a tax relief request from the Mall of America that the city of Bloomington opposes.

Although Gazelka said he and Hortman also reached a deal on a bonding bill, the issue is likely to reignite the battle over Walz's emergency powers, which could be renewed on June 12.

"When the governor extended his emergency powers, it was clear the Legislature was certain to return for a June special session," House Minority Leader Kurt Daudt, R-Crown, said in a statement. "The coming weeks will give us further clarity on our state's financial situation, time to evaluate our response to the pandemic, and time to make better decisions."

Advocacy groups expressed frustration over the lackluster finish, as did cities and counties waiting on bonding dollars and their allotments of federal pandemic money. Sue Abderholden, director of the Minnesota chapter of the National Alliance on Mental Illness, said legislators must pass legislation helping vulnerable people cope with the pandemic.

"We want to make sure that we are addressing the symptoms or behaviors that we may see in younger children due to COVID-19 and that all teachers, regardless of their license, have training on mental health in students and suicide prevention," she said.

The pandemic has also increased the number of Minnesotans without stable housing, said Allison Streich, co-chair of the group Homes for All. As spending deals collapsed in the final days of the session, so too did a large housing assistance bill.

"We are hopeful that lawmakers will come back to the table in a special session and ensure that all Minnesotans have a safe, stable place to call home," Streich said in a statement.

The final round of deal-making also cast confusion around scheduled pay raises for tens of thousands of state workers. The DFL-controlled House passed legislation ratifying the raises, which were negotiated last year. But the GOP-led Senate passed a bill freezing their current pay until the state's budget picture improves.

While both chambers must approve public employee contracts, Minnesota Management and Budget Commissioner Myron Frans said state law doesn't give legislators the authority to change them once they're negotiated.

His agency is now determining whether the Senate vote to modify and approve them actually had the legal effect of ratifying them as negotiated.

A ruling could come as early as Tuesday.

Democrats argue that the Senate set the stage for the raises to take effect as scheduled in July.

"Either the contracts are ratified or they're not; there is no gray area in between," Walz said.

Gazelka said nonpartisan research staff told him the contracts, along with pay raises adopted last July, would be canceled effective Monday since the House and Senate passed different bills.

He said that while he wants to work with Democrats on a resolution in June, any interpretation to the contrary would be "an overreach of power."

It's unclear how much urgency lawmakers will feel when they return. While Walz has the power to call legislators back into session, it's up to legislative leaders to decide when to adjourn again. That could open the way to new partisan battles as the 2020 elections draw near.

Torey Van Oot • 651-925-5049

Jessie Van Berkel • 651-925-5044