Where big issues stand at the Minnesota Legislature

Minnesota legislators are wrapping up the final pieces of the next state budget, with a Wednesday deadline to complete the $52 billion spending plan for the next two years.

DFL Gov. Tim Walz and leaders in Minnesota's divided Legislature agreed to an overarching plan on the final day of the regular legislative session. But the Republican-controlled Senate and DFL-led House needed to return to the Capitol for a special session to finalize the details and sort out controversial policy provisions. If spending bills are not concluded by July 1, parts of state government will shut down.

Here's where the key issues stand.

Budget: State leaders reached a big-picture budget deal that totals about $52 billion for the next two years. The Legislature has been passing budget bills throughout the special session, with the measure to fund K-12 education the one piece of the state budget that still needed a final vote on June 30 to avoid potential impacts to school programs.

Emergency powers: Gov. Tim Walz announced late Tuesday night that he plans to end his COVID-19 emergency powers on July 1. The governor said he reached a deal with the U.S. Department of Agriculture to protect funding for the Supplemental Nutrition Assistance Program. Walz said last week he would end his powers on Aug. 1, and at that time cited concerns about the continuation of emergency food payments as one of the reasons to extend his powers.

The House and Senate followed Walz's announcement with votes overnight Wednesday to end the executive authority that the governor has employed since March 2020. Republicans had been pushing for more than a year to end the state of emergency and curtail Walz's powers.

Police reform: Police accountability remained a hotly debated issue at the Capitol as most Democrats and community activists insisted that much more needs to be done. The April police killing of Daunte Wright in Brooklyn Center further intensified talks over the future of policing in Minnesota and the DFL House offered up a slate of a dozen reform proposals during budget negotiations.

Senate Republicans vowed not to pass anything they perceived as "anti-police" and eventually agreed to a public safety spending bill that included some, but far from all, of the Democrats' priorities. The bill includes new regulations on "no-knock" warrants and how police manage confidential informants. Lawmakers agreed to a late tweak to the bill to add "sign-and-release" warranting, which would no longer require police to arrest someone who missed a court date for certain low-level charges. They also approved an amendment penalizing people for sharing personal information about a law enforcement officer, such as their home address.

Other DFL priorities such as additional body-camera requirements, a ban on white supremacist group affiliation, citizen police review boards and an end to traffic stops for minor equipment or registration violations did not make the cut. The governor intervened days before the end of session to impose executive actions related to community safety grants, the police licensing board and body camera regulations for state-level law enforcement agencies.

Taxes: Legislative negotiators agreed on a tax package that will provide nearly $1 billion in tax relief over the next four years, focusing on businesses that received federal payroll loans and workers who collected unemployment checks during the COVID-19 pandemic.

Notably, the package includes no new tax increases, a pledge made by legislative Republicans and a far cry from the $1 billion in hikes on wealthy residents and corporations Democrats proposed earlier this year.

The tax bill is one of the final measures the Legislature is anticipated to complete during the special session. Last-minute additions to the bill included funding for project development of the Rondo land bridge in St. Paul, and the creation of a commission to determine how to distribute $250 million in worker bonuses for people who have been on the pandemic's frontlines. That commission needs to make its recommendations to the Legislature about how to use the dollars by Sept. 6.

Education funding: Lawmakers opted to pump $1.2 billion more into the state's classrooms over the next four years. It's the single largest increase in school funding in 15 years and could stave off some teacher layoffs triggered by the pandemic.

The education bill is the largest piece of the state budget, and the Senate had yet to vote on it Wednesday afternoon.

The deal would increase the per-pupil funding formula that supports school districts by 2.5% next year and 2% the following year, put more money toward hiring and recruiting teachers of color and Indigenous teachers and increase suicide-prevention training and grants.

Eviction moratorium: Legislators reached a deal on a 105-day plan to phase out the eviction moratorium that Walz put in place at the start of the COVID-19 pandemic. And Minnesotans cannot be evicted for failing to pay rent until June 1, 2022, if they have an pending request for assistance through renthelp.org or 211. Landlords will also need to provide renters with notice that they will be evicted 15 days beforehand, a provision Democrats had pushed for. However, another DFL priority – expunging certain evictions from people's records — was not included in the deal.

Election law: Republicans' push for voter ID and a provisional ballot system failed at the Minnesota Capitol, and Democrats' hopes to expand voter access and felon voting rights fell by the wayside, too.

A deal on a bill that helps fund elections — among many other aspects of state government — left out controversial voting provisions that have been sources of contention in Minnesota and across the country.

A draft of the agreement negotiators struck on the state government bill does include other new items, including a security requirement for absentee ballot drop boxes and a veterans court program to direct people struggling with post-traumatic stress or addiction to treatment rather than prison.

PPP: Businesses that received federal payroll loans during the pandemic will get tax breaks. Leaders agreed to fully conform with the federal government, which moved last year to exempt all forgivable Paycheck Protection Loan income from taxes. They also agreed that Minnesotans who received unemployment benefits during the pandemic should get a tax break on up to $10,200 of that income. Those changes are part of the tax bill that still needed a final vote Wednesday.

Environment: A compromise environment finance bill banned "forever chemicals" in food packaging. A last-minute revision clarified that the ban on per- and polyfluoroalkyl substances (PFAS) affects the chemicals "intentionally added" in the packaging, not PFAS that may have unintentionally landed on packaging from nonstick spray used on manufacturing equipment, for example.

The environment bill frees up more than $130 million in spending by the Environment and Natural Resources Trust Fund for projects such as combating toxic algae blooms that kill pet dogs and fighting off invasive carp.

The deal ensured that state parks remain open, helps the Minnesota Zoo recover losses from the pandemic and prevents the Minnesota Department of Natural Resources (DNR) and Minnesota Pollution Control Agency (MPCA) from shutting down due to lack of funding.

Bonding: The Legislature typically passes a large public works borrowing bill in even-numbered years, and last October legislators approved a historic $1.9 billion bill. This session legislators approved a minor bill that makes adjustments to the bonding package they approved last session.

However, they appeared unlikely to move forward with a significant new infrastructure borrowing deal, despite efforts from Democrats to get a bill through.

Walz had previously proposed a $518 million state infrastructure package this year, which would have included funding for building projects at colleges and universities, Twin Cities communities damaged by unrest, housing and Capitol security. Senate Capital Investment Committee Chairman Tom Bakk, I-Cook, has suggested a $240 million bill along with the $179 million infrastructure investment from the federal government. House Democrats have pushed for a roughly $1 billion package.

Guns: New major firearms legislation did not advance this year. DFL priorities such as expanding background checks or passing a new "red flag" to remove guns from people deemed dangerous received scant attention for most of the 2021 session, until a resurgence in mass shootings around the country revived momentum in the spring. Still, Republican Senate leaders refused to consider the proposals — which also failed to pass the Legislature each of the previous two years Walz has been in office and Democrats controlled the House.

A GOP-favored "stand your ground" bill to strengthen legal protections for citizens who use deadly force to defend themselves or their property also did not advance this year, with Senate leadership more focused on the budget instead of passing new policy. Meanwhile, a DFL proposal to ban firearms on the Capitol complex amid heightened security concerns failed to gain momentum.

Marijuana: The House passed a proposal to legalize marijuana for adult use, the first time in state history such a proposal has ever made it that far. The bill would legalize recreational marijuana for adults, set up a marketplace for selling it and establish two tiers of expungement for people with prior cannabis convictions. People with misdemeanor, cannabis-only convictions would automatically have their records expunged, and any higher-level convictions would go before an expungement review board. But despite six Republicans supporting the bill in the House, the GOP-led Senate has signaled no interest in legalizing marijuana for adult use.

However, the Legislature passed a new law that allows adults 21 and older in the medical marijuana program to purchase the raw flower form of cannabis and smoke it. The state estimates it will increase participation by three or four times, driving down costs.