On its final weekend to pass bills, the Minnesota Legislature appeared on course for a special session to finish work on the next two-year state budget, as questions remain on whether a bipartisan deal announced last week will hold.
On Friday and Saturday, lawmakers took up several less controversial bills, including a housing bill, the veterans budget, K-12 education policy and spending, and a pension bill.
But after backlash to a proposal to end state-funded health insurance for people without legal immigration status, and resistance to a plan to close the state prison in Stillwater, the health and public safety bills have yet to be passed.
The regular session ends Monday, and lawmakers have to pass a two-year budget by the end of June 30 or the state government shuts down. As of Sunday afternoon, the Legislature was all but guaranteed to enter overtime. Leaders admitted this was likely last week.
In the last decade, there has been a special session every time control of government is split between the parties. Legislative leaders agree it’s likely they’ll have to return to the Capitol in coming weeks to finish the budget. But how long that will take is still hard to say.
Budget deal
Democratic-Farmer Labor Gov. Tim Walz as well as leaders from the Senate DFL majority and the 67-67 tied House, announced the budget deal Thursday.
If it makes it through in its current form, the state would have a two-year budget of more than $66 billion. It aims to control spending growth in social services and education to address a projected $6 billion budget shortfall projected for later this decade. It’s down from the last budget, which topped $70 billion. There are small tweaks to state taxes.
Besides the continuing debate on immigrant health care, a few other budget and policy areas remain in flux. A group of Democratic-Farmer-Labor and Republican legislators is still trying to make changes to new employee benefits the DFL-controlled state government created in 2023.
Sen. Judy Seeberger, DFL-Afton, and Rep. Dave Baker, R-Willmar, on Saturday told reporters they continue to push for more exemptions for small businesses from the paid family and medical leave system set to start in 2026.
Education
Another benefit targeted by Republicans this year appears to remain intact. As part of a deal on education spending, unemployment insurance for hourly school employees like bus drivers and cafeteria staff will remain funded through 2028.
Education budget bills headed to a conference committee to reconcile differences between the House and Senate versions will preserve the benefit, which DFLers granted in 2023. Most of the $100 million in funding comes from a planned Duluth-Twin Cities passenger rail project that never got underway.
An impasse over that benefit initially hampered budget efforts, but as part of a broader budget deal announced Thursday, the issue appeared to have been resolved.
The education budget makes up around one-third of the current $71 billion two-year state budget. Under the deal, education spending will remain level for the next two years other than the required inflation-tied increases.
Other bills
The final version of the veterans affairs budget bill passed in the Senate and the House on Saturday and is headed to the desk of Gov. Tim Walz. Overall, the bill provides about $365 million in the next two years and increases spending by about $50 million in large part to help fund state veterans homes.
Money goes towards veteran suicide prevention and a pension credit for National Guard members deployed for state active duty, such as inn natural disasters. It also recognizes Southeast Asian special guerrilla units that fought for the U.S. during the Vietnam War.
On Sunday the House passed an agriculture budget, and a pensions bill that aims to boost funding for retirements for the State Patrol and other public employees.
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