Ewald at the Capitol

March 20, 2023

Budget Targets to Come, Governor’s Revised Budget PlanBudget Targets to Come, and more

Budget Targets to Come

Next Friday is the second legislative deadline, where committees must act favorably on bills that passed the first committee deadline in the other body. Major appropriation and finance bills are exempted from this deadline. With the release of the February budget forecast, which showed a budget surplus set at $17.5 billion, the governor and legislature now must decide where to allocate the funds toward a two-year state budget. Legislative leaders will decide budget targets soon. Budget targets break down how much finance committees can expect to appropriate for their omnibus budget bills.

Governor’s Revised Budget Plan

Gov. Walz and Lt. Gov. Flanagan presented their revised “One Minnesota Budget” this week. The revised plan doubles the public safety plan to $550 million for local governments to spend. $240 million would be dedicated to replacing lead service lines in community water systems for clean drinking water. An additional $10 million per year increase is being recommended to help cities and counties pay for vital infrastructure needs and local roads. Lastly, the revised budget plan will provide $2,500 in tax credits for the purchase of new electric vehicles.

Bonding Bill Heard on Senate Floor

After the bonding bill passed through the House with bipartisan support, the Senate was unable to pass the bill with the required three-fifths supermajority. Senate Democrats have been able to rely on their single-vote majority to pass most of their legislative priorities this session, but the bonding bill would require seven Republican senators to vote for the bill. No Senate Republicans voted in favor of the bonding bill, making it clear that they won’t support it without corresponding tax cuts.

Universal School Meals Bill Advances

This week, the Senate passed the bill to provide free meals to all students by a vote of 38-26, with 4 Republicans joining all 34 Democrats. The bill funds the cost of providing meals to all students. The estimated cost of the program to the state would be $400 million in a biennium, or around $200 million per year. The Senate made changes to the bill to address potential lost revenue because of the reduction of students filling out meal-subsidy forms, which help determine a district’s compensatory revenue allowance. Compensatory revenue provides extra money to schools with high concentrations of poverty. On Thursday, the House concurred with the Senate’s version of the bill, and it is now headed to Gov. Walz. This is one of the governor’s priorities and he is sure to sign the bill quickly.

Sovereignty Day

Business at the Minnesota legislature paused on Monday for the second-ever Sovereignty Day at the Capitol. After 2019, the event was put on hold due to the pandemic. This year was also the first time the Senate participated. Senators joined members in the House chamber for a day of celebration and recognition of Minnesota’s 11 Sovereign Native American tribal nations. Leaders from each tribal nation used the day to educate the legislature on Minnesota’s tribes and their sovereign rights. They also directly addressed the legislature on their legislative issues. The day began with a drum circle and procession of the 11 tribal flags on the House floor. After speeches from each of the tribal leaders, members attended breakout sessions on important issues.

Legislators Get a Pay Raise

The state’s appointed Legislative Salary Council has approved a 7.25 percent pay raise for the Minnesota Legislature. The council, which votes on the salary for Minnesota lawmakers in March of each odd numbered year, raised the salaries with the hope that this year’s salary increase will attract and retain more candidates, as well as catch up with inflation. Once the raise goes into effect in July, base pay for lawmakers will increase to $51,750, a $3,500 increase from their current pay.

March 13, 2023

Halfway Point of Session

Ewald at the Capitol

Bills Signed into Law

So far, 13 bills have been passed by the legislature and signed into law by Gov. Walz:

HF 4 – “Driver’s license for all,” allowing undocumented Minnesotans to get driver’s licenses
HF 28 – Felon voting restored once prison sentence is completed
HF 213 – Emergency food shelf funding
HF 35 – Tying inflation to the budget formula
HF 50 – Easement and state land conveying and leasing requirements modified, state forests added to and deleted from, state parks added to, and sales and conveyances of land authorized
SF 33 – Attorney general funding
HF 7 – Carbon free by 2040
HF 26 – Federal Infrastructure Investment and Jobs Act funding provided, and money appropriated
SF 13 – Juneteenth (June 19) state holiday recognition
HF 1 – Protect Reproductive Options Act; fundamental right to reproductive health established
HF 37 – Race definition modified relating to hair styles and textures within the Minnesota Human Rights Act
SF 40 – Iron ore mining and related industry additional unemployment benefits program establishment
HF 31 – Federal tax conformity

Capital Investment Package Heads to Senate

On Monday, the House passed a $1.9 billion capital investment package. The package includes a $1.5 billion bonding bill, as well as a bill to authorize $393 million cash for construction projects. Both bills passed with broad bipartisan support — but are up for a challenge in the Senate, where Republicans are likely to oppose the borrowing bill if no tax cuts pass. DFL Senators might not be able to rely on their slim majority to pass the bonding bill (which requires a three-fifths majority). While Senate Republicans count on using the bonding bill as a bargaining chip, Senate Democrats say they will proceed with passing a cash-only bill if they fail to meet the supermajority threshold.

March 3, 2023

February Budget Forecast Includes Inflation

Ewald at the Capitol

February Budget Forecast Includes Inflation

On Monday, the Minnesota budget office released the February forecast, providing legislators with information on how much money will be available when crafting the next two-year budget. The $17.6 billion surplus forecast in November shrank slightly, down to $17.5 billion. It’s important to note that the February forecast was calculated with inflation being accounted for in the spending side of the budget. This is due to the recent passage of HF35, which put inflation back into the forecast. Without inflation, the February forecast would show that the budget surplus had grown closer to $19 billion.

First Committee Deadline

The pace of introductions, hearings and passage of bills continues at an unprecedented pace, more than double the average for the past 10 years. The pace of bill introductions is set to slow down after the first committee deadline next week, where committees must act favorably on bills in their house of origin. Committee deadlines are determined by an agreement of both the House and Senate and set restrictions for when committees can hear and decide upon certain types of bills; they are important to keep the legislature on track for the end of session.

Friday, March 10: Committees must act favorably on bills in their house of origin
Friday, March 24: Committees must act favorably on bills that met the first deadline in the other body
Tuesday, April 4 (5 p.m.): Committees must act favorably on major appropriation and finance bills

Renewed Efforts to Change Minnesota’s Flag

A bill to change Minnesota’s State flag is moving along the committee process. The North American Vexillological Association (the world’s largest association of flag experts) ranks Minnesota as one of the worst state flags. The author of the bill, Rep. Mike Freiberg, says the flag’s aesthetics are poor and “genocidal towards Native Americans.”

If passed, HF274 would create a Commission to redesign and replace the current flag and seal by May 11, 2024—Statehood Day. The new design will have to be certified by a 13-member commission including three public members appointed by the governor, plus one appointee from each of the following groups: the Council on Asian-Pacific Minnesotans, Council on Latino Affairs, Council for Minnesotans of African Heritage; the Dakota community; the Ojibwe community, the secretary of state’s office, Minnesota Historical Society, Capitol Area Architectural and Planning Board, and Explore Minnesota Tourism. Four members from the legislature will be non-voting members of the commission.

March 1, 2023

Minnesota Legislature’s Snow Day

Ewald at the Capitol

On Tuesday, the House and Senate passed a joint resolution to recess until Monday, cancelling committee hearings for the rest of the week and floor sessions on Thursday. The decision came after predictions of nearly two feet of snow and high winds that leaders feared would endanger lawmakers, staff, and the public commuting to the Capitol.

Gov. Walz declared a peacetime emergency, authorizing the Minnesota National Guard to help stranded motorists. The total snowfall underperformed expectations. MSP Airport measured 13.4 inches of snow Tuesday through Thursday, although some areas in the Twin Cities measured up to 20 inches. The lighter snowfall will allow plows to clear the roads before the legislature returns to work on Monday, just in time for release of the February Budget Forecast.

Inflation Added to Budget Forecasts

Minnesota is one of the few states that does not include inflation in our budget forecasts. That is all set to change with HF35/SF46. This bill will add inflation to the spending side of budget forecasts. The bill was signed by Gov. Walz this week, effective immediately. This comes just ahead of the February Budget Forecast on Monday, which will tell lawmakers what money is available for the two-year budget due at the end of session.

In 2002, the state was faced with significant budget deficits, so lawmakers removed inflation from the spending side of the state budget forecast to help balance the budget. The Minnesota Legislature just voted to add it back in, with opponents warning that adding inflation will overstate how much money government programs need to operate. If inflation was included in the most recent budget forecast in December, an extra $1.5 billion would be factored in for government costs.

“Driver’s License for All” Bill Passes Legislature

Before adjourning for the week, the Senate passed a bill that would allow undocumented immigrants to obtain a driver’s license. The bill passed 34-31 early Wednesday morning following seven hours of debate on the Senate floor. This bill, known as “driver’s licenses for all,” would remove the 2003 rule implemented by Gov. Pawlenty requiring applicants to show proof of legal U.S. residency to obtain a driver’s license.

Proponents of the bill argued that allowing undocumented immigrants to take driver’s education and obtain driver’s licenses will make the roads safer. Opponents worried that driver’s licenses for undocumented immigrants would increase illegal immigration and the risk of voter fraud. The bill now heads to Gov. Walz, who said he will sign it.

Voting Restoration Bill Passes Legislature

Minnesota law currently allows felons who have completed all or parts of their sentence and who are paroled or on probation to vote. Recent attempts to challenge the constitutionality of the law in the state Supreme Court failed, with the judges upholding the current law 6-1 and deferring to the Minnesota Legislature to decide whether felons should be barred from voting.

The voting rights restoration bill (HF28) as passed by the Senate Tuesday night (in the same floor session as driver’s licenses for all) would overturn the current law, allowing felons to vote upon leaving jail or prison. Gov. Walz has said he will sign the bill.

February 10, 2023

Minnesota Legislature’s Unrelenting Pace

Ewald at the Capitol

The fast pace of work at the Minnesota legislature does not show any signs of slowing down. A record number of bills have been introduced by both bodies and a closer examination of the numbers tells the full story. By the end of the fourth week of session the House and Senate outpaced the average number of bill introductions three-fold.* At that point, the House had introduced 968 bills and the Senate had introduced 903 bills.** As of Thursday, the House has introduced 1,582 bills and the Senate has introduced 1,526 bills.

The record number of bill introductions has also been accompanied by late night/early morning floor sessions and Friday Committee hearings that are usually reserved for the end of session. The unseasonably early push to pass high priority items through the legislative process contrasts with the typical end-of-session push. While it cannot be argued that lawmakers are procrastinating, only time will tell if the momentum keeps up throughout the session.

*For the fourth week of a biennium.
**The average number of bills introduced by the fourth week for an odd year session is 314 in the House and 265 in the Senate.

Tax Conformity

Ewald at the Capitol

Governor’s “One Minnesota Budget Plan”

This week, Gov. Walz unveiled the first two parts of his four-part budget plan. The first piece of the budget would allocate $12 billion over the next four years for increased investments in education, children and families. The second part of the budget unveiled this week focuses on the economy. This $4.1 billion package includes money for a paid family leave program, small businesses, agriculture, workforce development, and renewable energy. The entirety of the budget plan will be released on Jan. 24.

Committee Deadlines

It is the middle of January, and the third week of the 2023 legislative session. While the Minnesota constitution predetermines the start and end dates of each legislative session, committee deadlines are determined by an agreement of both the House and Senate. These set restrictions for when committees can hear and decide upon certain types of bills and are important to keep the legislature on track for the end of session. The final committee deadline, on April 4, comes right before the legislative spring break that is scheduled for April 5-10 this year.

Friday, March 10 — Committees must act favorably on bills in their house of origin
Friday, March 24 — Committees must act favorably on bills that met the first deadline in the other body
Tuesday, April 4 (5 p.m.) — Committees must act favorably on major appropriation and finance bills

DFL Priorities Move Forward

Several top priorities for the Minnesota House and Senate DFL majorities are making their way through the committee process. These include marijuana legalization, driver’s licenses for undocumented immigrants, paid family leave, and earned sick time for workers.

HF100/ SF73: would decriminalize the recreational possession and use of marijuana for those over the age of 21, as well as begin a process to expunge the records of Minnesotans who have been previously convicted of low-level marijuana crimes. The nearly 250-page bill is likely to make several committee stops before it reaches to the House and Senate floor.
HF4/SF27: would allow undocumented immigrants to obtain a driver’s license or state identification card. It would also include data practices to ensure immigration status isn’t shared across state agencies. The bill’s most recent stop was the House Judiciary committee, where it passed on Thursday morning.
SF2/HF2: would create a state-government run paid family and medical leave program. Workers would be given up to 12 weeks of paid family leave and an additional 12 weeks of paid sick leave. The bill passed the Senate Labor committee but was amended and is now being re-referred to the committee.
HF19/SF34: would mandate employers to provide earned sick and safe time at the rate of 1 hour for every 30 hours worked up to a maximum of 48 hours per year, unless the employer decides to provide more. HF19 has been approved in two House committees and awaits a hearing in the House State and Local Government Committee. SF34 has been approved by the Senate Labor Committee and awaits a hearing in the Senate State and Local Government and Veterans Committee.
HF26/SF24: proposes to unlock federal funds from the Infrastructure Investment and Jobs Act so the construction industries can begin planning. The bill includes $235 million to restore Trunk Highway Bonds used as a state match for bridge, community resiliency and carbon reduction programs and to address inflationary impacts and gaps in existing projects. There is also $80 million to fully fund the approved State Transportation Improvement Program. HF26 has cleared the House committee process and is scheduled for a vote on the House floor on Monday, Jan. 23. SF24 is scheduled for a hearing in the Senate Transportation Committee on Monday, Jan. 23, at 3 p.m.

January 27, 2023

Walz “One Minnesota Budget” Details Announced

Ewald at the Capitol

Gov. Walz unveiled the final part of his four-part budget plan for the 2023-2024 biennium on Jan. 24. The total budget expenditure sits at $65.2 billion, with an additional $8 billion in tax cuts. Most of the record-shattering $17.6 billion budget surplus will be spent with these budget proposals, but the recommendations also include leaving $1.3 billion on the bottom line.

Details on each section of the four-part plan are outlined below. Links to further information can be found in the headline of each section.

Children, Families, and Schools:

Child tax credit of $1,000 per child to families making less than $50,000
Increasing the general education formula by 4 percent in 2024 and 2 percent in 2025
Reduce the special education cross subsidy by 50 percent
Free school meals for all Minnesota students

Economy and Workforce:

Establish a paid family and medical leave program at a cost of $4.1 billion
$500 million in tax credits to investments in companies with founders who are women, veterans, people of color, or headquartered in greater Minnesota
Broadband for all homes and businesses by 2026

Health, Housing, and Public Safety:

$1.5 billion for affordable housing, $100 million to rehabilitate existing affordable housing
$300 million for public safety funding for to city, county and tribal governments to determine how to use
$17 million for a MinnesotaCare public health care option

Tax Cuts, Tax Hikes, Walz Checks:

$4 billion for direct, non-taxable checks of $1,000 to Minnesotans making less than $75,000; $2,000 for families earning less than $150,000
$219 million to reduce Social Security benefit taxes
1.5 percent surcharge on capital gains of individuals, trusts and estates valued at $500,000-$1 million
4 percent surcharge on capital gains of individuals, trusts and estates valued over $1 million

January 6, 2023

The 2023 Legislative Session Begins, Walz Inaugurated for a Second TermThe 2023 Legislative Session Begins, and more

Ewald at the Capitol

The 2023 Legislative Session Begins

The 2023 legislative session began this week with in-person floor sessions in both bodies after almost three years of virtual legislating at the Minnesota Capitol. Governor Tim Walz was inaugurated to his second term on the eve of the first day of session. Lawmakers in both bodies were sworn in on Tuesday before session officially began at noon.

With this new freshman class, Minnesota swore in a historically diverse legislature. There are a record number of people of color, women, and people who identify as LGBTQ, the House and Senate are both led by women, and Bobby Joe Champion is the first Black president of the Senate.

While the first floor sessions in the House were sleepy this week, the Senate spent hours Wednesday determining a proposal to allow remote voting.

Walz Inaugurated for a Second Term

Governor Tim Walz and Lieutenant Governor Peggy Flannagan were sworn into office for their second term on Monday. Constitutional officers Attorney General Keith Ellison, Secretary of State Steve Simon, and State Auditor Julie Blaha were also sworn in during the inauguration ceremony at the Fitzgerald Theatre. Governor Walz’s second term will have him presiding over a DFL majority House, Senate, and a full DFL slate of constitutional officers. During his inauguration, Walz mentioned several priorities he hopes to advance this session including:

Investing in public education, including special education and universal school meals
Climate change mitigation efforts, including the goal to make Minnesota carbon emission-free by 2040
Paid family leave program
Expand voting rights, including automatic voter registration
Conform the state tax code to federal law
Legalizing adult use of marijuana

December 12, 2022

$17.6 Billion Budget Surplus, Inflation, and more

Ewald at the Capitol

$17.6 Billion Budget Surplus
On Tuesday, Dec. 6, the Minnesota Management and Budget (MMB) office released the much-anticipated state Budget and Economic Forecast. The twice-annual forecasts are essential information for Minnesota lawmakers to determine how much money they have to work with when creating the next two-year budget. The previous record-setting surplus of $9.25 billion announced in February 2022, has been dwarfed by the forecast $17.6 billion budget surplus for 2023. Much of this massive surplus has to do with a large portion of last year’s surplus remaining unspent, when legislators left almost $8 billion on the table when the 2022 legislative session ended. In addition to the surplus that remained from last session, the continued budget growth is credited to strong performance in income, sales and corporate taxes, the three main revenue sources for Minnesota. With this information in mind, Gov. Tim Walz must submit his budget recommendations by the end of January. Legislators will pay close attention to his proposals as they decide upon a final budget that must be in place by the end of June.

Inflation
The Budget and Economic Forecasts released by MMB do not take inflation into account. The current rate of inflation (8.1%) is more of a factor for the 2023-2024 budget than ever in recent history. High rates of inflation impact the cost of funding current services and projects and may make it difficult to determine the cost of funding future services and projects. Legislative leaders and the governor have raised a desire to include inflation into the forecast, so look for more debate and conversation on this topic.

Aftermath of Election, Walz Cabinet, and more

Ewald at the Capitol

Aftermath of Elections
On Tuesday, Nov. 29, the State Canvassing Board made elections official, although two election outcomes remain uncertain. The board approved plans for taxpayer-funded recounts in House districts 3A and 3B because the vote count difference was less than .5%. Since our last update, House minority leadership has been elected, committee structure has been decided and chairs have been appointed. Expect more updates on committee member assignments in upcoming issues of Ewald at the Capitol.

Walz Cabinet
Despite Gov. Tim Walz’s successful re-election bid, the executive branch is going through changes. Gov. Walz reappointed just 16 cabinet members, leaving 6 positions vacant. The open positions include commissioners in the departments of Health, Education, Revenue, Public Safety, Labor and Industry, and the Iron Range Resources and Rehabilitation Board. Gov. Walz hopes to fill these positions by mid-December. Expect updates on the new commissioners in upcoming issues of Ewald at the Capitol. Leadership The latest round of leadership elections for the 2023-2024 biennium has concluded with House Republicans electing Representative Lisa Demuth (Cold Spring) to serve as the minority leader. Following her election, she appointed Rep. Paul Torkelson (Hanska) to serve as Deputy Minority Leader, Rep. Jim Nash (Waconia) to serve as Minority Whip; as well as Rep. Dave Baker (Willmar), Representative-elect Elliot Engen (White Bear Lake), and Rep. Spencer Igo (Grand Rapids) to serve as Assistant Minority Leaders.