MN Lawmakers Reach Deal On Budget Targets, Special Session Needed

(KNSI) – Minnesota lawmakers have reached a deal on budget targets but will need overtime to pass a budget.

The Minnesota Legislature will go into a special session in June to finalize a two-year, nearly $52 billion budget to keep Minnesota running.

Governor Tim Walz met with leaders in the Minnesota House and Senate late Sunday and into Monday morning to reach an agreement.

“It’s a good day, Minnesota. It proves once again that our democracy is strong, that compromises of virtue, not advice, and that setting down and listening to one another and truly valuing differences of opinion at the end of the day can bring you an agreement that strengthens everyone.”

A vital part of the compromise was how $2.8 billion in federal COVID relief would be spent.

“Recovery from COVID was absolutely critical. Understanding that COVID hit different people differently and that the need to recover. Our children need to recover, those families who are most impacted and the small businesses.”

Walz will get to spend $500 million as he sees fit, and the rest will be a compromise between the Legislature and the Governor.

Senate Majority Leader Paul Gazelka says getting an agreement for tax cuts was essential to reaching an agreement.

“We have about a billion dollars of tax relief. And that’s everything from the paycheck protection program, that was those loans that were given to small businesses to keep their employees, to the unemployment benefits. We’re not going to tax those either. And then a number of other things that will be in that were very important to us.”

Minnesota will also forgive taxes on loans for the federal Paycheck Protection Program for businesses with less than 350 employees.

Taxes will also be cut for those who received up to $10,200 in extra federal unemployment benefits.

While the budget framework has been agreed to, Gazelka says there’s still a long way to go.

“We did not address every policy issue at this point. We know that the work is not done. It just began. And now we have clear guidance about where to go.”

Police accountability measures will be part of the final package, but no details were given.

Lawmakers also want to change how the Governor retains emergency powers.

Financial spreadsheets are due by May 28, and all written language for budgets must be done by June 4.

Lawmakers must reach a final deal by June 30, or the state will shut down on July 1.

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