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Minnesota lawmakers tout bipartisan negotiations, partisan wins in $52B budget

With two Democrats and one Republican spearheading budget negotiations in Minnesota's politically divided Capitol, there's something for everyone in the state's final $52 billion, two-year budget.

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Gov. Tim Walz, Lt. Gov. Peggy Flanagan and others celebrated the passage of Minnesota's $52 billion two-year state budget in the state Capitol in St. Paul on Thursday, July 1, 2021. Sarah Mearhoff / Forum News Service
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ST. PAUL — Delivering the final deal just in the nick of time , Minnesota's politically divided lawmakers are celebrating their $52 billion budget, hammered out largely behind closed doors thanks to bipartisan negotiating and individual policy wins for each party.

Standing in a packed reception room in the state Capitol for the first time since the start of the coronavirus pandemic, a maskless Gov. Tim Walz was all smiles on Thursday, July 1 as he touted the historically large budget. With his executive emergency powers rescinded and roughly 70% of Minnesota adults having at least one COVID vaccine dose, Walz said now is the time to focus on rebuilding the state.

“That long, dark winter has ended. The sun is shining,” he said. “Now the work of recovery begins and that’s what this budget was about.”

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Gov. Tim Walz on Thursday, July 1, 2021 celebrated the passage of Minnesota's $52 billion two-year state budget, saying it will help the state recover from the coronavirus pandemic. Sarah Mearhoff / Forum News Service

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Spanning 13 individual bills, the mammoth budget includes nearly $1 billion in tax cuts, a 15-year record increase in education spending , tens of millions of dollars to help small businesses recover from the past year, $250 million to be doled out in direct payments to frontline essential workers, nearly $600 million to support child care needs and more.

And while lawmakers’ primary constitutional need was to balance the state budget, they passed a slate of policy reforms, as well. Public safety reform — “by far” the most difficult bill to reconcile between Republicans and Democrats, according to Senate Majority Leader Paul Gazelka, R-East Gull Lake — held the spotlight throughout negotiations, as Minnesota continues to reckon with the police killings of George Floyd, Daunte Wright and others.

Negotiations between the Democratic-controlled House, Republican-controlled Senate and Democratic Governor’s office went until the 11th hour of their June 30 deadline. At stake was the very functioning of Minnesota’s state government itself; without a budget passed on time, state agencies and services would begin shutting down , laying off state employees, halting services and closing down facilities.

But lawmakers averted that fate, passing the last of their bills on late Wednesday and early Thursday. Negotiating the final product proved to be difficult in the nation’s only divided Legislature, and further complicating the math were billions of dollars in coronavirus aid from the federal government over the past year. Lawmakers had to decide how to spend the money, but also be careful of creating new programs or services that would need ongoing state funding after the federal aid runs out.

Afterward, leaders touted their ability to work across the aisle — as well as their caucuses’ own legislative victories. It was a drastic change in tone from the start of the Legislature’s regular session in January, where a public get-together of bipartisan leaders devolved into a yelling match.

Speaking to reporters in the Capitol on Thursday, House Speaker Melissa Hortman, D-Brooklyn Park, admitted that while a full Democratic supermajority would have delivered her caucus more wins, but overall, she is “very pleased that with a divided Legislature, we were able to make compromises and get some really good things done for Minnesota.”

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House Speaker Melissa Hortman, D-Brooklyn Park, and House Majority Leader Ryan Winkler, D-Golden Valley, speak to reporters in the Minnesota state Capitol in St. Paul on Thursday, July 1, 2021. Sarah Mearhoff / Forum News Service

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“To the great frustration to some members of my caucus, I look for win-wins, and Sen. Gazelka certainly had some very significant wins,” she said at a news conference. “On the other hand, Democrats achieved significant investments in education and health and human services.”

Democrats’ major policy wins included the direct payments to frontline workers, education and child care funding increases, a plan to help needy Minnesota renters as Walz’s eviction moratorium expires, tax breaks to those who received expanded unemployment benefits during the pandemic and aid to small businesses who were damaged by last year’s civil unrest.

Republicans secured their own wins, too, fighting back Democrats’ proposal to increase taxes for Minnesota’s wealthiest earners, and bringing an end to Walz’s 15-month-long emergency declaration and corresponding executive powers. They also kept a cap on Democrats’ proposals for police reforms, holding back proposals they deemed “anti-police.”

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Senate Majority Leader Paul Gazelka, R-East Gull Lake, talks to reporters at a news conference at the Minnesota state Capitol in St. Paul on June 30, 2021. (Sarah Mearhoff / Forum News Service)

“What I will say about working with the Speaker is, she kept her word, I kept my word,” Gazelka told reporters Wednesday. “We had to navigate through an extremely difficult situation. She is a liberal and I’m conservative and for those two sides to come together and just barely touch, close the deal and get done is way harder than you can imagine.”

Mearhoff is a Minnesota Capitol Correspondent for Forum News Service. You can reach her at smearhoff@forumcomm.com or 651-290-0707.
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