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'Major roadblocks' slow budget deal at the Capitol, make overtime all but certain

The comments come after three top leaders spent days in secret negotiations without a meaningful breakthrough.

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Minnesota House Speaker Melissa Hortman, left, and House Majority Leader Ryan Winkler, right, on Wednesday, May 12, 2021, said the budget negotiations were ongoing at the Minnesota Capitol but noted that lawmakers likely wouldn't finish their work before the legislative session was set to end on May 17. Dana Ferguson / Forum News Service
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ST. PAUL — Minnesota lawmakers are on track to go into overtime as secret budget negotiations continue at the Capitol and sizeable philosophical divides remain in the legislative session's final days.

Legislative leaders and the governor on Wednesday, May 12, said they continued work on budget targets but had yet to reach a compromise. With just five days left before the legislative session was set to come to a close, they said they might still be able to finish in time, though the prospect grew increasingly unlikely.

Three leaders — Gov. Tim Walz; Senate Majority Leader Paul Gazelka, R-East Gull Lake, and House Speaker Melissa Hortman, D-Brooklyn Park — have entered into private negotiations about the proposed targets and they've so far not emerged with a deal. Last week they said they'd be able to finish the legislative session on time if they reached the targets by Friday, May 7. But that date came and went without an agreement.

At stake is a two-year budget of more than $50 billion that will fund schools, health care programs, public safety and state government. Lawmakers are also weighing a tax hike on top earners as well as tax relief for businesses that took our Paycheck Protection Program loans and Minnesotans who received unemployment insurance benefits during the pandemic.

Republicans and Democrats each went to the negotiating table with priorities that they're unlikely to give up. And those demands have delayed a compromise over how much the state can spend on different areas. Without those budget targets, legislative committees can't button up their spending bills. Lawmakers have to pass a budget by June 30 or face a state government shutdown.

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"We're coming to the last few days of session and so it would be very difficult to finish on time given the logistics involved in putting the bills together. So even if we had an agreement on all the numbers today and all of the policies today, we are at a point where the staff wouldn't be able to turn that into bills that we could pass by Monday," Hortman said.

For GOP lawmakers, top concerns have included plans to let parents use state education funds to enroll their children in private school, delay the implementation of California car emission standards, end the peacetime emergency for COVID-19 and exempt state taxes on federal business loans and unemployment insurance. Democrats, meanwhile, have said the state needs to create a new tax bracket for top earners to spur funding for Minnesotans hit hardest by the pandemic, pass additional restrictions on police and boost funding to schools.

MORE FROM THE CAPITOL:

  • Minnesota to see $2.83 billion from American Rescue Act, reviving tax relief debate U.S. Treasury officials on Monday announced that the state would receive more than $250 million more than was initially expected.
  • Minnesota police groups say they're working on accountability, voice concerns at the Capitol Lawmakers have taken up policing law re-writes following the killings of George Floyd and Daunte Wright at the hands of police.
  • Minnesota judge OKs California Clean Car standard, potentially opening door to more electric vehicles The decision could make Minnesota the first Midwestern state to adopt the rule change modeled in California.

Republican leaders said the state shouldn't raise taxes when the state projects a $1.6 billion budget surplus and a $2.8 billion boost to the state in federal COVID-19 aid. Legislative leaders entered negotiations with a $1 billion divide between their budget plans and with several different policy priorities. And while they said there'd been traction in recent talks, sizeable disagreements remained.
“It’s possible that we get done on time, there’s also some major roadblocks that we have to navigate through, everything from police accountability to emergency powers to California emission standards, there’s just a number of things that we have to figure out but I think the good news is we’re talking to each other, not over each other," Gazelka said. "We're not behind yet."

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Minnesota Senate Majority Leader Paul Gazelka, R-East Gull Lake, on Wednesday, May 12, 2021, spoke with reporters in the Minnesota Senate chamber about ongoing budget negotiations. Dana Ferguson / Forum News Service

Minority leaders at the Capitol said they'd not been in on the negotiations but weren't hopeful about an on-time finish.

"I am not optimistic," House Minority Leader Kurt Daudt, R-Crown, told reporters.

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The former House Speaker urged House Democrats to pass a bill erasing state income taxes on Paycheck Protection Program loans and unemployment insurance benefits before May 17 and suggested that he and former Senate Majority Leader Tom Bakk, I-Cook, could reach a budget deal within a matter of hours.

Others said they were keeping their calendars open next month in the event the Legislature need extra time to wrap up their business.

"I've been here long enough to never make plans for early June," Senate Minority Leader Susan Kent, D-Woodbury, said. "I make the analogy, it's like sleep when the baby sleeps. I find the breaks where I can. I just know we're going to have work to do in June and I'm ready to do it."

Follow Dana Ferguson on Twitter @bydanaferguson , call 651-290-0707 or email dferguson@forumcomm.com

Dana Ferguson is a Minnesota Capitol Correspondent for Forum News Service. Ferguson has covered state government and political stories since she joined the news service in 2018, reporting on the state's response to the COVID-19 pandemic, the divided Statehouse and the 2020 election.
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