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Minnesota lawmakers left St. Paul without passing $8 billion in tax and spending bills. So now what?

Here's a look at what happened in the final weekend of the legislative session and what could happen next.

Minnesota Capitol
Lawmakers at the Minnesota Capitol worked to finish up supplemental budget bills on Wednesday, May 18, 2022, with just days left in the legislative session.
Dana Ferguson / Forum News Service
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ST. PAUL — The Minnesota legislative session fizzled to a close on Monday, May 23, without resolution on a number of issues, including how to dole out the historic $9 billion budget surplus.

Ahead of the Sunday, May 22, deadline for passing bills at the Capitol, lawmakers finished writing a nearly $4 billion tax bill that would've cut the lowest income tax bracket and eliminated the tax on social security benefits.

They also agreed to spend $4 billion on spending for schools, public safety, long-term care facilities and group homes.

But partisan disagreements over the biggest spending bills kept them from getting done on time. And without those pieces of the end-of-session agreement, Democrats said the tax bill shouldn't move forward.

Now, Gov. Tim Walz and leaders in the Minnesota House of Representatives, along with groups that wanted to see lawmakers pass those bills before the deadline, say lawmakers should come back for overtime.

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But Republicans, frustrated about not being able to pass the tax bill before the clock ran out, say there's little point since lawmakers couldn't reach deals in the four-month regular session.

Here's a look at what happened this weekend and where things could go from here.

What happened?

Long story short: lawmakers blew their deadline to finish and pass an $8 billion spending and tax plan.

A week before the last day of session, legislative leaders and the governor announced a deal to spend $4 billion on a tax relief package, $4 billion on new state spending and leave $4 billion on the bottom line. With a $9 billion budget surplus and well-set rainy day fund, they said the agreement could make good use of the extra money and keep the state in a strong position moving forward.

What they didn't determine in that agreement was how the money should be used for each specific area. So it came down to committee members to decide how they could use $4 billion to cut taxes or $1 billion to boost funding for schools or health and human services programs.

That proved to be too big a hurdle to jump in one week.

While some committees reached deals on how to spend their budget targets, others couldn't figure it out before Sunday at 11:59 p.m.

So while both chambers passed new money for agriculture, broadband, veterans services and mental health, they couldn't get to proposals laying out new funding for schools, public safety, transportation, health and human services or tax relief.

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The tax plan, along with higher education and commerce spending bills, did get done before the deadline, but it didn't make it through both chambers and to the governor's desk.

Democrats at the Capitol said the end-of-session agreement stipulated that all spending bills and the tax bill needed to pass together. Republicans, meanwhile, said lawmakers should pass the tax bill before the deadline even if other proposals got held up.

What happens next?

Senate Majority Leader Jeremy Miller
Minnesota Senate Majority Leader Jeremy Miller, R-Winona, just after midnight on Monday, May 23, 2022, speaks to reporters at the Capitol after the legislative session closed out without major deals coming across the finish line.
Dana Ferguson / Forum News Service

It's not entirely clear whether lawmakers will come back to St. Paul to finish the last of their business.

Walz has said he wants to call a special session to finish and pass the remaining spending bills and a tax bill. But he said he'd reach an agreement with legislative leaders about the parameters of the special session and button up unfinished bills before that happens.

House Speaker Melissa Hortman, DFL-Brooklyn Park, supports that approach and said the outstanding bills could get finished in a short special session. Senate Majority Leader Jeremy Miller, R-Winona, meanwhile, has said he's reluctant to return to the Capitol since lawmakers couldn't get their work done within the regular legislative session.

The leaders and Walz met in private on Monday afternoon and broke without a plan. Walz said he hoped to speak with Hortman and Miller again later in the week after they'd taken a break from the Capitol and said he expected lawmakers would be interested to return after hearing from constituents.

"I’m hearing pretty clearly from Minnesotans, ‘Give us the money back from this and invest in the things that make our lives a little easier,'" Walz told reporters. "It shouldn't be that hard. We can get win, win, wins across the board.”

Do lawmakers have to come back to St. Paul for a special session?

Lawmakers do have to reconvene for a special session if the governor calls one, but what happens from there is up to them.

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The Legislature calls that shots once it is back in session, so lawmakers could take up whatever issues they want and stay in session for as long (or short) as they see fit.

Historically, legislative leaders and the governor post a public agreement before a special session about what they will take up during that extra time and lawmakers tend to abide.

Though, in 2021 the GOP-led Senate remained in special session for an extra week to hold commissioner confirmation hearings . Ahead of a termination vote, then-Minnesota Pollution Control Agency Commissioner Laura Bishop resigned from her role.

The agency head drew support from Gov. Tim Walz, Democrats and environmental groups and opposition from auto dealers and GOP legislators.

What happens if they don't come back?

Lawmakers passed a two-year budget bill last year that runs through June 2023. So the state will continue running if they don't come back.

And the roughly $8 billion budget surplus will carry over to be included in the budget bill that legislators write during the 2023 legislative session.

Advocates for long-term care residents, Minnesotans with disabilities, school workers, city leaders and others said waiting until next year to address the spending would spur additional problems.

Constituents and interest groups spent months urging lawmakers to take up their issues this session and to use the surplus dollars to curb crises, particularly in staffing across several sectors.

"Students and educators are reeling from mental health crises," said Education Minnesota President Denise Specht. "There’s a lack of substitute teachers and bus drivers. Students need extra attention to recover from the pandemic while our schools are losing too many experienced teachers to burnout."

Long-term care providers said they were on the cusp of closing hundreds of facilities in Minnesota without additional funding from the state.

And Greater Minnesota city leaders said local governments would see it as an "absolute failure" if lawmakers bypassed a special session and failed to pass tax and bonding bills.

Republicans on the campaign trail said lawmakers should skip a special session and let the governor and Legislature decide what to do with the money next year.

All 201 legislative seats are set to be on the ballot in November, as is the governor's office.

MORE FROM DANA FERGUSON:

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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