Minnesota’s Legislature finished passing the remainder of a $46 billion budget early Friday after three extra days, long nights and some horse-trading to win crucial DFL votes.

The Legislature wrapped up its work on the fourth day of a special session, following House and Senate votes to pass a nearly $1 billion public works borrowing package just before 3 a.m. Earlier in the evening, lawmakers approved other final pieces of the budget, including a $650 million tax-cut package, new spending for schools and a transportation bill.

District 27A Rep. Peggy Bennett said she expects Dayton will sign the bills. Dayton said he will decide whether to sign the bills by midnight Tuesday.

Tax bill

The tax bill includes the Shell Rock River Watershed District’s request to extend its half-percent sales tax for either 15 years or until $15 million has been collected.

In a statement following the legislative session, Albert Lea Lakes Foundation President Laura Cunningham said she was pleased with the result.

“Albert Lea’s local-option sales tax is included in the bill, and we look forward to the governor signing it,” she said. “Thanks to the work of Bennett and (District 27 Sen. Dan Sparks), the importance of improved water quality continues for our area.”

As of press time, Cunningham said there was some uncertainty whether Dayton would veto the tax bill.

Sparks, DFL-Austin, described the tax bill as a “good bill” that includes tax relief for small businesses, farmers, Social Security and college graduates paying off student loan debt.

“There was relief for just about all Minnesotans in that bill,” he said.

The bill included a $15 million increase per year in local government aid and $25 million increase in county program aid. Sparks said though he supported a larger increase in LGA funding, the amount was a step in the right direction.

In a press release, Bennett said legislators were able to compromise on tax relief and transportation — two issues she deems as having the most importance in the state.

“Our bipartisan budget puts Minnesotans first, and will go to help residents in our area and around the state,” she said. 

The tax cut is the largest in two decades, Bennett said.

Albert Lea City Manager Chad Adams said earlier this week the LGA funding increase would cover a 2 percent increase in the city’s tax levy.

The House and Senate worked in fits and starts from Thursday afternoon into the early hours Friday.

Despite extensive local work being progressed this year, Sparks described this session as his most frustrating in his 15 years at the Legislature, partially because the special session that was  supposed to last only one day lasted four. He expressed disappointment that bills were introduced late in the session without much time for public review, noting legislators sometimes only had an hour or two to view a bill before voting on it.

“Process-wise, we could have done a much better job,” he said.

Bennett said a full budget was available to Dayton a few weeks ago, reflecting their desire to avoid waiting until the final hours of the legislative session to introduce legislation,

A majority of  items in bills passed this week were known to legislators for a while, she said.

Constituents will benefit from legislation passed this year, Bennett said.

Well before the bills were sent to his desk, Dayton was facing pressure from Democratic allies to veto several budget bills. Senate Majority Leader Tom Bakk called on him to strike down the tax bill, warning it would harm the state’s financial footing, while Senate Majority Leader Paul Gazelka said he believed Dayton would sign the bill because the Legislature worked with him during the process.

The prospect of finishing the budget bills before Memorial Day weekend wasn’t always clear — as late as Thursday afternoon, the path to a resolution looked tougher. Two Republican senators were gone, leaving the GOP short the votes it needed to pass the remaining budget bills, requiring some trade-offs to win critical Democratic votes.

Gazelka confirmed they removed a measure that would have changed how labor contracts are ratified from a financing package for state agencies to get two Democrats on board.

That resolution appeared to break a logjam that kept the Legislature largely at a standstill throughout the week. Within minutes of passing the state government budget, the Senate quickly approved a budget for public schools with money to increase the per-pupil funding formula for preschool by 2 percent — one of Dayton’s priorities.

Education

Sparks said the education bill was good for Albert Lea and surrounding cities.

The Legislature’s education funding bill invests $1.3 billion in additional funding to Minnesota schools, as well as needed reforms to teacher licensure and teacher layoffs, Bennett said.

“I’m proud to increase funding for Minnesota schools, and help our learners by putting and keeping the best teachers in our classrooms,” she said. “This is so vitally important for our future, and I’m glad we made it a priority this session.”

Albert Lea Superintendent Mike Funk said earlier this week he was pleased with the education bill, noting it added more funding for schools so they could keep up with the cost of inflation, and it fully funded the district’s voluntary pre-K program. The bill also made permanent a compensatory pilot program that the Legislature previously had to renew every two years, he said, noting since the compensatory program and voluntary pre-K program are now permanent, teaching positions aligned to the funding will not have to be cut.

Bonding bill

The Legislature also approved more than $1 billion for public construction projects, including nearly $120 million for the University of Minnesota and more than $92 million for the Minnesota State Colleges and Universities system.

But a critical piece of that bill was more than $250 million for transportation infrastructure, part of a bargain struck between Dayton and Republicans that also puts $300 million of the state’s $1.65 billion budget surplus toward road and bridge repairs. It comes after more than two years of struggling to find an agreement to fund a backlog of infrastructure projects.

Extending sanitary sewer and water service to the Stables area north of Albert Lea is included in the bonding bill. A $7.4 million Riverland Community College request to relocate truck driving and collision programs from Austin to Albert Lea and to integrate the programs into shared spaces with auto service programs was not.

Sparks said he was disappointed Riverland Community College work was not included in the bonding bill, but noted the transportation bill that passed includes millions of dollars for cities with under 5,000 people, such as Glenville, Hayward and other local communities.

Bennett said she was disappointed Riverland work was not included in the bonding bill, noting she advocated for that project and for a bonding project that would connect Blazing Star Trail from Albert Lea to Hayward, which was also not included in this year’s bill. 

She was pleased that transportation work was completed without having to raise the gas tax — a point of contention between the House, Senate and Dayton. She said shovel-ready local bridge projects will be helped by the bill.

“That’s good, and we were able to do this increase without raising taxes on people,” Bennett said.

Health care

A new health care budget was among the trickiest bills to pass, requiring some last-minute tweaks in the middle of the night to get Dayton’s sign-off. It would make more than $450 million in cuts to the state’s spending on health care services, but angered conservatives and liberals alike because it tries to limit the pain of those cuts by emptying a dedicated health care account to cover some of those costs.

“This bill drains the Health Care Access Fund down to zero and leaves us unprotected from the imminent cuts that are coming from the federal government,” said Sen. Tony Lourey, DFL-Kerrick.

At least one bill as of Friday morning was destined for a sure veto. The Legislature on Thursday sent Dayton a mix of labor measures he wanted — like increased pension funds, extending parental leave for state employees and union contracts — and one that met his ire: barring local governments from passing their own minimum wages or sick leave policies.

Dayton called it “unconscionable” and vowed he would strike it down.

— The Associated Press contributed to this report.