Minnesota Legislature adjourns after passing $72B budget; Democrats celebrate as GOP hits tax hikes

Published 6:31 am Tuesday, May 23, 2023

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ST. PAUL — The Minnesota Legislature put the final touches on a $72 billion state budget and adjourned for the year Monday night as Democrats celebrated enacting an ambitious agenda that ranged from protecting abortion rights, to providing more resources for education, to legalizing marijuana.

The big tax bill of the session, which cleared its final test Sunday evening, included $3 billion in tax cuts, including modest one-time rebates from the state’s $17.5 billion budget surplus. But lawmakers also approved tax increases to provide ongoing funding for long-term initiatives like transportation improvements and a new paid family and medical leave program.

Both chambers adjourned around 10 pm., well ahead of the midnight deadline, and are due to reconvene Feb. 12.

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“The work we’ve done over the last five months will make a generational impact on our state — it will lower costs, improve lives, and cut child poverty,” Democratic Gov. Tim Walz said in a statement.

Top Democratic legislative leaders agreed. They said they met all the major goals they laid out at the start of the session in January after taking control of both the House and Senate for the first time in eight years. Their top priorities got the first 30 bill numbers in each chamber.

“We set out at the very beginning of session with our top 30 goals, introduced jointly with the House and the Senate. And as of the end of the day, we are going to pass the entirety of our top priorities with the House and Senate,” House Majority Leader Jamie Long, of Minneapolis, told reporters.

“What I wanted us to do was under-promise and over-deliver. And I feel like that’s what we did,” said House Speaker Melissa Hortman, of Brooklyn Park. “When we came in in January, we didn’t say we would be able to do everything. We knew what we wanted to work on, but we didn’t make promises that we wouldn’t be able to keep. So, I’m just thrilled that we were able to check off everything.”

Democrats have frequently described the legislation they have passed this session as “transformational,” “historic” and “game-changing.”

“We’re just all a little overwhelmed — absolutely giddy — with the work that has been done here,” Democratic Sen. Mary Kunesh, of New Brighton, told reporters.

Kunesh highlighted legislation aimed at helping people of color. Her list included billions more for schools, a new ethnic studies curriculum, more limits on no-knock warrants by police, improvements for tracking hate crimes, paid family and medical leave, opening the MinnesotaCare health plan to more residents regardless of immigration status, and more assistance to first-time homeowners.

But the Republican minority, which was largely sidelined on most contentious issues this session, was upset that Democrats spent most of the surplus instead of returning it to taxpayers. And they decried Democrats for raising taxes by $2.2 billion over the next two years via the tax bill alone, and passing a two-year budget that’s 40% bigger than the current budget.

“Republicans represent nearly 50% of the state but at the end of the day this has been the most partisan session, not only in my memory, but in the history of the state,” GOP Senate Minority Leader Mark Johnson, of East Grand Forks, said in his closing speech.

Democrats tout the tax bill as the largest tax cut in state history, with direct rebates of $260 per filer and up to three dependents for a maximum of $1,300, subject to income limits, plus tax credits for families with kids that they say will cut child poverty by a third. Social Security benefits will be fully tax exempt for Minnesotans making $100,000 or less and partly exempt for those whole earn up to $140,000. But the bill also includes tax increases on companies with global income and some reduced deductions for wealthy individuals. Republicans said the various tax increases across the budget canceled out any relief.

The transportation bill approved in both chambers Sunday contains new funding for public transit, roads and bridges. Some of that will come from a 0.75% sales tax increase in the Twin Cities metro area, a 50-cent fee on non-food deliveries over $100 and higher drivers license and vehicle registration fees. It also includes money to help finance restoring passenger rail service between the Twin Cities and Duluth.

Senate Republicans had blocked a public infrastructure borrowing package known as a bonding bill all session as they pressed for deeper tax cuts from the surplus. But they settled over the weekend for a $300 million cash infusion to help nursing homes that are struggling with staff shortages and cost pressures stay open.

In return, the GOP delivered enough votes Monday to reach the 60% supermajority required in each chamber to pass the $2.6 billion package, which includes $1.5 billion in borrowing plus $1.1 billion in cash.

Lawmakers over the weekend also gave final approval to legalizing recreational marijuana. It will be legal to possess and grow your own cannabis, within limits, starting Aug. 1. A website for the new Office of Cannabis Management has already gone live, but retail sales are probably at least a year away.

Democrats made abortion rights one of their top priorities of the session. They moved quickly to enshrine the right to abortion and other reproductive health care into Minnesota statutes in January. They followed up with legislation to protect patients from restrictive states who come to Minnesota for abortions.

They took a final step Monday when they passed the final version of a $3.5 billion health and human services budget bill that formally repeals most restrictions on abortion that were left on the books after a judge declared them unconstitutional last summer. That drew protests from Republicans, who said it leaves the state with essentially no abortion limits.

Disappointed lawmakers who had been pushing for all session higher staffing levels for nurses and direct care workers at Minnesota hospitals announced a scaled-back compromise Monday evening. The bill was originally called the Keeping Nurses at the Bedside Act, but it ran into stiff opposition from the state’s hospital association, and the Mayo Clinic recently threatened to cancel projects unless it was excluded.

The substitute Nurse and Patient Safety Act has language aimed at preventing workplace violence at hospitals, but it dropped provisions to mandate higher staffing. It easily passed Monday night.

“We didn’t get everything that we wanted. We’re not going to get everything we need,” Democratic Sen. Erin Murphy, a registered nurse from St. Paul, told reporters. But she said it will make a difference, and that they’re not giving up in their fight for better working conditions and patient care.