Minnesota Legislature to return from break Monday with budget battle ahead

CBS News

18-04-2025

There is a budget battle brewing when the Minnesota Legislature returns to the state capitol on Monday after a week-long break, as the sprint to the finish line in mid-May begins.
No matter how the final spending plans shake out, cuts are coming because of a looming $6 billion deficit in future years if lawmakers don't act wisely.
Negotiations have already begun among legislative leaders and Gov. Tim Walz, and key lawmakers in both chambers have received marching orders about the top line numbers they have to work with within their specific budget area.
There are wide gaps, though, between some of the proposals that in the next few weeks, they will have to bridge. For example, the tied House pitches no new money for transportation, while the DFL majority in the Senate is proposing slashing spending by $226 million. Some parts of the budget, by contrast, would see a small funding boost.
But there are steep cuts earmarked for human services in all of the budget blueprints put forward by both chambers and the governor.
"We know the budget implications that are ahead of us," House Speaker Lisa Demuth, R-Cold Spring, told reporters last week before the Legislature paused to observe Easter and Passover back home with their families in their districts.
When lawmakers return on Monday, they will begin debate on budget bills that have been finalized in each chamber. Eventually they will go to conference committees, small panels made up between House and Senate members to sort out any differences.
They must adjourn by May 19.
"We are on a path to get our work done and get a balanced budget for the people of Minnesota," said DFL Senate Majority Leader Erin Murphy.
Republican strategist Amy Koch was the majority leader in the Senate in 2011 when there was a big deficit that she contends was actually much worse because the state was "dead broke" and did not have any emergency funding to tap into when the budget situation was what she described as dire.
At the beginning of that year's session, the projected deficit was also
around $6 billion
, though that was for the budget lawmakers had to plan for in the following two years. Minnesota's estimated shortfall is for the "planning" years in fiscal years 2028 and 2029—the biennium after the upcoming two-year spending cycle.
Right now, the state's reserves exceed $3.1 billion.
"They spent it all because we had a string of deficits, and the reserves were empty. There was a mouse with a piece of cheese in there," Koch said. "So there's been some strengths that they will have that we did not have in dealing with this."
Longtime former DFL Senator Dick Cohen of Saint Paul, who steered the powerful finance committee during other sessions when lawmakers had to pinch pennies, said this Legislature will need to have a particularly close eye on the future budget years—during which the deficit is projected—because of uncertainty clouding federal funding and any cuts Congress may approve.
The Minnesota Constitution mandates a balanced budget, so lawmakers must find a way to erase any gap between revenues and spending.
"I think one of the problems the Legislature is having this year is the 2023 surplus was a very unique surplus. It was in the aftermath of COVID. It was not something that's likely to be seen anytime in the near future, and it never existed in the past," Cohen said in an interview Friday.
Legislative leaders in the last few weeks have conveyed confidence that lawmakers will wrap up all of their work on time. But given the unique circumstances of a tied House this year, Cohen wonders if a special session is inevitable.
"The calendar catches up to you, and over the more recent years, you quite often have had legislative sessions lapse into a short special session," he said. "This year you would think it's tailor made for a lengthier special session."