REGIONAL- Minnesota’s 2023 legislative session began with the state flush with $17.5 billion of extra cash and the DFL in control of the Senate, the House, and the governorship, a recipe ripe for big accomplishments.
But as the Legislature moves into its final weeks, much work still remains. A narrow one-vote DFL majority in the Senate has meant that some priorities have had to be scaled back and created extra work to bring party members in line with party goals, such as legalizing recreational marijuana. And there are divisions on how to proceed on some issues between DFLers in the Senate and the House. There have been wins along the way, like allocating $200 million to provide free school meals for all and cementing the right to an abortion in state law, but there’s still plenty of work ahead as the chambers begin deliberations on large omnibus budget bills.
And while the Legislature has all that extra money to allocate, there are numerous items woven into proposals to bring more money into state coffers.
Budget and taxes
As legislators have developed plans for the $17.5 billion surplus, they have focused on large increases in funding for public education, housing, social services, as well as targeted tax cuts, with a focus on extra dependent credits for low-to-middle income families, particularly those with young children. Gov. Tim Walz also continues to push for tax rebate checks. Another tax cut favored by many lawmakers, including some DFL legislators like District 7B Rep. Dave Lislegard, of Aurora, and District 3 Sen. Grant Hauschild, DFL of Hermantown, is reducing or eliminating the tax on Social Security benefits. Walz and legislative leaders don’t support a full repeal of the Social Security tax, but a number of DFL lawmakers and most Republicans back full repeal. Meanwhile, hikes in taxes and fees are also part of DFL transportation and housing proposals, and a new proposed payroll tax would pay for a paid family and medical leave program.
Bonding
The Legislature failed to pass a bonding bill for capital improvements last session, and they may not pass one this session as Republicans in the Senate have organized to block it. Using a bonding bill to borrow money for improvements to things like roads, bridges, and wastewater infrastructure requires a two-thirds vote for passage, and Senate Republicans have already torpedoed a bonding proposal because they first want elimination of a state tax on Social Security benefits. The DFL has pledged to put $2.3 billion in cash toward a package of construction projects, but gaining agreement on a bonding bill, still a possibility, would allow that money to be used for other purposes.
Gun safety
Gov. Tim Walz’s hopes of advancing a more aggressive gun control agenda that would have included magazine capacity limits and restrictions on semiautomatic rifle sales to anyone under 21 have all but fizzled out, as some limitations are controversial even within his own party. But one bill that could be green-lighted is a “red flag” law that would allow a judge to seize firearms from someone deemed a threat to themselves or others. Another gun control measure still alive would extend background checks to private gun sales. A Senate measure also proposes increased penalties for machine gun possession. Sen. Hauschild has been viewed as a potential swing vote for gun control measures in that chamber.
Transportation
Meanwhile, Minnesotans will see an increase in the price of their car tabs, a motor vehicle sales tax increase, and a new retail delivery fee of 75 cents per package on deliveries made by companies like Amazon and Door Dash if transportation proposals by the DFL are enacted. The increases would help to fund the largest increase in revenue for roads, bridges and transit in 15 years. The new financing measures are intended to make up for declines in money received through gas taxes, motor vehicle excise taxes and tab fees.
Broadband
A proposed allocation of $100 million for high-speed broadband infrastructure in rural areas could help to alleviate gaps in service in the North County. Potential future FCC commitments to broadband in Minnesota could total almost $1 billion.
Housing
A total of $1 billion is being funneled into a number of housing initiatives, primarily from the surplus. Money will go toward bonds to partner with affordable housing providers for new units, investments in maintenance of affordable housing that is not part of public programs, expanded rental and down-payment assistance, and bonds to renovate existing public housing.
Green energy
An unusually large budget of about $300 million is being targeted at climate and energy issues. Much of the money will go to support rebates, tax incentives and grants for climate-friendly technology, such as heat pumps, solar panels, etc. The Legislature already passed and Gov. Walz has signed a bill accelerating the total phaseout of carbon-generating electricity by ten years to 2040, but policy differences remain to be ironed out, including the possible study of nuclear energy in the transition and energy storage requirements for electric utilities.
Paid family and medical leave
A DFL initiative denied in the past by Senate Republicans has new life this session as a plan for a paid family and medical leave insurance program has sailed through both houses. Leave would be available for workers when they become sick, injured, or give birth, and also for caring for a sick or injured loved one or a newborn. The program would start in July 2025 with an infusion of $688 million from the budget surplus, with ongoing costs to be supported by a new payroll tax.
Childcare
Gov. Walz made services for children a major focus of his initial budget proposal, and the Legislature has followed through with a pledge of $370 million over the next four years to increase the reimbursement rate for the Child Care Assistance Program, a subsidy for low-income families to make childcare affordable. Additional investments in the hundreds of millions are anticipated for pay subsidies for childcare workers and Early Learning Scholarships. New tax credits for childcare could also be approved.
Sports betting
Bills to legalize wagering on college and professional sports that had the support of the state’s tribal nations and professional sports teams appear to be facing an uncertain future after initial committee hearings. All of the wagering would go through tribes that already have casinos. Gambling on-site would not be assessed state taxes, but online or mobile bets through contracted national sports books would be taxed. Supporters are concerned about getting the necessary votes for passage in the Senate.
Local government aid and county program aid
House DFLers included $100 million in a budget plan for each of two state subsidies to help city and county governments with basic costs and help limit property tax increases. Local officials say Local Government Aid — which primarily benefits cities in Greater Minnesota — and County Program Aid have not kept up with inflation and have asked for more money. The Senate has not released its plan yet, but Gov. Walz supports a boost and so the aid programs are likely to get extra money.
Fentanyl penalties
Lawmakers on both sides of the aisle appeared to have reached a deal last month on a proposal that would increase penalties for fentanyl possession to align with heroin. The bill would add threshold numbers for pills, making it easier for law enforcement and prosecutors to put away distributors.
The bill — authored by a GOP member in the House and its companion in the Senate by a DFL member — was heard in the public safety committees of both chambers. The bills are included in both the House and Senate public safety omnibus packages, but GOP Rep. Dave Baker hopes the proposal can be peeled off into a standalone bill and acted on sooner.
No-knock search warrants
A proposal to ban no-knock search warrants is making its way through the Legislature after years of failed attempts by DFL lawmakers to outlaw the controversial tactic. The use of the warrants declined sharply after the death of Amir Locke at the hands of a Minneapolis SWAT team last year, but racial disparities persist. The proposal to ban no-knocks is part of a public safety omnibus bill released by DFLers in the House but is not included in a corresponding public safety plan in the Senate.
Additional bills already passed and signed by Gov. Walz include:
• A bill to smooth the end of special Medicaid rules imposed by the federal government during the pandemic. In return for increased federal payments, the states could not remove anyone from the program as long as the public health emergency was in effect. But that emergency is ending and states must now not only start checking new applicants for eligibility but go back and make sure all 1.5 million Minnesotans on the program still meet income requirements. Some estimates are that between 100,000 and 300,000 residents could lose coverage. The bill pays for the staffing needed to review all those clients but also to provide money for MinnesotaCare to provide a place for those who lose Medicaid to find new plans.
• A bill to restore voting rights for most people convicted of crimes but who are no longer in prison or jail. Before the bill passed, formerly incarcerated people had to wait until all probation and parole was completed. The law could impact around 50,000 people.
• A bill lifting a 20-year ban on undocumented immigrants from receiving driver’s licenses will go into effect on Oct. 1. The measure was supported by law enforcement as a way to improve public safety by ensuring these drivers demonstrate knowledge of traffic laws and driver skills.
MINNPost contributed to this story.