Minnesota Legislature puts final touches on $72B budget as Democrats celebrate successes

ST. PAUL, Minn. (AP) — The Minnesota Legislature was putting the final touches on a $72 billion state budget Monday 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.

Lawmakers faced an adjournment deadline of midnight on Monday night. Speaking to reporters on Sunday, Democratic Gov. Tim Walz called it “clearly the most successful legislative session” in many Minnesotans’ lifetimes.

Democrats, who control both the House and Senate for the first time in eight years, regularly describe the legislation they’ve passed this session as “transformational,” “historic,” “generational” 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 Monday. She went on to say, “We will continue to do this work not just this year, but next year.”

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.

“We’ve seen Democrats take a hard left turn and really lose track of what’s important to Minnesotans,” Republican Senate Minority Leader Mark Johnson, of East Grand Forks, told reporters Saturday.

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.

“Democrats will be talking about historic tax cuts this year,” said GOP Sen. Bill Weber, of Luverne, the lead Senate Republican on tax issues. “However, the reality is that the majority of Minnesotans who helped create our state’s historic surplus will not receive any financial 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. They settled over the weekend for $300 million to help nursing homes that are struggling with staff shortages and cost pressures stay open.

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 quicky to enshrine the right to abortion and other reproductive health care into Minnesota statutes in January, and followed up with legislation to protect patients from restrictive states who come to Minnesota for abortions. They took a final step Monday when they unveiled the final version of a health and human services budget bill that formally repeals old restrictions on abortion that a judge declared unconstitutional last summer.

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Trisha Ahmed is a corps member for the Associated Press/Report for America Statehouse News Initiative. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on under-covered issues. Follow Trisha Ahmed on Twitter: @TrishaAhmed15

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