Walz, DFL lawmakers reach agreement on budget framework, with room for 'nice-sized checks'

The governor has pitched giving part of the surplus back to Minnesotans in direct payments.

a light-skinned man in suit and tie stands at podium, flanked by light-skinned woman in blue suit and dark-skinned man in blue suit; others stand behind them
Minnesota Gov. Tim Walz, along with House Speaker Melissa Hortman, left, and Senate President Bobby Joe Champion, address reporters Tuesday, March 21, on their budget target agreements.
Alex Derosier / Forum News Service

ST. PAUL — Gov. Tim Walz and Democratic-Farmer-Labor legislative leaders have arrived at a framework for the state budget over the next two years: $17.9 billion on top of the more than $50 billion base budget.

DFL elected leaders on Tuesday, March 21, announced that they reached an agreement that includes $2.2 billion in additional funding for K-12 education, $2.3 billion for infrastructure projects and more than $3 billion for tax cuts and credits. The record surplus, more than $17 billion, will be used to support the spending and tax cuts.

Typically, Minnesota government control is divided between Democrats and Republicans, meaning deals don’t often emerge until much later in the legislative session. But with the DFL now in complete control of state government, they’ve been moving at a feverish pace on their priorities.

“As I said on Jan. 3 in the inaugural address, the era of gridlock is over,” said Walz, standing with House Speaker Melissa Hortman and Senate President Bobby Joe Champion at the governor's reception room at the Capitol. “This agreement moves us one step closer to ending childhood poverty. It invests in our families, it invests in workforce, it invests in infrastructure, roads and bridges.”

Work on the targets started in November immediately after the election, leaders said.


“Too often you have seen in the past that the leaders take a really long time to get a budget target to the chairs and to the members of the Legislature,” said Hortman at a press briefing announcing the framework. “The reason why we have an early joint target to announce today is because Minnesotans voted for Democratic leadership.”

Walz has been pitching direct payments to Minnesotans in checks of $1,000 for individuals and $2,000 per couple, something Republicans now also support after some initially called it an election-year gimmick. Hortman said there’s room in the framework for “nice-sized checks.” The proposal, however, sets less aside for tax cuts than Walz’s original budget recommendations.

This agreement moves us one step closer to ending childhood poverty. It invests in our families, it invests in workforce it invests in infrastructure, roads and bridges.
Gov. Tim Walz

The governor and lawmakers’ joint targets do not get into specific appropriations in each category, and committee chairs for areas ranging from education to agriculture to public safety will have to work with the goals while working with members on crafting budgets.

Some of the other targets include:

  • $1 billion for housing
  • $668 million for a new paid family and medical leave program
  • $650 million for higher education
  • $650 million for public safety
  • $240 million to replace lead lines

Another big part of the framework is about $2.3 billion for capital projects and debt service. Senate Republicans last week already blocked a $1.5 billion public infrastructure borrowing bill, making good on their promise to do so unless Democrats first acted on tax-cut proposals.

Republicans are in the minority, but the borrowing bills, or bonding bills, need a three-fifths majority to pass, meaning they can still block that type of legislation. In the Senate, they blocked the bonding bill after Democrats declined to act first on eliminating the Social Security income tax.

While the bonding bill has been tabled and can be brought back later in the session, it appears Democrats are now moving forward on what Hortman a few weeks ago called the “with or without you” version of infrastructure funding. If Democrats use cash to pay for projects instead of borrowing, they can pass bills with a simple majority and won't need Republican help.

Republicans decried the DFL governor and legislative leaders’ budget agreement as reckless overspending that doesn’t do enough to provide tax cuts. In a statement, Senate Minority Leader Mark Johnson said the $3 billion set aside for tax cuts wouldn’t provide enough room for Democrats who also support the policy of ending the Social Security tax. He said the proposed amount for tax cuts was "paltry" considering the more than $17 billion state budget surplus.


“Today's targets remind me of a runaway train putting Minnesotan’s livelihoods at risk,” said Johnson. “Democrats' massive spending increases are on new bureaucracies, includes tax increases on every worker and business, and robs dedicated funds to help pay for an enormous expansion of state government.”

Lawmakers have to pass a budget this year or risk a government shutdown. The legislative session ends May 22, and the current biennial budget runs through the end of June.

Follow Alex Derosier on Twitter @xanderosier or email .

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Alex Derosier covers Minnesota breaking news and state government for Forum News Service.
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