A whole lot of nothing: A divided Minnesota Legislature can’t find a way to spend a record surplus

22 June 2022

For Gov. Tim Walz and the leaders of the partisan caucuses, it’s come down to this: a 2022 campaign in which they can talk about all the things the 2022 Legislature didn’t get passed.

A record tax cut? No.

The elimination of state taxes on social security income? Sorry, no.

Walz Checks? A billion dollars in increased education funding. Yeah, no.

A plan to spend billions in federal money for roads, bridges, waterworks and transit? Close, but no.

Increased funding from a record revenue surplus for schools, public safety investments, staffing for long-term care facilities. Not close at all.

A capital construction bonding bill for the first time since 2020? Again, no.

With all 201 seats in the Legislature and all four constitutional offices on the ballot, much of the campaign rhetoric related to this session will be on the things one side wanted to pass but the other side blocked. It could well consist of a recitation of non-accomplishments.

Whether there was ever a chance of a special session isn’t clear. Walz himself had tried to build pressure on the House and Senate to finish work on budget bills by saying there would be no special session.

“Get your work done,” he said more than once.

Then, when the bipartisan framework for resolution of spending priorities was announced with just seven days left in the session, Walz teased reporters who wondered whether it was possible politically to agree on the details and technically to draft the bills.

“I know it’s your job to be skeptical,” he said with legislative leaders at his side. “It’s the air that you breathe on this.” But his predictions of coming deals on an unemployment insurance fix and bonus checks for frontline workers had been met with doubts, yet those happened, he reminded.

Only then did Walz say perhaps that a special session he said wasn’t going to happen might be needed to wrap things up. That deal, signed by Walz, DFL House Speaker Melissa Hortman and Republican Senate Majority Leader Jeremy Miller covered three years worth of spending and split $12 billion in expected surpluses into three equal parts for new spending, tax cuts and savings.

The tax cut agreement was reached but was held in reserve until the spending bills were ready. They weren’t. Once the regular session ended, committee chairs held informal negotiations but none of the deals that seemed close in May got significantly closer in June.

Last Thursday when a meeting among Walz, Hortman and Miller ended, the governor declared that special session talks were at an impasse. Walz’s public optimism slipped, describing himself as “deeply disappointed.”

Hortman said last week it became clear talks had ended when Miller informed them the signed May 16 agreement was only good through the regular session’s end on May 23. But it was probably evident throughout the post-session period. During that time, the Senate GOP presented no counteroffers to DFL offers during the four closed-door meetings since adjournment, she said.

While Miller said nothing about such a “use-by” date on his signature when the deal was announced, and such an expiration date would have run counter to past deals by previous majority leaders, he did say several times in the closing hours of the regular session that his caucus wasn’t interested in a special session.

Miller’s post-collapse statement focused on the tax cuts the GOP had proposed, saying DFL spending priorities didn’t match the state’s. But global deals are global because all sides get what they want. Suggesting the tax cuts would or should pass without the spending goes against the point of such deals.

There were successes during the four months of session. More than aforementioned skeptics might have predicted in an election year. But it might be difficult to craft a statewide political campaign around the craft beer “growler bill,” health care reinsurance, refilling the unemployment fund and awarding hero checks.

Woulda, coulda, shoulda has become the theme.

On Sunday, Walz used a morning television interview to repeat what he’d proposed the week before, that he now favored giving the bulk of the tax-cut set-aside in even-larger checks to families – now $2,000 per family instead of the $350 he started with in January and the $1,000 he proposed when the surplus grew even larger in February. Walz was set to tout the idea again, and a one-day special session to do nothing but that, on Wednesday.

Checks never caught fire in the Legislature, neither among House DFLers or Senate Republicans, and may have been dead among Republicans when he labeled them “Walz Checks” in an election year. But it can’t hurt an incumbent governor to say he wanted to give all adults cash and the GOP blocked it, especially with Democrats, fairly or not, getting hit hard over inflation, especially in gas prices. 

The budget deal had already been politicized before the regular session ended when GOP endorsed candidate Scott Jensen said Republicans should pass it up. Wait ‘til next year, he said. At the time, Miller said he hadn’t heard that and hadn’t heard a groundswell from his constituents.

 “We think the framework of the agreement that we put forward accomplishes that,” Miller said. “If we can get permanent ongoing tax relief for the people of Minnesota, that’s a great thing for the people.”

But Walz said he sensed during closed-door talks that the GOP had cooled to the agreement, dubbing it buyer’s remorse, and cited contested GOP primaries as a reason incumbents didn’t want a special session to close the deal.

After he declared an impasse, Walz’s campaign blamed Jensen for the failure. “It’s shameful that Scott Jensen undermined that agreement. Minnesotans were asking their leaders to compromise to help working families, but Scott Jensen chose partisan politics instead,” said Walz.

And after Walz touted his new and improved rebate check plan, Jensen said Walz should in fact call a one-day special session and see if even his fellow DFLers would support it.

“The reality is that the only individual who has the power to call a special session is Gov. Walz and he can do so today,” Jensen said. “So, I encourage him to honor his word, prove this isn’t election year politicking, and give back all of the state surplus to those Minnesota taxpayers who created it.”

Everything is linked until it isn’t

Lawmakers like to complain when one side links a seemingly unrelated bill to another, as in “we won’t pass that until you pass this.” What did unemployment insurance fixes, heroes checks and emergency funding for COVID-19 response have to do with each other, other than that both sides wanted one or the other?

What was meant to be a celebration was also an indictment of the legislative process of late. Lawmakers of both parties along with veterans organizations stood with the Capitol as a backdrop to commemorate the signing of  a veteran’s services omnibus bill. The bill that passed nearly unanimously contained funding for bonuses for post 9/11 veterans or their survivors, support to fight homelessness among veterans and money for veterans cemeteries.

But had it not been uncoupled from a huge omnibus bill that also contained state government pensions and transportation legislation it might have suffered the same fate as those broad areas of the budget.

But veterans groups urged the Legislature to pull it out and pass it separately. Walz said he hopes it is a precedent.

Lawmakers of both parties along with veterans organizations stood with the Capitol as a backdrop to commemorate the signing of  a veteran’s services omnibus bill.

“We will never trade a good policy on veterans issues for another issue,” Walz pledged. “We will never put you in last-minute negotiations, we will simply move the policies, debate the policies and fund the policies that have the greatest impact on veterans and their families.”

Stating it that way raises the question of why does that make sense for veterans and not for equally vital areas of government like education, long-term care and public safety?

With a special session unlikely, the 2022 election will determine the outcome of the largest surplus – by both dollar amount and percentage of the budget – in state history. Barring a so-far not-yet forecasted recession, the next governor and the next Legislature will have a surplus of $12 billion on a base two-year state budget of $52 billion.

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