ST. PAUL — The Minnesota Legislature reconvenes for the homestretch of the 2019 session on Tuesday, with no agreements yet on any of the big issues involving taxes and spending, while the deadline looms just four weeks away.
Nevertheless, Democratic Gov. Tim Walz and legislative leaders from both parties say there’s still plenty of time to finish the main job of the session by May 20 — passing a two-year budget likely to be somewhere between the $47.6 billion Senate Republicans have proposed and the $49.4 billion Walz proposed.
The fundamental challenge is that while the governor and the Democratic-controlled House are closely aligned, Republicans who control the Senate firmly oppose raising taxes while the state has a projected $1 billion surplus . The partisan split also shows up on spending. All three sides have to agree, so expect some difficult negotiations.
Here’s a look at where some of the major issues stand after the Easter/Passover break:
Walz supports raising the gas tax by 20 cents per gallon to create a bigger dedicated revenue stream for road and bridge improvements. House Democrats back him but want to phase it in slower. Either way, it’s a 70% increase. Senate Republicans say the surplus leaves plenty of money without raising taxes.
Senate Republicans have also balked at Democratic proposals to raise a variety of other taxes and fees by $1.2 billion to allow for more spending on education and tax cuts for most individuals. Democrats are targeting corporate money stashed in tax havens overseas. Senate Republicans plan to unveil their main tax bill soon.
There’s been no meeting of the minds either on the state’s 2% tax on health care providers, which helps fund health programs including Medicaid and MinnesotaCare. The tax expires at the end of the year. Democrats say failing to extend it will blow a $700 million annual hole in the budget. Republicans say it makes health care more expensive and that it should lapse on schedule.
Also expiring is a reinsurance program that holds down premium increases for Minnesotans who buy health insurance on the individual market. Republicans say it’s a big success that has kept premiums 20% lower than they would have been, and that federal money would cover the costs of extending it.
But Walz and House Democrats say it’s a giveaway to insurance companies and a one-time “band aid” that requires a more permanent solution. They would cut out industry middlemen and give Minnesotans who get insurance through the state-run MNsure exchange a 20% subsidy instead.
Education is the biggest component of the budget. House Democrats want to increase per-pupil state funding by 3% in the first year and 2% in the second. Senate Republicans propose just a half-point each year. House Democrats also want to freeze tuition at public colleges and universities, while Senate Republicans would hold tuition to the inflation rate. Altogether the two sides are around $1 billion apart.
Two main gun control proposals have been in play. One would require background checks on most gun transfers. A “red flag” bill would allow for temporary confiscation of guns from people deemed an imminent threat to themselves or others.
House Democrats have included both in a larger public safety budget bill in hopes of forcing the Senate to accept them. But Senate Majority Leader Paul Gazelka has said gun control is dead for the session unless they drop that tactic. He has offered committee hearings on the two proposals if the House passes them first as standalone bills, but the committee probably would kill them.
The biggest bipartisan success so far is a bill requiring motorists to use hands-free devices when phoning on the road starting Aug. 1. Walz signed it after years of campaigning by citizen-activists who lost loved ones to distracted-driving crashes.
But separate legislation to stiffen existing penalties for texting while driving may have to wait for next year. The Senate-passed bill also treats drivers who kill or injure someone while texting or talking non-hands-free like drunken drivers, with felony sentences. Some House members have qualms about such high penalties.
Unlocking $6.6 million in federal funds to beef up security for Minnesota’s Statewide Voter Registration System was supposed to be one of the early bipartisan wins of the session. It wasn’t. Democratic Secretary of State Steve Simon still needs authorization so his office can begin the software updates. He says he still hasn’t been able to get a good answer on why Senate Republicans won’t give it. They’ve made only vague statements about oversight.
While there’s speculation that it’s a Republican bargaining chip, Simon says he hasn’t been able to find out what they might want for it. Competing House and Senate bills are stuck in a conference committee. House Democrats have put the authorization in their broad state government finance bill to try to force the issue.
The House and Senate are taking different approaches to making prescription drugs more affordable. House Democrats want to take on the pharmaceutical industry by reining in insulin prices, prevent price gouging on other drugs and increase price transparency. Senate Republicans are taking a broader approach. The GOP bills include one for greater oversight over pharmacy benefit managers, the middlemen that are supposed to use their purchasing clout to hold down drug expenses.
Agreement seems closer on holding drug manufacturers responsible for Minnesota’s growing costs for dealing with the opioid crisis. Bills have passed both chambers to hike fees for pharmaceutical manufacturers and drug wholesalers that sell or distribute opioids in the state. The differences are still being negotiated.
Legalizing recreational marijuana isn’t going to happen in Minnesota this session, even as recreational cannabis makes new inroads into the mainstream elsewhere. A Senate committee last month voted to kill a legalization bill, and the issue never got much traction in the House either. Maybe next year.