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Minnesota House debate bogs down on finishing $52B budget

July 1, 2021 GMT
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Minnesota first lady Gwen Walz gets a hug from Secretary of State Steve Simon after Gov. Time Walz, right, handed the signed education budget law to him outside the Capitol in St. Paul, Minn., on Wednesday, June 30, 2021. (Leila Navidi/Star Tribune via AP)
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Minnesota first lady Gwen Walz gets a hug from Secretary of State Steve Simon after Gov. Time Walz, right, handed the signed education budget law to him outside the Capitol in St. Paul, Minn., on Wednesday, June 30, 2021. (Leila Navidi/Star Tribune via AP)

MINNEAPOLIS (AP) — The Minnesota Legislature worked into the early hours Thursday to try to finish off a $52 billion, two-year budget after working into the early hours the night before to pass a bill that ends Gov. Tim Walz’s emergency powers, although a top Republican said the special session could continue for days longer to make sure the governor signed all the bills.

“Trust but verify,” Senate Majority Leader Paul Gazelka, of East Gull Lake, said at a news conference, quoting a proverb that President Ronald Reagan was fond of using in his dealings with Soviet leaders.

Walz laughed at the comment and said Gazelka didn’t need to worry. He spoke to reporters after personally delivering the signed K-12 education funding bill to Secretary of State Steve Simon to make its enactment official, and signed three other budget bills to avert the lingering threat of a partial state government shutdown after the current budget ran out at the end of the day Wednesday.

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The only budget bill still awaiting votes early Thursday was a tax bill that needed approval first in the House, then the Senate. The House debate was late to get going, and bogged down amid a partisan fight over the details of unwinding the governor’s emergency powers.

The emergency powers language was added early Wednesday to a state government and elections budget bill shortly after the Democratic governor said he was ending the state’s peacetime state of emergency himself. Walz had used his special powers for over 15 months to manage the state’s response to the COVID-19 pandemic, which was a long-running sore point for Republican lawmakers who complained he had shut the Legislature out of important spending and policy decisions.

Failure to pass the tax bill wasn’t going to trigger a shutdown, so some of the pressure was off lawmakers.

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“This is a strong, bipartisan tax bill that is going to make Minnesota families, communities and businesses better and stronger into the future, the House tax committee chairman, Democratic Rep. Paul Marquart, of Dilworth, said earlier in the day.

About about 80% of the bill is COVID-19 relief, Marquart said. Businesses that received forgiveness on Paycheck Protection Program loans will be allowed to fully deduct the amount on their state income taxes, while workers who collect unemployment insurance payments will be able to deduct them up to $10,200. He said that will benefit about 500,000 people who lost their jobs with an average $500 tax cut.

The Senate passed the K-12 education bill 65-0 on Wednesday evening and sent it to the governor.

Republican Senate education committee chairman Roger Chamberlain, of Lino Lakes, hailed the bipartisan school funding bill as relying on “money not mandates.” He highlighted how it contains the largest increase in the state’s per-pupil funding formula in 15 years — 2.5% in the first year and 2% in the second, amounting to about $296 per pupil for school districts to spend as they see fit.

“Now that money is theirs to use,” he said. “It’s local control, members.”

Gazelka said it’s still possible that lawmakers could agree in the coming days on a public works borrowing package known as a bonding bill, which would require bipartisan 60% supermajorities in both chambers but is not required to finish the budget. Otherwise, he said, they could pass it during the special session that Walz is expected to call in early September. The aim of that session would be to pass a plan to pay $250 million in bonuses from federal aid to frontline workers who risked their lives in the pandemic,

Walz announced last week that he was going to end the emergency on Aug. 1, but said late Tuesday that he had moved up the date after reaching a deal with the U.S. Department of Agriculture to protect emergency food aid payments to needy Minnesotans under the Supplemental Nutritional Assistance Program.

The governor said language added to the state government bill in the House will give him sufficient power to manage the state’s vaccination program and emergency unemployment benefits, while winding down other remaining elements of the state’s pandemic response. The Legislature met another condition earlier this week when it approved an “off ramp” for the governor’s eviction moratorium, which he had imposed in the early days of the pandemic.

Walz told Minnesota Public Radio that the final budget “looks an awful lot” like the original budget he put out in January and later revised as the state’s projected budget surplus grew. He said a bonding bill would be “icing on the cake.”

Republican leaders claimed credit for forcing the governor’s hand on special powers.

“The governor has held on to these powers far too long and used them far too broadly,” Gazelka said in a statement early Wednesday. “We’ve been clear that we were going to end these powers, so I’m not surprised Walz tried to outmaneuver us — but he does not get to say he let them go. The emergency is over because the Senate and the House said so.”