Legislative Session Convenes, Senate Leadership Update, and more
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Ewald at the Capitol
Governor’s Bonding Proposal, Budget Update, and More
GOVERNOR’S BONDING PROPOSAL
Gov. Tim Walz has unveiled a $982 million bonding proposal for 2024. The plan, covering a diverse range of projects, allocates nearly half of its funding to preserving existing state infrastructure, including substantial investments in water and transportation systems, public safety, housing, and environmental initiatives. Here’s a quick breakdown of the highlights:
- $440 million for preserving state infrastructure (45%)
- $206 million for University of Minnesota and Minnesota State systems buildings
- $215 million for water and transportation infrastructure (22%)
- $119 million for grants and low-interest loans to replace lead pipes
- $28 million for PFAs removal (perfluoroalkyl and polyfluoroalkyl substances, known as “forever chemicals”)
- $142 million public safety infrastructure (14%)
- $22.4 million for new Minnesota State Patrol Headquarters building
- $97 million for housing infrastructure (10%)
- $16 million for Minneapolis Veterans Home updates
- $85 million for other infrastructure (9%)
- Approximately $40 million is set aside for local government projects
Gov. Walz’s proposal follows last year’s historic $2.6 billion investment package. Amid economic uncertainties, the governor’s bonding proposal for 2024 is prioritizing a smaller list of projects. Requests from state agencies and local units of governments are already totaling $7.6 billion. As Minnesota lawmakers prepare to convene on February 12, debates over the capital investment bill will take center stage. Republican lawmakers have advocated for a smaller capital investment bill compared to this proposal. The DFL-controlled legislature will have to negotiate with Republicans to create a bonding bill that requires a three-fifths majority to pass. Both the House and Senate Capital Investment Committees will also release their bonding proposals.
BUDGET AND REVENUE UPDATE
Minnesota Management and Budget (MMB) found that net general fund receipts for November and December of 2023 were $70 million (1.4%) more than forecast in November. This is attributed to higher-than-anticipated net individual and corporate income tax receipts; net receipts from other tax sources, including sales tax, were below forecast. Specifically, individual income tax receipts were $37 million above the forecast, and corporate receipts were $65 million above the forecast. However, partnership and S corporation payments were $37 million below the forecast. We can expect another forecast update in February, which the Legislature and the governor will use to develop supplemental budget proposals.
LEGISLATIVE RETIREMENTS
As of this week, 13 legislators have announced that they will retire from their legislative careers at the end of the 2024 legislative session. In addition to these announcements, Rep. Kurt Daudt has announced that he will retire before the legislative session begins, effective February 11. State statute requires a special election to be held 35 days after his resignation. Rep. Ruth Richardson also retired in September 2023 and was replaced in a special election in November
Other legislators are seeking a different office this election season, including Rep. Heather Edelson, who is running for Hennepin County Commissioner, District 6, and Sen. Kelly Morrison, who is running for the Third Congressional District (Sen. Morrison is not up for re-election to her senate seat until 2026).
DATES TO REMEMBER
February 12: First day of 2024 legislative session
May 20: Adjournment of the 2024 legislative session
Achieving Legislative Success by Expanding Grassroots Engagement
Without active involvement in the legislative process through advocacy, an association’s profession or industry can experience changes (perhaps unintended) that could put members at a disadvantage.
The Ewald Consulting Government Relations team provides an array of services to help associations achieve their legislative aims. Government Relations Director Valerie Dosland says the team is well-equipped for success. “Each member of our team has previous experience working as legislative staff inside the capitol and provides a broad range of skills to support our clients. Each of us specializes in specific issue areas ranging from early childhood and K-12 education, health and human services, local government, elections, taxes, and transportation.”
Although the pandemic significantly changed the way our team worked, Valerie says everyone adjusted quickly. “Throughout 2021 and 2022 we learned how to lobby in a completely remote and hybrid manner. While this posed challenges, it also provided opportunities for our clients to engage more with legislators. Remote meeting capabilities allowed for more of our clients to participate in one-on-one meetings with legislators and attend and participate in legislative committee hearings—regardless of location. This has continued beyond the pandemic.”
And as government relations strategies continue to evolve, Ewald Consulting’s team remains vigilant to adapt and support its clients from a position of strength. “We have greatly expanded our capabilities to provide effective grassroots engagement strategies for our clients,” Valerie continues. “This includes bringing on grassroots advocacy software to make it easier for our clients to engage in the legislative process.” In the most recent legislative session, associations that leveraged grassroots advocacy tools to augment their impact saw engagement from members at higher levels than ever before.
Learn how your organization can use grassroots advocacy tools – give us a call!
Testimonial
“The Minnesota Association of School Administrators began using the advocacy system during the 2022 legislative session and we could not be more pleased. This tool made it very easy for our members to engage in advocacy and because of that, we were successful on several of our issues.” – Deb Henton, Executive Director, MASA
Budget Update, Special Election Results, and More
BUDGET UPDATE
Minnesota Management and Budget officials, including Commissioner Erin Campbell, State Economist Dr. Laura Kalambokidis, and State Budget Director Ahna Minge, presented the State’s November 2023 Budget and Economic Forecast on Dec. 6. Governor Walz, House Speaker Melissa Hortman and Senate Majority Leader Kari Dziedzic provided insights and addressed reporters’ questions. The state’s current biennium indicates stability in the budget and economic outlook, with a projected surplus of $2.4 billion for FY 2024-25. The surplus is $808 million above what was estimated at the end of the 2023 legislative session, driven by increased consumer spending and corporate profit growth. Much of this projected surplus is expected to be one-time money (as opposed to ongoing spending).
While recent revenue updates show a positive trajectory, concerns arise for FY 2026-27 due to increased spending in health and human services and education. Commissioner Campbell expressed optimism in the short term, but House Speaker Hortman highlighted the need for bipartisan cooperation for a capital investment bill, hinting at a potential bonding bill of $1.7 billion with GOP support or $800 million if pursued solely by Democrats.
SPECIAL ELECTION RESULTS
In a closely watched Minnesota House special election for District 52B, Democrat Bianca Virnig secured 58 percent of the vote, defeating Republican Cynthia Lonnquist with 40 percent of the vote. Virnig, a member of the Rosemount-Apple Valley-Eagan school board, will now fill the seat vacated by former DFL Representative Ruth Richardson. The election will not alter control of the chamber, yet it attracted attention for its significance as a rehearsal for messaging strategies leading up to next fall’s elections.
STATE OFFICE BUILDING RENOVATION
Renovation and expansion of the Minnesota State Office Building (SOB) has started. The first phase will include closure of the tunnel between the SOB and the Capitol building, as well as the closure of the north entrance into the building. The SOB will be closed completely for interior renovation of the building after the 2024 legislative session wraps up.
The project will add 166,000 square feet to the building, aiming to increase meeting space and accessibility for the public. The cost of the project will total $730 million with interest on bonds.
DATES TO REMEMBER
February 12: First day of 2024 legislative session
May 20: Adjournment of the 2024 legislative session
Minnesota Budget Surplus Continues, Minnesota State Flag, and More
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Minnesota Legislature Ends on Time with Completed Budget, Bonding Agreement Reached, and more
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Waning Days of Legislative Session, Tax Agreement Reached, and more
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Conference Committee Update, April Budget Update, and More
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Conference Committee Update, House Passes Paid Family and Medical LeaveConference Committee Update, and more
Conference Committee Update
With two weeks left in the 2023 legislative session, many conference committees have been busy working out differences in major budget bills. A few conference committees, such as the committee working on the omnibus tax bill, are still in the process of being appointed and have not yet begun work.
Conference committees must resolve all differences in their bills before sending them to Gov. Walz for final passage. Here is a list of bills that have been referred to conference committees, with links to the latest updates for those committees:
- HF100/SF73 – Omnibus cannabis bill.
- HF1830/SF1426 – Omnibus state government finance bill.
- HF1937/SF2247 – Omnibus veterans and military affairs finance bill.
- HF1938/SF1811 – Omnibus tax bill.
- HF1999/SF1682 – Omnibus legacy bill.
- HF2073/SF2075 – Omnibus higher education finance and policy bill.
- HF2292/SF2373 – Early learning scholarships, Head Start, and early education programs modified; early childhood educator programs provided; reports required; and money appropriated.
- HF2310/SF2438 – Omnibus environment, natural resources, climate, and energy finance and policy bill.
- HF2335/SF2566 – Omnibus housing finance and policy bill.
- HF2497/SF2684 – Omnibus education finance bill.
- HF2887/SF3157 – Omnibus transportation finance and policy bill.
- SF1384/HF1522 – Omnibus Labor policy bill
- SF1955/HF2278 – Omnibus Agriculture, Broadband and Rural Development appropriations
- SF2744/HF2680 – Omnibus Commerce appropriations
- SF2909/HF2890 – Omnibus Judiciary and Public Safety appropriations
- SF2934/HF2847 – Omnibus Human Services appropriations
- SF2995/HF2930 – Omnibus Health and Human Services appropriations
- SF3035/HF3028 – Omnibus Jobs, Economic Development, Labor, and Industry appropriations
House Passes Paid Family and Medical Leave
The House passed their paid family and medical leave bill on Tuesday evening with a vote of 68-64. The bill passed on a mostly party-line vote, with two Democrats voting against the bill. The bill sets aside $668.3 million to set up the program for FY2024, before money is collected via a payroll tax on employees and employers, similar to Social Security benefits. The money also establishes a new Family and Medical Benefits Insurance Division within the Department of Employment and Economic Development to oversee the program.
Starting July 1, 2025, employees would be eligible for the benefit if they are unable to work due to a serious health condition, safety leave, pregnancy, pregnancy recovery, or to care for a family member’s serious health condition, or a newborn. Employers would be able to opt out of paying into the state plan if they create their own private plan that meets or exceeds the same benefits. The House version of the bill would provide up to 18 weeks of partially paid leave, less than the 24 weeks initially proposed. The bill now goes to the Senate, which has yet to act on it.
Marijuana Legalization Bills Head to Conference Committee
After months of committee hearings, a bill to legalize marijuana passed both the House and the Senate last week. The bill first passed the House on Tuesday with the support of two Republicans, and all but one Democrat, with a vote of 71-59. On Friday, the Senate passed the bill with a party line vote of 34-33. The measure would allow adults 21 and older to buy up to two ounces of cannabis flower and would expunge low-level cannabis convictions.
The two versions of the bill have several differences that must be worked out by a conference committee before it makes its way to Gov. Walz’s desk for signature. The Senate bill allows those growing cannabis privately to possess up to five pounds of cannabis, and two pounds for those buying cannabis. The House limits possession to 1.5 pounds for everyone. Another key difference is the tax rate in the two bills, the House taxes cannabis products at 8 percent, while the Senate has a higher rate of 10 percent. The differences between the two bills are currently being worked out in a conference committee. Once differences are worked out and a bill is signed by the governor, legalization will go into effect August 1.
University of Minnesota Regents Election
The House and Senate met in a joint convention on Monday night to elect members of the University of Minnesota’s Board of Regents. Four board members were up for election from the 2nd, 3rd and 8th Congressional Districts as well as the at-large member.
Tadd Johnson, representing District 8, was the only member re-elected to his seat; the former professor, tribal attorney and tribal court judge retired from his position as the University’s first senior director of American Indian Tribal Nations Relations. West St. Paul City Council member Robyn Gulley was elected to the District 2 seat, replacing Steve Sviggum. In District 3, Minnesota Nurses Association President Mary Turner will replace Darrin Rosha. One of the four members-at-large, Ken Powell, will be replaced by Penny Wheeler, the former CEO of Allina Health.
The new board will get to work this week to review candidates for interim president as the current president Joan Gabel takes on a new role at the University of Pittsburgh.
Dates to Remember
May 22: Last Day of the 2023 Legislative Session
Legislature Returns from Break, Omnibus Bills Breakdown, and more
Legislature Returns from Break
The legislature returned from its week-long break, with six weeks left in the legislative session. They must complete their two-year budget by the adjournment date of May 22. Committees in the House and Senate have been advancing their omnibus budget bills and some budget bills have begun to be debated by the full House and Senate.
Once the budget bills pass off the House and Senate floors, the conference committee process will begin.
Omnibus Bills Breakdown
A few committees that had yet to act upon their omnibus bills met after the break to pass their budget bills. After these bills pass in their respective bodies, the conference committee process will begin, which is the process the House and Senate use to work out differences. The Tax committees have not yet released their omnibus bills.
Here are a few highlights on budget bills advancing after the legislative break.
Transportation
- The bills include increases in car tabs fees, motor vehicle sales tax rates and a sales tax increase of .75 percent in the Twin Cities Metro area to raise $1 billion each year.
- The House proposal also includes a 75 cent package delivery fee, but the Senate has not expressed support for this provision, so it is unlikely to be included in the final bill.
Taxes
- Tax omnibus bills have not yet been released.
- Senate DFL says the full elimination of the state tax on Social Security benefits will be part of their plan.
- House DFL prefers a smaller reduction to the Social Security tax.
Bonding
- Bonding requires a 60 percent supermajority to pass.
- House Republicans supported a $2.3 billion bonding package earlier in session, which failed to get the necessary votes in the Senate.
- Senate Republicans have pledged they are only willing to pass a bonding bill in exchange for the full elimination of the state tax on Social Security benefits.
- The House and Senate DFL majorities may pass the bonding bill using state aid if there is not a compromise. A bill funded with state aid does not need a 60 percent majority to pass.
Energy
- $255 million for climate and energy committees to spend in the next two years. Incentives for electric vehicles, school buses, and home heat pumps.
- The House and Senate still need to sort out differences on energy storage requirements for electric utilities.
Housing
- $1 billion in mostly one-time funding for public housing, affordable housing, rental assistance, and investments in naturally occurring affordable housing.
Agriculture and Rural Broadband
- $100 million to fund new high-speed internet infrastructure in rural areas.
- $50 million from state bond proceeds for the Rural Finance Authority.
Child Care
- The House Children and Families’ committee bill is split into two parts to pair up with the Senate Education Committee and the Senate’s Health and Human Services bill.
- $370 million to increase the reimbursement rate for the Child Care Assistance Program.
- Funding to increase the pay of child care workers.
- Expanding Early Learning Scholarships.
Local Government Aid
- The House passed a bill to allocate $100 million for Local Government Aid and County Program Aid.
- The Senate has not released a plan yet.
Still in Progress
Other top priorities continue to make their way through the committee process:
Recreational Marijuana
- Bills to legalize recreational marijuana have cleared more than 20 committees in the House and Senate
- These are stand-alone bills, not part of other omnibus bills
- The tax rates and license fees (around $100 million a year) will not raise general fund revenue, but instead will cover program costs
Paid Medical and Family Leave
- A proposal to create an insurance program for workers’ sick time and leave to care for newborn children or family members, allocating $668 million from the surplus to get the program running by 2025.
Resources
Who represents me?
Governor’s bill tracker
Senate Omnibus and Policy Bills
Governor and Legislature’s Budget Target Agreement
Dates to Remember
April 19: State of the State address
May 22: Last Day of the 2023 Legislative Session