Minnesota lawmakers miss deadline on tax cuts, spending; special session uncertain

Minnesota lawmakers floundered to the finish line Sunday night, failing to get several major tax and spending bills wrapped up before their 11:59 p.m. deadline.

The next step is Gov. Tim Walz's to make. Walz told reporters at the Capitol after midnight that he plans to call a special session, reversing his previous vow not to call one. Walz said he wants full agreement before calling the special session.

"You don’t get the ball to the one yard line and go home," Walz said. He said he thought the bills were 90 percent agreed to.

Without a special session, lawmakers will leave billions of dollars of budget surplus sitting in the state's coffers. Key legislative Democrats said there should be a special session, while the top Senate Republican said his caucus did not want overtime.

"What is one or two more days going to do? I don’t get why the governor and Democrats want a special session," Senate Majority Leader Jeremy Miller, R-Winona, told reporters. But he didn't close the door, saying "never say never."

The mood was strangely flat in the Capitol. The House was barely in session all day. The House and Senate both held onto ready-for-action bills in their possession because of distrust in the other. Walz was not seen in public until after the session adjourned.

Midafternoon, Miller said he and House Speaker Melissa Hortman were trying to map out a way to pass new spending for public schools. Hortman said she got involved in negotiations over public safety, which did not yield an agreement.

"We need to come back and finish the work," Hortman, DFL-Brooklyn Park, told reporters. She said she wanted a special session before Memorial Day weekend.

Lawmakers on Saturday agreed to a $4 billion tax relief package that calls for the elimination of state taxes on Social Security income, a small income tax rate cut, and an expansion of the renter's credit and an expansion of the renter's credit. But the tax bill won't pass until all spending bills are settled, because they're all part of a larger agreement.

By Sunday, not enough time remained to get the bills written and passed before the midnight deadline -- even if there had been agreements.

Senate DFL Leader Melisa Lopez Franzen called it a "failure of leadership" and said lawmakers must agree before coming back for a special session.

"We cannot process the work at this point (Sunday night). You all know that," Lopez Franzen, DFL-Edina, told reporters. "We’re not going to come here (for a special session) like we’ve done in the past and wait for an agreement. That is just wasteful of our time and taxpayer dollars. So, we have to come with an agreement."

In contrast, House GOP Leader Kurt Daudt said he did not think there should be a special session.

Several bills were not finished: a $1 billion public schools bill, a $1 billion health and human services bill, a $450 million public safety bill, a $850 million transportation bill, and a $1.4 billion public construction bill.

Senate Human Services Chairman Jim Abeler acknowledged Sunday morning that the chances were slim in his issue area. Yet he said the Legislature could be like Rich Strike, the horse that won this year's Kentucky Derby after getting in the field because of a late scratch.

"I'm an optimistic, but it's a long shot," said Senate Human Services Chairman Jim Abeler, R-Anoka, "But I'm going to keep working until there's no chance whatsoever."

The House and Senate agreed to a deal on agriculture, broadband and drought relief Sunday. They sent to Walz's desk a bill that spends $110 million in new money over the next three years on broadband access and $18.4 million to address the 2021 drought and recent bird flu emergencies.

The governor and legislative leaders agreed to a framework last weekend that splits the budget surplus into thirds: $4 billion for tax breaks, $4 billion for new spending, and $4 billion left on the budgetary bottom line in case the economy worsens.

That left scant time for rank-and-file lawmakers to agree to hundreds of policy and spending provisions, but legislative leaders and Walz said it would happen. On Monday, Walz chided reporters for being skeptical and encouraged them to come back a week later to see the final deals.

Walz hasn't wanted to call a special session because it removes the time pressure. Lawmakers can retreat to their own corners, and the negotiating process starts all over again. 

The legislative session ends Monday, but the state constitution says the Legislature can't pass bills on the last day of the two-year session. 

In the Senate, 22 members are scheduled to give retirement speeches on Monday, even though it's unclear whether they'll have additional work in a special session.