Minnesota lawmakers get off to rocky start in budget negotiations

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Minnesota lawmakers are off to a rocky start debating the nearly $50 billion state budget, with both sides attempting to turn up the heat on the other.

Gov. Tim Walz and House Speaker Melissa Hortman, both Democrats, and Republican Senate Majority Leader Paul Gazelka met privately Thursday afternoon to start negotiating how much they were willing to spend over the two-year budget period. Earlier, they applied public pressure to each other over a tax that Minnesotans pay when they see their doctors.

The first sign of a crack came later, when Republican senators announced via email that they wouldn’t attend a Friday afternoon negotiating session over the economic development budget bill. A Democratic and Republican senator both have conflicts in their districts, and House leaders “disrespected” them by scheduling the meeting without consulting them, said state Sen. Eric Pratt, R-Prior Lake.

Speaking to reporters earlier in the day, Hortman said she thought it was important that conference committees meet Friday and over the weekend to start working out their differences – even before Monday’s deadline for the leaders to decide on spending targets.

“We are prepared to come in early and stay late and get this work done for Minnesotans,” the speaker said.

Lawmakers in Minnesota’s divided state Legislature must agree on a series of budget bills, ranging from transportation to health and human services, by May 20 or risk a special session. Thursday morning, Walz held an event with hospital executives to urge lawmakers to keep Minnesota’s 2 percent tax on medical providers, which patients pay when they visit a clinic or doctor’s office. The tax is scheduled to expire this year.

Walz and House Democrats want to keep it, while opening up the state-run MinnesotaCare health insurance program to people regardless of income. Right now, MinnesotaCare has an income cap.

Senate Republicans have dubbed the provider tax a “sick tax” and want to allow it to expire. They have proposed cutting coverage for adults on MinnesotaCare, including dental and vision benefits, something hospital executives say would be devastating.

Stacey Lee, chief executive of Johnson Memorial Health Services in Dawson, said 18 percent of the hospital’s patients are MinnesotaCare recipients. They will no longer be able to afford preventative services, and the hospital will suffer without the revenue, she said.

“It will be devastating to our whole community,” Lee said. “But most importantly, it will be devastating to all those people, all those kids, that need those preventative services before they get really bad.”

Penny Wheeler, chief executive of Allina Health, said she initially opposed the medical provider tax when lawmakers created it in 1992, but now sees it as essential. About 44,000 MinnesotaCare recipients go to Allina, she said.

“Now we see the stories that are in front of us of lives that are improved,” Wheeler told reporters.

But Republicans said hospital executives would be less supportive of the second part of Democrats’ health plan: creating a public option to buy into MinnesotaCare under a new program called OneCare. The state-run insurance offers hospitals lower reimbursement rates than many private plans, Republicans have said.

“I look forward to hearing from our health care system how they’re going to survive on the OneCare rates,” said state Sen. Michelle Benson, R-Ham Lake. “It’s a question I’ve been asking for a very long time and we haven’t gotten public clarity and I haven’t heard the governor answer it.”

The disagreement played out less than 24 hours before the first meeting over the health and human services budget, which is scheduled for Friday.

It’s one of the bigger sticking points with 18 days left in the legislative session, but it’s not the only issue of contention. In the remaining budget bills, there are major disagreements:


The House’s version raises taxes on corporations that move profits to overseas tax shelters and wealthy people who make a lot of money in the stock market. The Senate’s version calls for income tax cuts and a tax break for people and companies that donate to private school scholarship programs.


The House’s version includes a 20-cent per gallon gas tax increase and hikes vehicle registration fees to pay for roads, and raises the seven-county Metro area sales tax to fund transit. The Senate’s version increases fees on hybrid and electric vehicle owners and bans state spending on future light rail lines.

Judiciary/Public safety

The House’s version includes two gun control bills – universal background checks and “red flag” protective orders.

K-12 education

The House’s version spends about $700 million more than the Senate version on per-student funding to school districts.

State government

The House’s version allows felons to vote after leaving prison, strips the Legislature’s power to draw district maps, and – if enough states agree – forces Minnesota to give its electoral votes to the presidential candidate that wins the national popular vote.


The Senate’s version strikes down Minneapolis and St. Paul’s $15 minimum wage. The House’s version creates a paid family and sick time program.

Higher education

The House’s version includes a two-year tuition freeze for in-state students at Minnesota’s public colleges and universities.


The House’s version renames Lake Calhoun as Bde Maka Ska. It also renames pieces of four state parks after former Vice President Walter Mondale.