Special session talks flame out, Minnesota's surplus will sit unused

Several billion dollars of Minnesota's state budget surplus will likely sit until next year after negotiations over a special session broke apart this week.

The blame game between the two parties started immediately, while interest groups criticized lawmakers for failing to reach a deal. What didn't get done will be fodder for the campaign trail heading into the November election, when all 201 legislative seats and the governor's office are up for grabs.

Republicans said there wasn't a path forward after five months of discussions, while DFL Gov. Tim Walz and House Speaker Melissa Hortman blamed the GOP for walking away from talks, leaving what Walz described as "an impasse."

"This one is deeply disappointing because it feels like we were negotiating with ourselves over these last few weeks," Walz said at a hastily scheduled news conference in the state Capitol on Thursday evening.

Minutes later, a spokeswoman for Senate Republicans sent out an emailed response from Senate Majority Leader Jeremy Miller, who has not been available to reporters for weeks.

"After four months of session and four more weeks of discussions, the differences could not be resolved," said Miller, R-Winona.

In the last week of session, Walz and top lawmakers agreed to a grand bargain for the state's record-breaking budget surplus: $4 billion in tax cuts, $4 billion in new spending, and $4 billion left on the budgetary bottom line. Walz dismissed reporters' questions when asked if it had a chance to pass, even though few details had been worked out.

Lawmakers never appeared close to a deal, either on the session's final weekend or since. Hortman said Miller viewed the grand bargain as having expired when the session ended, leaving the two sides further apart.

The breakup means the state will continue taxing Social Security income for higher-earning recipients. Schools and police departments will not get additional funding. There will be no additional money for hiring bonuses for police officers or nursing home staffers. And Minnesota will not have money for all planned road and bridge projects while providing the state match for construction funded through the 2021 federal infrastructure law.