Where things stand with just over 48 hours left of the Minnesota legislative session

With just over 48 hours prior to the Legislature’s mandatory adjournment midnight Monday, lawmakers are still struggling to resolve a few key issues as they aim for a two-year budget to fund everything from roads to schools, parks, health and social services.

Several large budget bills have yet to be negotiated between the 67-67 divided House and the Democratic-controlled Senate — health and human services, education, a potential infrastructure package and a tax bill — i.e., the most complex and contentious.

The lack of movement on these bills makes a special session all the more likely. Legislative leaders say they anticipate a one-day special session prior to Memorial Day, though it could be longer.

Lawmakers have to pass a budget by June 30 or the government will shut down.

Among the major sticking points: cutting MinnesotaCare for undocumented immigrant adults. Some rank-and-file, progressive Democrats broke with their leaders and Gov. Tim Walz and protested the budget agreement over the proposal and harshly criticized Democratic leadership for acquiescing to one of the Republicans’ top priorities.

House DFL Caucus leader Melissa Hortman, DFL-Brooklyn Park, appearing Friday on TPT Almanac, said Democrats will need to compromise given the divided government.

“People need to bend. They need to understand they won’t get everything they want,” Hortman said.

Rep. Cedrick Frazier, DFL-New Hope, who is also co-chair of the progressive People of Color and Indigenous Caucus, told reporters Saturday that the POCI Caucus doesn’t plan to shut down the government over cutting MinnesotaCare for undocumented adults.

“We care about all the Minnesotans, and we’re not willing to shut the government down, but we’re willing to make sure we work very hard to ensure the Minnesotans get what they need,” Frazier said.

Other contentious debates include potential changes to the state’s new paid leave and earned sick and safe time programs and cuts to taxpayer aid for private schools.

Walz has proposed cutting $109 million in aid that helps private schools with transportation, counseling and textbooks. The state has allocated this funding to private schools for decades, but Walz and Democrats are proposing the cuts amid a projected multi-billion dollar budget deficit beginning in 2027.

On Thursday, House Speaker Lisa Demuth, R-Cold Spring, gave reporters the impression that private school aid would not be touched and presented this as a win for Republicans.

“We also know that we have made great strides in protecting the funding for non-public education. We are protecting our schools,” Demuth said. “We are protecting our students so they can learn in the best way forward.”

But cuts to private school aid are still in play, as far as a key DFL senator is concerned.

Sen. Mary Kunesh, DFL-New Brighton, said that funding for private school aid wasn’t part of the global budget agreement, and protecting public education is a priority for Senate Democrats.

“I understand the uniqueness and the value of non-public schools, but as the chair of the Education Finance Committee in the state of Minnesota, my priority is to fund public schools at the best rate and in the best way possible,” Kunesh said in an interview with the Reformer.

A source with the House Republican caucus told the Reformer that there’s “no scenario where we will agree to” any cuts.

Kunesh, who also serves as an assistant majority leader, said that the cuts to private schools are part of her education budget, and she anticipates this issue to be a sticking point in budget negotiations between members of the House and Senate — also known as a conference committee.

“We just have to remind those members also that we have that obligation to public schools first,” Kunesh said. 

In between the Senate and House floor sessions, Rep. Dave Baker, R-Wilmar, and Sen. Judy Seeberger, DFL-Afton, held a small press gaggle near the Capitol rotunda to tell reporters that significant changes to the state’s paid leave and earned sick and safe time programs are still on the table, despite their absence from the legislative leaders’ budget agreement.

Legislative leaders agreed to reduce the paid leave payroll tax cap that the Department of Employment and Economic Development could implement each year from 1.2% to 1.1%. But since paid leave will launch in January with a 0.88% payroll tax split between employers and workers, the reduction does nothing to change the program as currently constituted.

Baker said Demuth has given him her blessing to keep trying to implement paid leave changes in conference committee, though he didn’t say what he would specifically look to change. Throughout the session, Baker has attempted to exempt small employers from the paid leave requirement.

“We’re just trying to get (paid leave) right-sized a little bit,” Baker told reporters.