Will April debates bring May deals? This week at Minnesota Capitol could tell
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Updated 8:18 a.m.
With just about three weeks left in the legislative session – and leaders considering an early finish – lawmakers are entering crunch time to resolve differences between massive budget bills and move them to the governor’s desk.
Small groups of lawmakers will meet this week to look over different versions of education, public safety, health and human services and transportation budget bills to try to compromise on pieces that can advance through final votes and gain the governor’s signature.
During these small group discussions, which may happen behind the scenes before they’re opened to the public, legislators will decide the shape of tax credits or rebates this year as well as some tax and fee hikes. They’ll also determine precisely how the state should spend a roughly $72 billion budget.
And there are some bills that still need initial floor votes before they make it to conference committees.
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Senate to weigh tax bill Tuesday
After unveiling their tax plan last week, DFLers in the Minnesota Senate are set to bring to the floor for a vote a package of roughly $4 billion in tax credits and cuts.
The proposal contains some tax cuts, as well as a new tax hike for some corporations. Tax filers who made $75,000 or less in 2021 could stand to get a $279 tax credit, while couples that make $150,000 or less could see a $558 rebate, with additional credits available for families with children.
That one-time payment would be augmented by some child and dependent tax credits that are boosted in the bill.
More Social Security benefits would be spared from state taxes, basically for any recipients earning less than $100,000 per year for joint filers and $78,000 for solo filers. And the bill has more money for property tax relief programs and local aid.
Republicans and many Democrats on the campaign trail last year vowed to fully eliminate the tax. And the increased threshold – rather than full elimination – is likely to generate several amendments, as well as blowback, during the debate.
The plan would also pull in more money through a new corporate tax. In essence, corporations that earn money or have subsidiaries in other countries would have to report more revenue for Minnesota tax purposes – a somewhat untested system that could invite legal challenges.
Sen. Steve Drazkowski, R-Mazeppa, said Minnesotans wouldn’t like the idea of raising taxes for some to cut them for others.
“It's not going to be interpreted or viewed by Minnesotans as an honest tax cut,” he said. “When we're increasing taxes in one area to decrease them in another, it's like whac-a-mole. It's like pulling money out of one pocket and putting it in the other. We've seen this in the past in this Legislature and that doesn't go very well.”
DFL Senate Tax Committee Chair Ann Rest, DFL-New Hope, said it was a good way to help parents, low-income Minnesotans and others.
“Each person here will characterize it differently. But we often say we're going to do a benefit for one group of people and another group of people pays for it,” Rest said.
Marijuana bill and paid family leave
Two major agenda items for majority party Democrats in both chambers are also on the move.
The Senate on Friday approved a marijuana legalization plan, just days after the House did. The differing versions will require additional talks. A conference committee will face some urgency to get it done given that lawmakers are poised to leave town after approving the budget.
And a paid family and medical leave bill, which would establish a fund for partial wage replacement during time off around a major family change or illness, is set for its first showdown votes. The House is due to debate the measure Tuesday.
The plan would rely on a new payroll tax assessed on employers and employees and guarantee weeks off regardless of where somebody works, except for some seasonal employees.
Major business groups are fighting the mandate as too costly and an intrusion on the employer-employee relationship, given that benefits would be administered through the state.
Supporters contend that many workers can’t access adequate time off or lack protections when they do.
Lawmakers to choose new University of Minnesota regents
Monday evening, Minnesota lawmakers will convene a joint session to select new members of the University of Minnesota Board of Regents.
Each lawmaker gets a vote on each of the four regent slots up for consideration. That’s one third of the 12-member governing board.
Since DFLers hold 104 of the 201 legislative seats, they’ll have sway over the selections. There are sometimes demographic or geographic considerations that come into play.
But this is a critical moment for the university. Regents are in the process of choosing a new president, they’re dealing with a hospital merger that will affect the school’s medical program and they’ve been trying to mend fences at the Capitol.
Editor’s note: This story has been updated to reflect the timing of the Senate tax debate
Audio transcript
BRIAN BAKST: Good morning, Cathy.
CATHY WURZER: It's tough to know where to start. There's a lot going on here. The Senate takes up its tax bill tomorrow. So we're going to run down some of the major points.
BRIAN BAKST: Yeah, it both cuts taxes and raises revenue. This is the bill that would authorize a tax rebate of about $550 for couples, $275 for single filers under an income limit. And they could get more money for up to three dependents. That's a one-time payment. And it would be augmented by some child and dependent tax credits that are boosted.
More Social Security benefits would be spared from state taxes. Basically, any recipients earning less than $100,000 per year for joint filers and $78,000 for solo filers, they wouldn't see a Social Security tax from the state. It has more money for property tax relief programs and local aid. But it would pull in more money through new corporate tax. Corporations that earn money or have subsidiaries in other countries would have to report more revenue for Minnesota tax purposes, a somewhat untested system that could invite legal challenges.
And I found this exchange last week between Republican Senator Steve Drazkowski and DFL Senate Taxes chair Ann Rest to be illuminating.
[AUDIO PLAYBACK]
- It's not going to be interpreted or viewed by Minnesotans as an honest tax cut when we're increasing taxes in one area to decrease them in another. It's like whac-a-mole. It's like pulling money out of one pocket and putting them in the other. We've seen this in the past in this legislature. And that doesn't go very well.
- Each person here will characterize it differently. But we often say we're going to do a benefit for one group of people and another group of people pays for it.
[END PLAYBACK]
CATHY WURZER: Say, Brian, when it comes to the Social Security exemption, isn't it still short of what a lot of lawmakers, including Democrats, campaigned on last year?
BRIAN BAKST: It is. We heard a lot of calls for a full repeal of the tax ahead of the last election. Expect attempts through amendments to put some DFL lawmakers on the spot. But practically speaking, two things have gotten in the way. Money, because a full repeal would cost more than $1.2 billion in this budget and much more down the line. And philosophy, some DFL-ers, including the House Tax chair, wanted a cutoff line because they said not all seniors faced the same financial stress. And Representative Aisha Gomez says it's better to put money into other programs, including expanded property tax breaks for retirees.
CATHY WURZER: So the tax bill, as you know, is just one piece of the broader budget. And both the House and the Senate have passed their big spending plans for pretty much all the big categories, right-- education, health, transportation. So what comes next?
Well, the House and Senate are on the same page around how much money they put into each area they don't align on all the details. There are fees in some bills that aren't on the others. So get ready for something old fashioned.
[AUDIO PLAYBACK]
- Let the speaker appoint a conference committee of five members of the House and that the House requests that a light committee be appointed by the Senate.
- The Senate passed a good bill. We passed a good bill. But there's a few things we need to work out. So let's-- we need to go to conference.
- While the Senate passed a good bill, but we passed a better one. But I look forward to conferring with them. Thank you.
- They put the puzzle together just a little differently. We need to get it straightened out.
[END PLAYBACK]
BRIAN BAKST: Yeah, Cathy, we haven't had any conference committees until now. Most agreements were worked out ahead of time between DFL House and Senate leaders. Now I'm not saying that things will be hostile or adversarial. You heard the polite tone in the remarks we just played. But it will force the two chambers to air out their differences, hopefully in public.
CATHY WURZER: Yeah, conference committees can be kind of interesting. All right, what's also quite interesting at times and has been in the past, the joint session tonight to choose University of Minnesota Regents. For folks not familiar, how does that process work? And really, why does it matter?
BRIAN BAKST: So each lawmaker gets a vote on each of the four regent slots up for consideration. That's one third of the 12-member governing board at the university. Since DFL-ers hold 104 of the 201 legislative seats, they'll have sway over the selections. There are sometimes demographic or geographic considerations that come into play. But the DFL will pretty much drive this decision.
This is a critical moment for the university. Regents are in the process of choosing a new president. They're dealing with a hospital merger that will affect the school's medical program. And they've been trying to mend fences at the Capitol.
CATHY WURZER: So, by the way, is it looking like they're going to get done in time?
BRIAN BAKST: Lawmakers are already further along than they are typically. There's chatter of a finish just a couple of weeks into May. And DFL leaders think that there's a public messaging value in wrapping up before they have to and without the drama of the usual scramble.
CATHY WURZER: Oh, all right. Brian Bakst, thank you.
BRIAN BAKST: You're welcome, Cathy.
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