What a last minute budget deal between legislative leaders means for the rest of session
Democratic Gov. Tim Walz talks talks with members of the press on Thursday after a compromise on the state budget framework in the Minnesota Capitol.
Clay Masters | MPR News
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Audio transcript
NINA MOINI: Well, in the nick of time, a budget deal has been reached between most of Minnesota's legislative leaders and the governor, Tim Walz. Now, it's time for committees to fill in more details and put the plan to a series of votes. So there's a little time left to get an on-time budget before the legislature is required to adjourn on Monday already.
So a short special session is possible. Here with details on this developing story is our Capitol Reporter, Clay Masters. Thanks for being here, Clay.
CLAY MASTERS: Glad to be here.
NINA MOINI: So talks of a special session always feel like a sign of summer to me. But when did this kind of big picture deal come together?
CLAY MASTERS: Legislative leaders have been meeting for weeks, Nina. Governor Walz originally said he thought they'd have it put together by May 2. It looks like he was off by about 12 days. Well, now, we're here.
They've got a $66 billion, two-year budget framework. Remember, this now goes to lawmakers and committees to hammer out those details now that they actually know how much money they're working with.
NINA MOINI: What do you know so far, Clay, about what's in it?
CLAY MASTERS: Yeah. The biggest spending reductions are in social service programs. One has to do with the children of immigrants without legal status. They would continue to qualify for subsidized Minnesota Care health insurance coverage, but their adult parents without proper documentation would be removed at the end of this year, 2025.
Education spending is held flat for the next two-year budget. Proposed cuts to money that public schools got for transportation and supplies are basically off the table. That's a win for Republicans. Also, we've got this unemployment insurance for hourly school workers. That was another big talking point during the negotiations. That could continue for a few more years, then it could go away. But that issue is still somewhat in flux. Those are just a few of those that are out there.
NINA MOINI: What are some of the reactions that you're hearing from rank and file lawmakers that are just being briefed on this?
CLAY MASTERS: Yeah. There's been some frustration from some of the Democratic members. There was quite the display, actually, and I could see it from some members as they were funneling into their caucus meetings this morning ahead of the big announcement.
I asked DFL Representative Maria Isa Perez Vega how she was feeling walking into her caucus meeting this morning. And she kind of shook her head no and let out a bit of a scoff. She's among members of the People of Color and Indigenous caucus who are not happy with the deal.
And, actually, they were standing outside the governor's reception room, where leaders and Governor Walz were announcing the deal, and they were chanting, yelling things like, "don't kill immigrants" and "one Minnesota, right?" That's a bit of a clap back in reference to Governor Walz's unifying message of one Minnesota. And the governor actually acknowledged that it wasn't the perfect deal for anyone. Here he is.
TIM WALZ: A lot of work yet to be-- you hear it. Passions. This is what happens when you compromise. This is what it means to try and work together.
These leaders knew that. They're going to go hear this. I'm going to hear it. That's the way this should be done. But I am proud that this is a solid budget. It is fiscally responsible. It is pro-growth. It brought together a divided legislature in a time against a backdrop of total chaos in DC.
CLAY MASTERS: And, Nina, you could hear that audio kind of faintly in the background, that's bleeding through the door from those frustrated lawmakers. And Senate Majority Leader Erin Murphy, a Democrat, with just a single vote to spare in the Senate, seemed almost apologetic for this one.
ERIN MURPHY: But it is the case, as I have been talking with my colleagues, that this is a very visceral and painful issue. I'm not at all surprised-- I'm not at all surprised that this is the response. And I would expect that this is going to be the case across Minnesota.
They're human beings. They are Minnesotans. They work in our communities. They work with and alongside us.
They go to church with us. They are our neighbors. And we have made a decision and a compromise that suggests that they are other. And that is something that people are going to object to.
NINA MOINI: Sounds there from some first reactions, Clay. But what took so long putting this together?
CLAY MASTERS: Yeah. All of the leaders kind of said there were a lot of areas to work through and a lot of sticking points. Remember, there's a Republican Speaker of the House in the tied House of Representatives, that's Lisa Demuth. And here's how she put it.
LISA DEMUTH: Getting us all into the same room and talking through sometimes line by line, issue by issue-- the question earlier was, why did it take so long? There is a lot of decisions that have to be made and a lot of perspectives.
CLAY MASTERS: And you'll recall, like I said, 67 to 67-- that's the member count for the House. So there hasn't exactly been a ton of wiggle room because of that tie.
NINA MOINI: Sure, Clay. So what happens from here?
CLAY MASTERS: It's time for committees to do their thing, Nina. They've got to use the overarching numbers to fill in the details. Lots of possible hold-ups remain. And then it's on to debate and floor votes. Those could last a while, given dissension we've already seen.
NINA MOINI: So what are some of the dynamics that were at play?
CLAY MASTERS: Notably absent-- this is one thing to note-- Senate Minority Leader Mark Johnson, really, the only minority party in the legislature right now. He was in on the talks throughout, but he did not sign the agreement that the other leaders did.
He was not at that press conference. He got credit for some of the work that he brought to the table. And then also, again, the legislature here is about as divided as it can be. I've said it now numerous times in this conversation.
House is tied. Senate has a one-vote majority for Democrats. On top of that, finances are very tight. There's also the cuts at the federal level, especially regarding Medicaid. And that could really throw things off.
NINA MOINI: So what are you expecting to see this weekend-- a lot of busyness?
CLAY MASTERS: Yeah. And there's also talks of a special session needed. So House DFL leader Melissa Hortman says if they can't get it all done by Monday night, she hopes it's a matter of a short special session before next weekend. But it's hard to say for certain how any of this will go, Nina.
NINA MOINI: Thank you so much for updating us, Clay.
CLAY MASTERS: You're welcome. Thank you.
NINA MOINI: That was MPR News Politics Reporter Clay Masters.
So a short special session is possible. Here with details on this developing story is our Capitol Reporter, Clay Masters. Thanks for being here, Clay.
CLAY MASTERS: Glad to be here.
NINA MOINI: So talks of a special session always feel like a sign of summer to me. But when did this kind of big picture deal come together?
CLAY MASTERS: Legislative leaders have been meeting for weeks, Nina. Governor Walz originally said he thought they'd have it put together by May 2. It looks like he was off by about 12 days. Well, now, we're here.
They've got a $66 billion, two-year budget framework. Remember, this now goes to lawmakers and committees to hammer out those details now that they actually know how much money they're working with.
NINA MOINI: What do you know so far, Clay, about what's in it?
CLAY MASTERS: Yeah. The biggest spending reductions are in social service programs. One has to do with the children of immigrants without legal status. They would continue to qualify for subsidized Minnesota Care health insurance coverage, but their adult parents without proper documentation would be removed at the end of this year, 2025.
Education spending is held flat for the next two-year budget. Proposed cuts to money that public schools got for transportation and supplies are basically off the table. That's a win for Republicans. Also, we've got this unemployment insurance for hourly school workers. That was another big talking point during the negotiations. That could continue for a few more years, then it could go away. But that issue is still somewhat in flux. Those are just a few of those that are out there.
NINA MOINI: What are some of the reactions that you're hearing from rank and file lawmakers that are just being briefed on this?
CLAY MASTERS: Yeah. There's been some frustration from some of the Democratic members. There was quite the display, actually, and I could see it from some members as they were funneling into their caucus meetings this morning ahead of the big announcement.
I asked DFL Representative Maria Isa Perez Vega how she was feeling walking into her caucus meeting this morning. And she kind of shook her head no and let out a bit of a scoff. She's among members of the People of Color and Indigenous caucus who are not happy with the deal.
And, actually, they were standing outside the governor's reception room, where leaders and Governor Walz were announcing the deal, and they were chanting, yelling things like, "don't kill immigrants" and "one Minnesota, right?" That's a bit of a clap back in reference to Governor Walz's unifying message of one Minnesota. And the governor actually acknowledged that it wasn't the perfect deal for anyone. Here he is.
TIM WALZ: A lot of work yet to be-- you hear it. Passions. This is what happens when you compromise. This is what it means to try and work together.
These leaders knew that. They're going to go hear this. I'm going to hear it. That's the way this should be done. But I am proud that this is a solid budget. It is fiscally responsible. It is pro-growth. It brought together a divided legislature in a time against a backdrop of total chaos in DC.
CLAY MASTERS: And, Nina, you could hear that audio kind of faintly in the background, that's bleeding through the door from those frustrated lawmakers. And Senate Majority Leader Erin Murphy, a Democrat, with just a single vote to spare in the Senate, seemed almost apologetic for this one.
ERIN MURPHY: But it is the case, as I have been talking with my colleagues, that this is a very visceral and painful issue. I'm not at all surprised-- I'm not at all surprised that this is the response. And I would expect that this is going to be the case across Minnesota.
They're human beings. They are Minnesotans. They work in our communities. They work with and alongside us.
They go to church with us. They are our neighbors. And we have made a decision and a compromise that suggests that they are other. And that is something that people are going to object to.
NINA MOINI: Sounds there from some first reactions, Clay. But what took so long putting this together?
CLAY MASTERS: Yeah. All of the leaders kind of said there were a lot of areas to work through and a lot of sticking points. Remember, there's a Republican Speaker of the House in the tied House of Representatives, that's Lisa Demuth. And here's how she put it.
LISA DEMUTH: Getting us all into the same room and talking through sometimes line by line, issue by issue-- the question earlier was, why did it take so long? There is a lot of decisions that have to be made and a lot of perspectives.
CLAY MASTERS: And you'll recall, like I said, 67 to 67-- that's the member count for the House. So there hasn't exactly been a ton of wiggle room because of that tie.
NINA MOINI: Sure, Clay. So what happens from here?
CLAY MASTERS: It's time for committees to do their thing, Nina. They've got to use the overarching numbers to fill in the details. Lots of possible hold-ups remain. And then it's on to debate and floor votes. Those could last a while, given dissension we've already seen.
NINA MOINI: So what are some of the dynamics that were at play?
CLAY MASTERS: Notably absent-- this is one thing to note-- Senate Minority Leader Mark Johnson, really, the only minority party in the legislature right now. He was in on the talks throughout, but he did not sign the agreement that the other leaders did.
He was not at that press conference. He got credit for some of the work that he brought to the table. And then also, again, the legislature here is about as divided as it can be. I've said it now numerous times in this conversation.
House is tied. Senate has a one-vote majority for Democrats. On top of that, finances are very tight. There's also the cuts at the federal level, especially regarding Medicaid. And that could really throw things off.
NINA MOINI: So what are you expecting to see this weekend-- a lot of busyness?
CLAY MASTERS: Yeah. And there's also talks of a special session needed. So House DFL leader Melissa Hortman says if they can't get it all done by Monday night, she hopes it's a matter of a short special session before next weekend. But it's hard to say for certain how any of this will go, Nina.
NINA MOINI: Thank you so much for updating us, Clay.
CLAY MASTERS: You're welcome. Thank you.
NINA MOINI: That was MPR News Politics Reporter Clay Masters.
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