Minnesota legislators prepare for special session

[MUSIC PLAYING] NINA MOINI: Well, it's our top story. If legislative leaders and Governor Tim Walz had their way, all 201 lawmakers would be headed back to the Capitol for a special session as soon as tomorrow, Wednesday. The governor has not yet made that report-for-duty call.

Lawmakers have not polished up every part of the budget enough to prepare bills for votes. State leaders are making early preparations for a possible partial government shutdown, but that worst case scenario is still weeks away. Peter Cox joins us from the Capitol to talk about what's ready and what's still holding things up. Thanks for taking the time, Peter.

PETER COX: Yeah, hi, Nina.

NINA MOINI: You're sort of busy, but you're all kind of waiting around. So we keep hearing that we're close. Do we know when a special session will be?

PETER COX: Yeah, that's right, Nina. Leaders have been saying we're close for weeks pretty much every time they go in or out of a meeting. But it does now feel like things are closer, as most major bills have had sign-offs from their working groups. Leaders met yesterday afternoon, and they said they expected a special session would be called Wednesday.

But I just heard from the governor's office that leaders will be meeting about an hour from now. That doesn't make it much clearer when a session would be. But given the timing, Wednesday might be too soon to corral everyone on short notice. So stay tuned, I guess.

NINA MOINI: Sure, we will. But what has to happen before Governor Walz will call the lawmakers in?

PETER COX: Well, first, they need the bills to be drafted by the reviser's office. And so, while subject area working groups have signed off on their budget spreadsheets, that office still has to put the bills into their proper form and go through a process for each bill. In some cases, those bills are hundreds of pages long. Each legal citation needs to be checked and wording proofread. They don't want to make any mistakes by rushing things. So it's time consuming.

NINA MOINI: Sure. And which parts of the budget still need to be enacted?

PETER COX: So Nina, it'd be a lot cooler if I could rattle these off kind of like an auctioneer, but--

NINA MOINI: Oh. It would. [LAUGHS]

PETER COX: Yeah, but you know I don't talk that quickly. So the majority of budget bills still need to be enacted. When the legislature adjourned the regular session, lawmakers had approved about a tenth of the overall budget. So that's left a lot of big ones-- the bill to fund health programs and social services, one that supplies aid to colleges and students that attend higher education institutions. There's a bill that pays for public education for preschool through high school. And there's a bill to pay for parks and natural resource programs and pollution control. So--

NINA MOINI: Wow.

PETER COX: --you get the idea. And then there's the tax bill. That one does not need to pass, but lawmakers will probably try to pass that.

NINA MOINI: OK. So are there some other portions that are causing more problems than others?

PETER COX: Yeah, first, we've heard that key lawmakers in both parties are not happy with that tax bill. It was stripped down to just a few items that legislative leaders and the governor consented to. Much was tossed overboard.

Republicans in particular don't like that it raises taxes, partly by boosting the cannabis products tax and also by doing away with an electricity tax exemption for data centers. My colleague, Clay Masters, spoke with Representative Greg Davids. He's the Republican House lead on the taxes working group. Here's what Davids said yesterday.

GREG DAVIDS: I certainly am not sure why any Republican would vote for that bill, whether it be House and Senate. There's really no reason to vote for it. It's massive tax increases. And that's not what our caucus is supposed to be about.

PETER COX: So that could prove to be a tough hurdle and a point of further negotiation among leaders. Senator Ann Rest, the top Democrat in that tax panel, told the Minnesota Reformer that she's also opposed and doesn't think it has a chance. So we might see more negotiations there. But again, that bill does not have to pass.

NINA MOINI: OK. Are there any other issues that are kind of top of mind?

PETER COX: Yeah, there's also the issue of removing immigrants without proper legal status from Minnesota care. That's the state-subsidized health insurance program. The leadership agreement would end coverage for adults who aren't in the country legally. That's caused an uproar on the political left.

So passage of that bill could be tricky. It's not clear if that's going to be included in an overall health and human services bill or be pulled out as its own bill. On its own, that bill could face a tougher path to passage than if it's included in that larger bill.

NINA MOINI: OK. So what do we know about the budget bills that have been assembled?

PETER COX: So most of these bills don't have any major policy changes, and most tighten or at least slow down growth in budgets in their respective agencies. In the education bill, for instance, the spending remains relatively flat, with some cuts to programs that help recruit teachers and some cuts to transportation for special education.

It also looks to cut $420 million in a future budget. That would be in 2028 and '29. In the environment and natural resources bill, one of the bigger changes pushed for by the governor and Republicans is to streamline the environmental permitting process for companies and municipalities.

NINA MOINI: So Peter, do we know or do you have a sense for how the votes will actually shake out once the bills hit the House and the Senate floors?

PETER COX: So it's likely that most bills would pass. The environmental bill and transportation packages had a lot of bipartisan give-and-take, same with that economic development package. The education bills tend to rack up a lot of votes, but some of these could pass by slim margins.

And the tax bill, again, is a question mark. The House is 67 to 67 between the parties. And the Senate is 34 to 33 with a DFL edge. Of note, Senate Republican Leader Mark Johnson has not signed off on any of the agreements, nor pledged any votes by any of his members to pass those bills.

NINA MOINI: OK. What steps are being taken to get ready in case lawmakers do fail to get it all done by the end of the fiscal year, which is the end of this month, June 30?

PETER COX: Right. So Nina, one of the pressing issues right now is that the state needs to prepare for a government shutdown if a budget is not passed by that end-of-the-month date. Part of that is sending out layoff notices to state employees. That's already started. State nurses have already been sent layoff notices. And other public employees would get notices sent out early next week.

Leaders have said they'd like to avoid doing that. And they believe if a special session does happen this week, that can be avoided. But as we've seen with that tax bill, there are some precarious negotiations ahead. Not having the votes to pass any of these major bills could slow this entire process down and put the legislature in an even tougher position, as it barrels towards that deadline.

NINA MOINI: Is anyone predicting that it will get to that point?

PETER COX: No one is saying they want to get to that point. It's in the interest of the leaders to project optimism because they're the ones trying to strike these deals that eventually will get put into votes. And remember, there's blame or credit to go around this year, given the tide in the Minnesota House that's being jointly run by Democrats and Republicans.

A few current members of the House were around last time there was a shutdown. That was in 2011. The deadline for passing bills might be weeks away, but those days tend to fly by right now, and the risks grow closer as we get to the end of the month.

NINA MOINI: Peter, thank you so much for all of that. I really appreciate it.

PETER COX: You're welcome, Nina.

NINA MOINI: That was MPR Newsday reporter Peter Cox from the Capitol.