Minnesota State CapWatch
With An Updated Budget Forecast & Committee Deadlines, Legislative Session Picks Up Speed
With legislative deadlines announced and the February forecast in hand, the Minnesota Legislature will look to pick up the pace as it has a somewhat condensed calendar to complete its work on the biennial budget. Committee activity has already increased in recent weeks as legislators hold hearings on dozens of policy and budget proposals each day. That work will continue to ramp up over the next couple of weeks as the legislature closes in on committee deadlines. This year, legislative leaders have combined two historic milestones on the legislative calendar and set April 4, 2025 as the day by which legislative proposals must be heard and acted on by all policy committees in both legislative bodies.
Legislative leaders also announced late last week their intention to release budget targets in early April with the House of Representatives targeting April 1, 2025 and the Senate working towards April 5, 2025. Committee chairs will have limited time to assemble their budget proposals and pass them out of committee prior to the third committee deadline on April 11, 2025.
February Budget Forecast Released; Uncertainty Increases
On March 6, 2025, the Minnesota Department of Management and Budget (MMB) released the “February Forecast “which details the state’s financial picture both in the short and long term. The newly released analysis forecasts a $456 million surplus for fiscal year (FY) 26-27, which is $160 million lower than what MMB projected last November. Additionally, the forecast showed a $852 million increase in the projected deficit for FY 28-29, bringing the general fund deficit to $5.99 billion.
MMB noted higher than anticipated inflation and fewer interest rate cuts as two of the primary factors contributing to the worsened outlook. Additionally, MMB noted that the updated budget forecast does not account for any potential changes to the federal budget currently being considered by Congress.
Special Election on March 11
All eyes will turn towards the voters in House District 40B when they go to the polls tomorrow in a special election for the one vacant seat in the Minnesota Legislature. The district, which encompasses parts of Roseville and Shoreview, has been without a state representative since District Court Judge Leonardo Castro ruled that Curtis Johnson, the Democrat who appeared to have handily won the seat last November, was ineligible as he did not meet the state residency requirements.
Tomorrow, voters have the choice between DFL candidate David Gottfried and Republican candidate Paul Wikstrom with the winner expected to be sworn in early next week. While the district has consistently elected Democrats in recent years, the race has real significance as it could give House Republicans the 68th vote they need to pass legislation or, it could bring the legislature into a 67-67 tie and trigger a power-sharing agreement that would be determined by Speaker of the House Rep. Lisa Demuth (R-Cold Spring) and Speaker Emerita Rep. Melissa Hortman (DFL-Brooklyn Park).
Important Dates to Remember
March 11, 2025 HD 40B Special Election
March 29, 2025 Eid break Begins
April 1, 2025 Legislature Resumes
April 4, 2025 First Committee Deadline (the date by which bills must be acted upon by all policy committees in one chamber) and Second Committee Deadline (the date by which bills must be acted upon by all policy committees in the second chamber)
April 11, 2025 Third Committee Deadline & Start of Easter/Passover Break
April 21, 2025 Legislature Resumes at 12:00 PM
May 19, 2025 Constitutional Deadline to adjourn legislative session
Federal CapWatch
Federal Stopgap Funding Bill
House Republicans have proposed a stopgap funding bill that would cover the remainder of the fiscal year, ending September 30. With current funding expiring on March 14, this legislation presents Democrats with a take-it-or-leave-it decision to avoid a partial government shutdown.
Key Provisions
Nondefense Cuts: The bill eliminates billions in nondefense earmarks, removing thousands of home-state projects and cutting $13 billion from domestic and foreign aid programs.
The stopgap funding bill proposed by House Republicans eliminates billions of dollars in nondefense-related earmarks, removing thousands of home-state projects for lawmakers across both parties.
Key Points on Nondefense Earmark Removal
The removal of these earmarks is a significant departure from prior bipartisan negotiations, where earmarks often played a role in securing votes for spending bills. It remains to be seen whether this provision will survive Senate negotiations or if lawmakers will push to restore funding for key projects.
Additional Funding Adjustments
Next Steps
