Minnesota State CapWatch
Senate and House Committee Hearings Continue; Legislative Deadlines Announced
The Minnesota Legislature continued to work at an accelerated pace this week as committees heard and considered a variety of budget, policy, and capital investment proposals. Committee hearings covered topics ranging from state agency operations to local community capital infrastructure proposals. Committees also invested considerable time in reviewing initiatives that could be incorporated into their respective omnibus finance proposals during the biennial budget process.
Legislative committee deadlines were agreed upon late last week, giving legislators a specific timeframe to get budget and policy work done. Committee deadlines are as follows:
Budget Forecast Upcoming; Looming Federal Cuts Concern Lawmakers
Next week, Minnesota Management and Budget (MMB) is expected to release an updated budget forecast. This is the second budget forecast of the cycle and, in updating the initial forecast released in November, the “February forecast” will solidify the parameters for lawmakers as they put together the state’s biennial budget. Gov. Walz and legislators have until May 19, 2025, the constitutional deadline for the session to adjourn, to pass a balanced budget and avoid a special legislative session.
While the February budget forecast will guide the Minnesota Legislature during the FY 26-27 budget process, it will not account for any changes in federal spending that might be passed by Congress in the coming weeks. Minnesota legislators, particularly those with oversight of health and human services programs, spent time discussing the potential impact of the federal budget resolution passed by the U.S. House of Representatives last week.
The federal budget resolution targets $2 trillion in budget cuts over the next 10 years, including up to $880 billion from the Medicaid program. A cut of that magnitude would call into question the viability of numerous state programs, including Medicaid and SNAP. With Minnesota already forecasted to have a budget deficit in FY 28-29, a significant loss of federal funds would greatly impact hospitals, nursing homes, and various treatment programs that serve individuals on public health programs.
Gov. Walz expressed his concern with this possibility and noted that he would have to change his initial state budget proposals to account for federal changes. State budget officials said the federal Medicaid cuts proposed in the U.S. House of Representative’s budget resolution could mean a reduction of $1.2 to $1.6 billion per year for Minnesota starting in FY 2027.
Legislative Proposals Continue to Stall on House Floor
Despite having 133 members present in recent weeks, the Minnesota House of Representatives is still struggling to reach the kind of bipartisan agreement needed to pass legislation. In the House of Representative, 68 members (a majority of the 134 total seats) must vote in the affirmative in order for legislation to pass out of the chamber. With neither chamber currently having a 68-vote majority (67 Republicans 66 DFL members, and one vacant seat), Republicans have been able to bring a number of priorities up for a vote but have been unable to secure the bipartisan support needed to pass them.
On Monday, February 24th, the House of Representatives faced that roadblock when attempting to pass H.F. 14, authored by Rep. Kristin Robbins (R-Maple Grove), which would temporarily prohibit Metropolitan Council spending on any other light rail transit projects until the Southwest LRT Green Line extension project is completed. The bill was set to fail on a vote of 67-66 before a procedural move allowed for a motion to reconsider and the bill to be tabled for possible future consideration.
Similarly, on Thursday, the House of Representatives took up and attempted to pass H.F. 21 (Robbins) which would require a three-fifths supermajority by the House and Senate to extend a peacetime emergency beyond 14 days. Also authored by Rep. Kristin Robbins (R-Maple Grove), the proposal was supported by all 67 Republicans while all 66 Democrats voted against the measure. House Republicans argued that the legislature should have greater authority to end a governor’s declaration of a peacetime emergency while House DFLers argued that current law provides sufficient authority to override executive powers when it came to emergency declarations. Failing to receive the 68 votes required, the bill failed to pass before being reconsidered and laid on the table.
Paid Family Leave Program Funding Increase
Last week the Department of Employment and Economic Development (DEED) announced that when the state’s new paid family and medical leave program launches on January 1, 2026 it will be funded by a .88% payroll tax. The Minnesota Legislature initially set the payroll tax at .75% when establishing the program in 2023, but it gave DEED authority to increase the tax (up to 1.2%) based on an actuarial analysis conducted by an outside firm. The increased rate will bring in an estimated $300 million in additional revenue in the first year.
Important Dates to Remember
March 6, 2025 Updated Budget Forecast Released
March 11, 2025 HD 40B Special Election
March 29, 2025 Eid break Begins
April 1, 2025 Legislature Resumes
April 4, 2025 First and Second Deadline
April 11, 2025 Third Deadline/Easter/Passover Break Begins
April 21, 2025 Legislature Resumes at 12:00 PM
May 19, 2025 Constitutional Deadline to adjourn legislative session
Federal CapWatch
Budget Battles
It could be weeks before the House and Senate agree on a final budget. The House passed a sweeping budget plan, while the Senate took a narrower approach. Key issue like immigration enforcement, defense spending, and tax policies will take time to resolve, especially with questions about what can pass under Senate rules.
With just under two weeks before the government funding deadline, negotiations are moving slowly. President Trump and GOP leaders back a short-term funding bill through September, but House Democrats say they’ve had no outreach from Republicans. Some House conservatives also remain skeptical of a long-term stopgap measure.
Stay tuned as budget talks unfold, and as Trump’s address sets the tone for what’s ahead.
Trump’s Address
President Trump is set to speak to Congress tomorrow night. Expect him to push his policy priorities, particularly on spending and tax cuts.
Education Confirmation Vote
The Senate will vote today on confirming Linda McMahon as Secretary of Education. A former head of the Small Business Administration and WWE CEO, McMahon supports school choice and apprenticeship programs.
Rolling Back Regulations
The House will take up three measures to block Biden-era environmental regulations, including rules on energy efficiency, emissions standards, and offshore drilling requirements.
