Minnesota wraps up budget negotiations, Democrats rejoice over key policy wins

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The Minnesota Legislature was putting the final touches on a $72 billion state budget Monday as Democrats celebrated enacting an ambitious agenda that ranged from protecting abortion rights, to providing more resources for education, to legalizing marijuana.

The big tax bill of the session, which cleared its final test Sunday evening, included $3 billion in tax cuts, including modest one-time rebates from the state's $17.5 billion budget surplus. But lawmakers also approved tax increases to provide ongoing funding for long-term initiatives like transportation improvements and a new paid family and medical leave program.

Democratic Gov. Tim Walz called it "clearly the most successful legislative session" in many Minnesotans’ lifetimes when he spoke to reporters Sunday.

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Top Democratic legislative leaders agreed Monday as they worked toward an adjournment deadline of midnight. They said they met all the major goals they laid out at the start of the session in January after taking control of both the House and Senate for the first time in eight years. Their top priorities got the first 30 bill numbers in each chamber.

"We set out at the very beginning of session with our top 30 goals, introduced jointly with the House and the Senate. And as of the end of the day, we are going to pass the entirety of our top priorities with the House and Senate," House Majority Leader Jamie Long, of Minneapolis, told reporters. "So that is an incredible accomplishment with a two-vote majority in the House and a one-vote majority in the Senate."

"What I wanted us to do was under promise and over deliver. And I feel like that’s what we did," said House Speaker Melissa Hortman, of Brooklyn Park. "When we came in in January, we didn’t say we would be able to do everything. We knew what we wanted to work on, but we didn’t make promises that we wouldn’t be able to keep. So, I’m just thrilled that we were able to check off everything."

Democrats have frequently described the legislation they've passed this session as "transformational," "historic," "generational" and game-changing."

"We’re just all a little overwhelmed — absolutely giddy — with the work that has been done here," Democratic Sen. Mary Kunesh, of New Brighton, told reporters Monday. She went on to say, "We will continue to do this work not just this year, but next year."

The Minnesota House of Representatives' top-ranking Democrats speak with the press as negotiations on a state budget draw to a close. (AP Photo/Trisha Ahmed)

Kunesh highlighted legislation aimed at helping people of color. Her list included billions more for schools, a new ethnic studies curriculum, more limits on no-knock warrants by police, improvements for tracking hate crimes, paid family and medical leave, opening the MinnesotaCare health plan to more residents regardless of immigration status, and more assistance to first-time homeowners.

But the Republican minority, which was largely sidelined on most contentious issues this session, was upset that Democrats spent most of the surplus instead of returning it to taxpayers. And they decried Democrats for raising taxes by $2.2 billion over the next two years via the tax bill alone.

"We've seen Democrats take a hard left turn and really lose track of what's important to Minnesotans," Republican Senate Minority Leader Mark Johnson, of East Grand Forks, told reporters Saturday.

Democrats tout the tax bill as the largest tax cut in state history, with direct rebates of $260 per filer and up to three dependents for a maximum of $1,300, subject to income limits, plus tax credits for families with kids that they say will cut child poverty by a third. Social Security benefits will be fully tax-exempt for Minnesotans making $100,000 or less and partly exempt for those whole earn up to $140,000. But the bill also includes tax increases on companies with global income and some reduced deductions for wealthy individuals. Republicans said the various tax increases across the budget canceled out any relief.

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"Democrats will be talking about historic tax cuts this year," said GOP Sen. Bill Weber, of Luverne, the lead Senate Republican on tax issues. "However, the reality is that the majority of Minnesotans who helped create our state’s historic surplus will not receive any financial relief."

The transportation bill approved in both chambers Sunday contains new funding for public transit, roads and bridges. Some of that will come from a 0.75% sales tax increase in the Twin Cities metro area, a 50-cent fee on non-food deliveries over $100 and higher driver's license and vehicle registration fees. It also includes money to help finance restoring passenger rail service between the Twin Cities and Duluth.

Senate Republicans had blocked a public infrastructure borrowing package known as a bonding bill all session as they pressed for deeper tax cuts from the surplus. They settled over the weekend for $300 million to help nursing homes that are struggling with staff shortages and cost pressures stay open.

Lawmakers over the weekend also gave final approval to legalizing recreational marijuana. It will be legal to possess and grow your own cannabis, within limits, starting Aug. 1. A website for the new Office of Cannabis Management has already gone live, but retail sales are probably at least a year away.

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Democrats made abortion rights one of their top priorities of the session. They moved quicky to enshrine the right to abortion and other reproductive health care into Minnesota statutes in January, and followed up with legislation to protect patients from restrictive states who come to Minnesota for abortions. They took a final step Monday when they unveiled the final version of a health and human services budget bill that formally repeals old restrictions on abortion that a judge declared unconstitutional last summer, which drew protests from Republicans who said it leaves the state with essentially no abortion limits.