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Legislative Leaders, Gov. Walz Announce Broad Deal On New Spending, Tax Cuts

ST. PAUL, Minn. (WCCO) -- Gov. Tim Walz and top legislative leaders on Monday announced a broad agreement on how to spend billions of a state budget surplus, which includes new education spending and a tax relief package.

The deal, which covers the remainder of this biennium and the following two budget years, includes $4 billion for new spending and another $4 billion for a tax bill. It also leaves on the bottom line $4.1 billion should the economy take a turn for the worse.

"The parameters have been set and they've been done in a way that again, I think should make Minnesotans proud," Walz said.

The one-page agreement offers few specifics but earmarks $1 billion for E12 education, $1 billion for health and human services, $450 million for public safety. There's also $1.4 billion for a bonding package for infrastructure projects. An additional line item includes $1.32 billion for "other areas as agreed by leaders."

"The investments contained in this budget agreement will make a big difference in the lives of millions of people," said House Majority Leader Ryan Winkler, DFL-Golden Valley.

Walz, GOP Senate Majority Leader Jeremy Miller and DFL House Speaker Melissa Hortman agreed to those top line numbers over the weekend and on Monday praised the bipartisan effort. But the details are far from clear and time is running out—the session ends next Monday.

Miller summed it up this way: "There have been no final decisions on really anything at this point. Otherwise we'd have the bills done and on the governor's desk."

Tax cuts are a top priority for Miller and Senate Republicans. He and Walz both suggested the final deal will include permanent tax cuts, and the governor is still pushing for one-time direct payments.

Now it's up to conference committees, special meetings of Senate and House lawmakers on key priority areas, to hash out those details. The budget framework gives them spending limitations, but they are far apart on many issues, including education and public safety.

If they can't agree, leaders will intervene to button up negotiations.

In a divided legislature, Republicans and Democrats start the session gulfs apart and by its end, they need to bridge the gaps and find agreement to get anything done. A budget framework like this is a key step in that process.

"It's a responsible deal, a compromise deal. It's good for Minnesotans," Walz said. "What you're going to get out of this is you're going to get relief—you're going to get tax relief. You're going to get bipartisan commitment around public safety. You're going to get education funding and you're going to get some reduction in some of those costs."

The regular session ends next Monday, May 23. So far Walz has said he doesn't want to call a special session.

Lawmakers recently struck a separate deal on replenishing the jobless claims fund and sending frontline worker bonus checks to Minnesotans.

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