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ST. PAUL — There were a few hits but lots of misses as the divided Minnesota Legislature blew a deadline for passing a package of tax cuts and new spending using the state’s massive budget surplus.

Democratic Gov. Tim Walz planned to meet Monday with Republican Senate Majority Leader Jeremy Miller and Democratic House Speaker Melissa Hortman to discuss whether they could find enough common ground to justify a special session to finish at least some of the work.

State government will continue functioning through June 2023 even without a special session. The Legislature passed a two-year budget last year — after a special session — so the lights will stay on.

But absent agreement on terms for reconvening, Minnesota residents won’t get tax cuts this year. No major steps will be taken to fight crime. No extra money will be available for schools and social programs such as child care and nursing homes. There will be no public works package known as a bonding bill. And Minnesota will walk away from millions of federal transportation dollars that require state matching funds.

The tax relief bill appeared close to done in the final weekend and might provide the most incentive for lawmakers to keep working. The deal called for eliminating the state income tax on all Social Security income, a top GOP priority. It also included a modest income tax rate cut for all taxpayers that was smaller than what Republicans originally proposed. Democrats got tax relief that they sought for homeowners and renters. However, Hortman followed through on a threat to prevent a vote on the tax bill until everything else got done.

Among the biggest hits of the session, which convened Jan. 31, was a deal that rolled back an increase in unemployment insurance taxes, which Republicans wanted, in return for bonuses to reward front-line workers for their service during the pandemic, a priority for Democrats.

Lawmakers also agreed on a $700 million extension of the state’s reinsurance program, which holds down premiums for residents who buy health insurance on the individual market.

Other bipartisan successes included a $25 million bill to fund research into ALS authored by Sen. David Tomassoni of Chisholm, who’s been battling the neurological disease. Also, the Legislature mandated that state government divest of its investments in Russia over its invasion of Ukraine.

Those deals and others left close to $7 billion of the state’s original $9.25 billion budget surplus available to be spent or returned to taxpayers.

A few more successes were recorded over the weekend. Walz signed 21 bills Sunday, including a “free the growler” measure that will let Minnesota’s six largest breweries sell 64-ounce jugs known as growlers directly to customers. Another bill directs more than $159 million from the Outdoor Heritage Fund to protect natural resources. Another makes Minnesota National Guard members with more than 12 years of service eligible for reenlistment bonuses.

The House and Senate also sent the governor an $18.4 million drought relief package that was the product of weeks of negotiations. But sports betting will remain illegal after key lawmakers didn’t agree on whether it should be allowed only at tribal casinos, or at horse tracks, too.
Walz, Miller and Hortman agreed last week on a broad framework that called for $4 billion in tax relief, $4 billion in spending and saving $4 billion. But filling in the details before the 11:59 p.m. Sunday deadline proved to be more than divided lawmakers could manage. The two sides couldn’t even agree on whether they came close to getting everything done.

“We’re about 90 to 95% of the way there,” Walz told reporters early Monday. “You don’t get the ball to the 1-yard line and then go home. You finish the job that Minnesotans expect us to do.”

Hortman, of Brooklyn Park, said a few bills were “very close” but that there was only a “relatively brief window of time” for finishing them.

Democrats are facing stiff headwinds in the midterm elections, and doing nothing would allow Republicans to enact bigger tax cuts if they win the governor’s office and both chambers.

Miller, of Winona, said waiting until next session to allocate the unspent surplus remains an option.

“We’re always happy to listen,” Miller told reporters. “But the reality is, the deadline was midnight. And that deadline has come and gone.”