Budget pact will be put to test as Minnesota lawmakers fill in details, bring plan up for votes

Published 8:28 am Friday, May 16, 2025

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By Peter Cox

It might be all over but the shouting on a budget agreement between legislative leaders and Gov. Tim Walz at least.

But expect a lot more shouting as leaders sell the deal to their caucuses and attempt to lock in the votes needed to make it law.

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Some Democratic lawmakers are upset over a proposed pullback in health insurance coverage for immigrants and loudly protested in the lobby of the governor’s office. A major employee union is fuming over a prison closure.

“No one got everything they wanted,” Walz said as he and a trio of legislative leaders spoke about it Thursday morning.

The DFL governor highlighted his focus on tamping down growth in government spending without disrupting spending for education, undoing paid leave programs and altering other key priorities of his party’s 2023 agenda.

But Walz, acknowledging a ruckus just outside the press conference where they spoke, said the deal won’t go down easy with everyone.

“Now the hard part starts for all of us — of getting the legislators together and we’ve got to get a majority vote,” he said.

Republican House Speaker Lisa Demuth praised the fiscal restraint in the agreement. But she, too, said that the larger body will have to hammer out their differences.

“We do have a lot of work left to do, but we are leaving that to our chairs, our conference committees and the full body to make those determinations,” she said. “I’m happy to tell you that with the global targets, we are seeing the largest spending cut in state history.”

She added, “And that is progress.”

Once the budget is set, it will be about $5 billion smaller than the one in place now. That was expected given that the prior budget of nearly $72 billion included a bunch of one-time-only spending that lapsed before lawmakers made a single move.

In broad strokes, this budget would rein in growing costs for the state. It would hold education spending flat, cut growth in social services and reconfigure the state’s prisons, including shutting down the Stillwater correctional facility by the end of the decade.

Leaders of unions for prison workers planned a press conference Friday to demand a halt to the Stillwater prison closure plan.

“This is not just a prison — it is a vital institution in Minnesota’s corrections system,” said Bart Andersen, executive director of AFSCME Council 5.

A few other agreed upon items could face additional scrutiny. And one part could prove to be a headache for Democrats.

This year, the state began extending access to the subsidized MinnesotaCare health insurance program to immigrants who don’t have legal status. Supporters of that move said it would help encourage primary care so people don’t wind up in emergency rooms and leave those costs to hospitals or force higher premiums for others. Republicans called the coverage an example of misplaced priorities and said the costs are adding up.

The deal would revoke the insurance for those adult immigrants at year’s end. Children in those families will continue to be covered.

Rep. Cedrick Frazier, a DFLer who is part of the People of Color and Indigenous Caucus, stood with members of that group shortly after the agreement was announced.

“We cannot vote for that. We are not ready to accept that, for our neighbors, for our friends, for our families,” he said. “We all stand here saying we are not ready to accept that right now, and we will continue to work through how we can move to something different.”

House DFL Leader Melissa Hortman’s voice was breaking with emotion as she addressed the pushback to the agreement on immigrant coverage.

“We go into that eyes wide open that this will change peoples’ lives, in some cases substantially for the worse. But it is a compromise,” Hortman said. “Under the compromise, we will be funding state government in the state of Minnesota. State government is finite and we make these choices.”

Without a new budget, a shutdown could occur starting in July.

It’s possible the health bill that makes the change could get through on the strength of Republican votes, but GOP members weren’t exactly ready to commit to that.

Republican Senate Minority Leader Mark Johnson said compromise is essential in a closely split Legislature — 101 DFLers and 100 Republicans in total.

He said the immigrant coverage is “one of those things that there’s been some compromise on. You saw the compassionate side of it too, with continuing on with the children’s care and that, which I think was a piece that most Minnesotans, can get behind,” he said.

But this could all shift a bit as bills move through their final stages.

Another point of friction is still in flux: It’s about unemployment benefits for hourly school workers. The House will vote on a plan to end those in a few years — something Republicans have pushed for — but the phaseout might not survive final deliberations.

Conference committees are expected to work to finish as much as possible by the May 19 adjournment deadline, although leaders say at least one day of special session is likely.

Hortman said a pre-Memorial Day finish is preferred. Johnson concurred.

“Perhaps, I’m being too Pollyannaish, but I’m very hopeful that we can get this done,” he said.

MPR News politics reporters Dana Ferguson and Clay Masters contributed to this story.