Minnesota lawmakers wrapped up work on a $66 billion state budget early Tuesday morning, hours before an agreed upon deadline as part of a special session that focused on avoiding a partial state government shutdown.
Republicans and Democrats in the evenly split Minnesota House of Representatives started the special session on Monday morning with 14 bills needed to fund the state government. The most contentious bill, which removes undocumented adult immigrants from MinnesotaCare by the end of the year, was the focal point for several hours.
"Immigrants, especially undocumented immigrants, use healthcare at lower rates despite contributing billions of dollars in insurance premiums and taxes," said DFL Rep. Esther Agbaje (Minneapolis). "They help subsidize the U.S. healthcare system and offset the costs of care incurred by U.S.-born citizens."
Republicans argued that the bill was needed in-order to balance the state budget, while Democrats in both chambers opposed the move, which will will preserve coverage for children.
"What I worry about is the people who will lose their health insurance," said Speaker Emerita Melissa Hortman (DFL- Brooklyn Park). "I know that people will be hurt by that vote. We worked very hard to try and get a budget deal that wouldn't include that provision. We tried any other way we could to come to a budget agreement with Republicans and they wouldn't have it."
In the Senate, DFL Majority Leader Erin Murphy (St. Paul) called the vote one of the most "painful" she has ever had to take.
"It's not a budget saver, it's an othering," Murphy said. "And we know that."
Despite that bill drawing the most contention during Monday's special session, Republican House Speaker Lisa Demuth (Cold Spring) applauded both sides coming together to avoid a shutdown.
"The tie forced us to work together and I think that's something people outside the bubble here in St. Paul are looking for people to do. They want representation in the state that can work together and do the best things for our state going forward. We were forced into that and we have proven that there is a pathway through."
Monday's special session came after lawmakers adjourned their regular session on May 19. The extra time allowed lawmakers to approve a $700 million bonding bill to improve state roads and bridges, the first bonding bill in two years.
"Bonding was something that was a real priority for all of the caucuses," Demuth said. "This is probably the best bonding bill that has been passed as far as a statewide impact and there's not a lot of extra. It's roads, bridges, wastewater, and those core things that need to be done for our state."
Is another special session on the horizon?
Leaders in the House and Senate acknowledged their work may not be over yet this year, as a second special session may be needed in the fall to respond to work being done at the federal level.
"I think one of the things to consider is the state has about a $3 billion rainy day fund," says Olson. "But the challenge is for the first time in in memory for me, they left a $2 billion shortfall in two years. So they did not balance in two years. So if this economy turns sharply downward, then I think that's more likely to cause a special session, that, a natural disaster or something.
WCCO Political Analyst Blois Olson says if that happens, expect a difficult period of negotiations.
"Legislators themselves, especially with this dynamic, and legislative leaders are going to give the governor a certain amount of authority should they need to make changes in state government going forward, because we saw how hard this session was," he adds. "I can only imagine a special session would be really tough, and they'd probably be looking for more revenue. That would be a tough pill for Republicans to swallow."
Despite a tentative deal announced by legislative leaders at the end of the regular session, May 19, it still took over three weeks to get to this point. But lawmakers were up against a government shutdown forcing them to come to an agreement.
"This budget is really about, compromise," says Olson. "It's really about, they can't agree on anything, but they had to agree on a budget because they were worried about kind of a pox on both their houses, the Senate and the House and the governor. There's a lot of shifts in this budget."
Tax and fee changes
One controversial move came in the cannabis bill and associated taxes. Olson said it became a point of contention in the Senate.
"Cities were supposed to get part of the cannabis tax to deal with licensing and enforcement," Olson told Vineeta Sawkar on the WCCO Morning News. "That money now all goes to the state. So I want people to think of this as, this is the budget for the state to fund the state. And so they were looking for revenue from everywhere, and so they pulled money away from cities and counties, and gave it back to the state to fund the state government. That became one of the biggest, kind of contention points yesterday between Leader (Mark) Johnson (R- East Grand Forks) and Leader Murphy in the Senate."
Olson says another thing to watch are increased fees on state licenses.
"People should just kind of look for in this, increased fees on fishing licenses, things like that," Olson explained. "What I hear a little bit about is like, (we) don't mind paying more in fees, but the state needs to kind of modernize some of those services. They were supposed to have electronic fishing licenses over a year ago. They don't have them yet. Yet they're asking people to pay more fees. So, what's that money going for?"
State will no longer pay for undocumented immigrant healthcare
State-funded medical care for undocumented workers is also going away as part of the compromised deal. Olson says any undocumented adult (children are exempted), if you have MinnesotaCare, and you're an undocumented adult, you can still carry that insurance and pay for it till the end of the year.
"Then it is like any other piece of uncompensated care for a hospital," Olson says. "They would treat someone and then send them the bill, and then it is emergency medical. It's in collections. How does that go? These folks may also qualify to buy insurance on the private market. For instance, I'm a small business owner, so I buy on the MNsure market. They could still buy on the MNsure market. They just can't buy into the state program, which is administered by the state."
Original predictions for the program had around 3,000 signing up for the program which ended up being closer to 15,000, greatly increasing the cost to taxpayers.