For the entire first hour of this past Sunday's radio show, I discussed the 2019 Minnesota legislative session with Americans for Prosperity State Director Jason Flohrs. Given the DFL (which controls the governor's office and House of Representatives) was digging in on a 20 cents per gallon tax increase as well as myriad other hikes resulting in $12 billion of increases, I saw no possible way an agreement could be reached on a state budget by 11:59 PM Monday evening. Jason agreed with me, so we made tentative plans for him to come back on the broadcast when an inevitable special session of the Legislature was called by Gov. Tim Walz.
Then on Sunday evening I was scheduled to guest host on the Up and At 'Em podcast with Ben Kruse. As I awaited Ben's arrival I was scrolling through Twitter when I saw a few blurbs indicating Gov. Walz and legislative leaders had reached agreement on a budget. Upon Ben's arrival, we settled in to the studio and watched multiple a live press conferences where the leaders spelled out terms of the agreement.
“Today we prove that divided government can work for the betterment of the people we serve,” said Gov. Tim Walz, who announced the budget plan with Republican Senate Majority Leader Paul Gazelka and Democratic House Speaker Melissa Hortman. “Instead of dysfunction, shutdowns and yelling we have a compromise agreement. … We’re still friends.”
Under the plan, spending will rise about $1 billion over the projected base budget of $47.4 billion for 2020-2021. The current budget is $45.5 billion and expires June 30.
The budget was expected to grow by nearly $2 billion if lawmakers changed nothing because of inflation, increased population and new and expanding state programs.
The deal also includes a quarter percent cut in the second tier of the state’s income tax. The rate will fall from 7.05 percent to 6.8 percent by 2022.
That and stopping the gas tax were big wins for Gazelka.
“Minnesota is finally going to see income taxes go down for the first time in 20 years,” Gazelka said. “Stopping the gas tax increase was one of our top priorities, and I’m pleased Governor Walz and House Democrats ultimately listened to the people of Minnesota and rejected this approach.”
In addition, the latest public safety omnibus bill included no gun control.
So if I had been told that a budget deal would be reached before Monday night, I would have been skeptical it. But if it had also been conveyed to me that not only would a deal be reached but said budget would also include no new gas tax, a middle class tax cut and no gun control provisions, I would have asked what the GOP had to give up in order to receive those concessions.
(The pact) continues a tax on health care providers that Republicans wanted to allow to sunset, but the rate falls from 2 percent to 1.8 percent.
(House Minority Leader Kurt) Daudt said his members are unhappy the provider tax is not going away and will want to air their frustrations during the final debates. “I think this is a failure of this deal,” Daudt said. “We are incredibly disappointed that is the end result.”
There's a reason why Democrats were willing to concede so much in an effort to continue the provider tax (aka a "sick tax"). Rep. Peggy Scott (R-Andover) encapsulated the GOP's frustration.
"By not getting rid of the sick tax they are paving the way for a funding mechanism for single payer healthcare in Minnesota.
The Dems play the long game, folks. Don’t be deceived. They were willing to let go of the gas tax and a lot of policy to keep the provider tax. They will continue to push their One Care single payer plan. Mark my words. Sadly (the) GOP senate fell for it."
All 201 seats in the Minnesota Legislature will be up for election in 2020. Seems to me a lot of campaign narratives were established with this latest budget agreement.