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House leadership proposes $52.5 billion budget for upcoming biennium

House DFL leaders on Tuesday announced a proposed $52.5 billion state budget for 2022-23 during a morning news conference. (Screenshot of Tuesday's remote news conference)
House DFL leaders on Tuesday announced a proposed $52.5 billion state budget for 2022-23 during a morning news conference. (Screenshot of Tuesday's remote news conference)

(Updated 6:50 p.m. to include committee passage of budget resolution

Now the numbers are known.

With the theme of putting Minnesota families and workers first, the House DFL Caucus released its $52.52 billion in budget targets for the 2022-23 biennium Tuesday.

A resolution supporting the targets was approved later in the day by the House Ways and Means Committee on a party-line vote.

"House DFLers are recognizing the tremendous challenges Minnesotans have experienced over the past year and investing in our state's resiliency to help our students, workers, small businesses and families recover," Rep. Liz Olson (DFL-Duluth) said at a morning news conference. " … Our budget lays the groundwork for everyone in our state to once again have the opportunity to succeed no matter where they live or what they look like."

"Students and children are our highest priority, but this budget completely funds education, health care, economic security and safe and inclusive communities. We look forward to the committee chairs and all the members of the committee, Democrat and Republican, contributing to a budget that serves Minnesotans well," said House Speaker Melissa Hortman (DFL-Brooklyn Park).

The plan calls for $721.7 million in new education spending, $120 million for higher education and $50 million for early childhood. For health and human services, the proposed increase is $323 million.

"A state budget is more than numbers on paper; it's a moral document and a blueprint that reflects our values as Minnesotans," said Rep. Jim Davnie (DFL-Mpls).

In a statement, House Minority Leader Kurt Daudt (R-Crown) questioned those principles. "Instead of helping struggling workers and businesses, Democrats are prioritizing tax hikes and growing government."

The budget includes a general obligation bonding target of $500 million, the same for appropriations bonds and a $30 million cash target. Hortman said numbers on the spreadsheet represent interest payments going forward.

The stadium reserve account would be capped at $100 million each year. The account covers shortfalls or paying down U.S. Bank Stadium-related debt and expenses, but it is expected to have a $200.7 million balance in 2023. Some members have argued the extra money would be better used to refinance bond debt and pay off the building early.

Most committees need to approve their omnibus bills by April 9, this year's third committee deadline. The House Capital Investment, Ways and Means, Taxes and Rules and Legislative Administration committees are exempt from this requirement.

The Legislature must finish its work by May 17. The biennium begins July 1, 2021.

[MORE: See the DFL's proposed budget]

Raising revenue

To help pay for their priorities, Rep. Paul Marquart (DFL-Dilworth) remained coy on specifics.

Chair the House Taxes Committee, Marquart said the lone tax bill would be released the first week in April. "There'll certainly be tax cuts to individuals and small businesses on the PPE and unemployment insurance and aid. We're going to pay for that with progressive, ongoing revenue that's going to create more fairness and level the playing field."

Hortman said the tax bill will be revenue neutral in the 2022-23 biennium; however, there will be ongoing revenue in the future. 

"We have a $1.6 billion surplus, and $8 billion coming from the federal government - it's tone deaf to be pushing for tax increases on struggling Minnesotans when government is flush with cash," Daudt said.

Federal funding

A significant amount of federal stimulus money is coming to the state - some in state and local funding, but some targeted to areas such as child care, education and housing.

"President Biden's rescue plan is exactly what Minnesota needs now, but in the long run we need to invest more in health and education or we will fall behind," said House Majority Leader Ryan Winkler (DFL-Golden Valley).

Understanding how federal dollars are directed while also putting together a state budget will be challenging.

Higher education was cited as an example. What the state allocates will be influenced by how much the institutions receive in direct federal relief funding. "Much of the federal aid is to address discrepancies that are because of COVID-19. If you take that away, we still have our ongoing commitment," Hortman said.

Comparing with the Senate

Senate Republicans released their budget targets March 16.

"This budget funds our Minnesota Priorities to balance the budget without raising taxes, recover from COVID, and support Minnesota families," Senate Majority Leader Paul Gazelka (R-East Gull Lake) said in a statement. "We are focused on keeping the budget in control considering all the one-time money coming into the state from federal funds and stimulus checks."

Hortman said now is not the time for cuts or disinvestments in the state budget, especially for people suffering the most from COVID-19.

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