As most have heard by now, the 2022 Minnesota legislature has adjourned with no agreements on how to use the surplus. The first thing to remember is that this was not a budget year, so there will be no shutdowns. The surplus could have been used for supplemental spending or tax cuts, but that is where the agreement could not be reached.
In our original plan from Senate Republicans, most of the surplus would have been used for tax cuts. The bulk of those cuts would have come by ending the tax on social security and lowering the income tax rate on the lowest tier. We heard from many throughout the state that they wanted us to give the money back. Sending one-time checks back was not the answer, in our opinion, so ongoing tax cuts were where we landed.
You can see the stark difference between the two plans. The Governor and House Democrats’ original plan was to spend the surplus on new programs, supplement current programs, and send out one-time checks. Negotiations were challenging as we tried to figure out how to come to a compromise on these plans.
As we neared the end of the session, a high-level agreement was reached. Use some of the surplus for tax relief, some for spending on programs, and leave some leftover for next year in the bank. Approximately $4 billion was in each pot. Unfortunately, that is as far as we could get regarding an agreement. The details of how that would be distributed were not agreed to by the end of session.
The Republicans in the Senate proposed that the portion for tax relief be focused on ending the tax on social security and some aid to counties and cities to help keep local property taxes down. Democrats came in with different priorities. An agreement was tentatively reached as we got to the final hours of session, but those agreements were never adopted in the conference committee because House Democrats would not come in for the final vote.
When it comes to the spending portion of the agreement, most of the money was to be used in education, health and human services, and public safety. The broad agreement allocated $1 billion for education, $1 billion for health and human services, and $450 million for public safety.
Senate Republicans proposed that the $1 billion for education be used to reduce the special education cross-subsidy. Requirements from the federal government to provide services for special education have never been fully funded by the federal government, so schools must pay for it from their general fund budget. We have heard from every school district around the state that this is the biggest burden on their system. We proposed giving $860 Million to schools to help lower that burden. We also continued our commitment to funding a program that trains teachers how to teach kids to read. Literacy is critical for learning, so we are committed to giving teachers the tools they need to teach kids.
In the health and human services area, the Senate had a plan to help our nursing homes, long-term care facilities, and the people who work caring for our most vulnerable. Facilities around the state are in danger of having to close their doors because of the lack of workers and the low reimbursement rates. Our plan would have not only raised those rates but would have given long-overdue raises to those who do this selfless and lifesaving work.
We have all seen in the news the stories of rising crime. Law enforcement officers are constantly criticized and questioned, so many are leaving or retiring early. In our proposal, we would have made investments to retain current law enforcement officers and recruit new ones. We also had provisions for holding those who break the law accountable for their actions.
Senate Republicans were committed on these priorities. Democrats were relentless on their priorities. The final details of a compromise could not be reached, we were just too far apart. There are still some talks going on with the Governor and House to see if it is worth it to call a special session, but the reality is we are still a long way apart, and an agreement is going to be hard to find.
The most disappointing thing about session is that this was supposed to be a policy and bonding year. The large surplus got most of the attention, so policy issues took a back seat, with very few getting done. Bonding also ended with no agreement. With leadership spending so much time trying to compromise on the surplus, not enough time was devoted to get the bonding bill across the finish line either. This is the one thing that could get an agreement on to have a special session. Many good projects could and should be done around the state, so I am hopeful that this at least will be an area of agreement that will happen soon.
Despite the lack of agreement, we accomplished a few essential things in the final days. We secured significant funding to continue improving Minnesota broadband access across the state. We got critical funding done for drought relief grants to help Minnesota farmers. We supported our veterans of all ages by securing money for veterans’ homes, service bonuses, and enlistment bonuses.
Additional good news is that the surplus will be there next year. Most of it will not be a projected surplus but money in the bank. With the pending recession and the war in Ukraine, it is possible it will not be as large as predicted. We will also have a much better idea of where the economy is headed next January and where some new needs may be.
Know that I am committed to continuing the conversations at the Capitol. I will be all around the district and encourage everyone to reach out and share their thoughts and opinions with me so I can represent the views of our area at the Capitol. Although the differences are vast, and the political rhetoric is likely to worsen this summer, I am confident we can come to compromises and good decisions to serve Minnesota well in the future.