Last-minute deal at the MN Legislature: $2.6 billion infrastructure package, more money for nursing homes

Christopher Magan, Pioneer Press
Updated ·6 min read
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Minnesota lawmakers announced Saturday morning that they have a $2.6 billion bipartisan deal on infrastructure projects that also includes sending $300 million to struggling nursing homes.

Infrastructure is the one area at the Legislature where bipartisan compromise is essential because super-majorities are needed in both chambers to borrow money to pay for projects.

Until Saturday, Democrats in narrow control of both the House and Senate were unable to agree to a deal with Republicans and appeared determined to pass a cash-only infrastructure bill.

The deal

In recent days, Democratic-Farmer-Labor Party members faced mounting criticism from Republicans that their more than $71 billion two-year budget didn’t do enough for nursing homes, which continue to struggle after the pandemic. Under the deal, nursing homes will get $75 million annually in additional aid over the next four years.

DFLers also were knocked for cutting most projects in Republican districts out of their cash-only infrastructure bill after the larger borrowing measure, or bonding bill, failed to earn enough GOP votes to clear the Senate.

There’s pent-up need for state infrastructure money because the Legislature hasn’t passed a bonding bill for capital projects since 2020.

The bipartisan infrastructure deal aims to borrow about $1.5 billion and spend $1.1 billion in cash on roads, bridges, wastewater treatment and other projects across the state.

Reaction

Lawmakers also emphasized their commitment to provide reasonable time for debate in order to finish their work by the required adjournment at midnight Monday.

“Better late than never,” House Speaker Melissa Hortman, DFL-Brooklyn Park, said of the agreement. “It is a really good deal for communities across Minnesota.”

The infrastructure deal is the latest development in a whirlwind of a legislative session that’s been driven by a DFL trifecta of political control and a historic $17.5 billion budget surplus. Democrats plan to put most of the surplus into new spending despite Republicans’ push to send more of it back to taxpayers.

“There just wasn’t an appetite to compromise on that; we tried every avenue we could,” said Senate Minority Leader Mark Johnson, R-East Grand Forks.

Just in the last week, DFLers have harnessed their narrow majority to legalize recreational cannabis, implement new gun-control laws, create a universal paid-leave program and approve billions in new spending.

Work yet to do

There’s much more to come before they adjourn. Lawmakers plan to approve $3 billion in tax changes, decide on added transportation taxes and fees as well as pass new health care laws.

DFLers have already approved big policy changes, including protections to abortion access, restored voting rights to felons who’ve served their time and access to driver’s licenses regardless of immigration status.

They’ve also passed unprecedented increases in government spending including $2.2 billion for public schools, $1.3 billion for long-term care services, $1 billion for housing projects and $670 million for environment and natural resources.

“Minnesotans were looking for some more of that money to come back, they were looking for less taxing,” House Minority Leader Lisa Demuth, R-Cold Spring, said of the Democrats’ budget plans.

Tax changes

One of the most controversial and closely watched topics at the Capitol is how lawmakers plan to change the taxes Minnesotans pay.

A joint House and Senate committee released details of a $3 billion tax bill Saturday morning just hours before it was expected to be debated by the House and Senate.

It includes a mix of $1.1 billion in tax rebates and $1.4 billion in new and expanded credits. Taxpayers will get $260 rebates if they earn less than $75,000 a year, or $520 for couples earning up to $150,000, with $260 more for each dependent up to a maximum of $1,300.

Lower-income families can get a tax credit worth $1,750 per child and seniors earning under $100,000 will pay no state tax on Social Security. Local governments will get more aid to hire police and pay for projects.

To pay for Democrats’ plans, there are increased taxes on corporations and high earners that will raise more than $1 billion in the next budget.

It remains to be seen if Democrats will approve a tentative agreement to tie gas taxes to inflation and increase car registration fees as well as add a 50-cent delivery fee in the metro. They’ve already approved a 0.7 percent earnings tax hike to fund the paid-leave program and a 0.25 percent metro sales tax for affordable-housing projects.

Questions still remain about how the tax bill might impact electronic pull-tabs and the charities that rely on them to raise money. Republicans and charitable groups worry requirements to make electronic pull-tabs look less like digital slot machines will dramatically hurt revenues.

“We don’t know the damage we are doing to our charities,” said Rep. Greg Davids, R-Preston, one of two GOP members on the tax conference committee.

New policy and spending

Democrats have already passed roughly a dozen budget bills with about $10 billion in new spending, most of which is ongoing. But there are still budget items and policy changes of major consequence under negotiation at the Capitol.

With more than $1 billion in new money, the state’s health and human services budget that’s still being finalized will have some important spending and policy changes. That bill is different from the long-term care spending approved earlier in the week.

Most notably is a move toward creating a public option to allow residents to buy in to the state’s MinnesotaCare health insurance that now covers the working poor. State officials need to study the impact and get the federal OK before they can move forward with expanding access to government-run health care.

Keeping Nurses at the Bedside, a bill to create committees to set nurse staffing levels, was recently pulled out of the health budget and is expected to be voted on before the end of session as standalone legislation. House and Senate Democrats have worked for days to try to amend the bill to appease hospital and health system leaders who say it is unworkable.

Nurses say it is needed because hospitals are understaffed and nurses are quitting the profession because they are overworked and cannot adequately care for patients.

The last thing lawmakers do likely will be the infrastructure bill they agreed upon early Saturday. It will take a couple of days to actually draft the bill language before it can hopefully be considered by lawmakers Monday before the end of session.

The $2.6 billion agreement has a mix of borrowing and cash that funds projects across the state.

“The infrastructure and jobs deal announced today will answer the calls for support that we’ve heard throughout this session,” said Sen. Sandy Pappas, DFL-St. Paul, who chairs the Capitol Investment Committee. “Town and city leaders have come to the Capitol for months to share their urgent needs in water quality, road and bridge safety, waste management, local government projects and more.”

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