Lawmakers reach budget agreement, special session expected in June

The regular legislative session is now over, but work still needs to be done.

Lawmakers have come together on a budget deal but some policy differences will need to be worked out as Republicans, DFLers and the governor hammer out a special session agreement.

The budget agreement came in too late to finish by the deadline. That means the remaining work will have to happen in a special session next month.

Minnesota lawmakers reach budget agreement; special session being planned

Gov. Tim Walz said he’s confident about the process.

"There’s 201 members of the legislature that need to work this through. They need to find compromise as we have and I do think that’s there," Walz said. "This is where democracy can really shine and again, I don’t want to fall on a Minnesota exceptionalism on this although in this case, I think this might be pretty exceptional. This is a pretty unusual thing in 2021."

In terms of the agreement, the federal unemployment payments Minnesotans received during the pandemic will be tax free.

The same goes for small business loans.

Republicans were able to get an agreement to drop tax hikes on top earners and corporations.

In exchange, Walz and House Democrats will get more education money.

The leaders say work will continue on other issues like police reform and emergency powers legislation.

Both sides say the agreement is a win.

"We have about a billion dollars of tax relief, and everything from paycheck protection—that was those loans that were giving to small businesses to keep their employees of the unemployment benefits—we are not going to tax those either. And then a number of other things that will be in it, that was very important to us," Senate Majority Leader Paul Gazelka said.

"Now on the policy side we do have more work to do," House Speaker Melissa Hortman said. "And really pivotal among that is criminal justice reform. I think there’s a lot of area for agreement and we look forward to working with our community and law enforcement partners to get an agreement that can pass a Republican Senate and a Democratic House and be signed into law by a Democratic governor."

Under the budget deal, there are also investments in transportation and health and human services.

The special session will likely be around June 14.