Ewald at the Capitol/February 26

February Budget and Economic Forecast

Twice a year, the office of Minnesota Management and Budget (MMB) releases a state budget and economic forecast that projects the overall fiscal stability of the state over the next biennium. After continued projections for a budget shortfall for the FY 2022-23 biennium, the February forecast now shows a $1.6 billion surplus, versus the $1.27 billion deficit that was previously anticipated. The increased forecast is attributed to an improved U.S. economic outlook, federal pandemic relief legislation and lower state spending.

As with any budget forecast, there are assumption risks. Forecast risks this time around include the path of the pandemic, the impact of vaccinations, federal support, consumer behavior, business confidence and financial market volatility.

Read more about the February forecast.

Walz Bonding Bill Proposal

Gov. Walz has announced a $518 million bonding bill proposal. The proposal represents investment in infrastructure across the state, with nearly half allocated toward repairs and improvements at state agencies and higher education institutions. The proposed bonding bill includes $240 million in General Obligation Bonds, $250 million in Appropriation Bonds and an additional $28.3 million in General Fund cash, with the following recommendations:

$43 million project to make security upgrades to the state Capitol and other nearby government buildings.
$150 million in Redevelopment Appropriation Bonds to help rebuild areas of Minneapolis and St. Paul that were damaged by civil unrest last year.
$100 million in Housing Infrastructure Bonds to preserve and build new housing across the state.
$15 million is designated to projects by community organizations that serve people of color and Native Americans.

In addition to these recommendations, projects that make use of federal funds will include a new State Veterans Cemetery in Redwood Falls and planning efforts for a second daily Amtrak train between the Twin Cities and Chicago. Bipartisan support in the House and Senate is required to pass a bonding bill. Passage requires a three-fifths supermajority.

SF 1, Continued Operation of Businesses during the COVID-19 Pandemic

SF 1 has passed the Senate; it would allow businesses to stay fully operational during the peacetime emergency so long as they develop a safety plan and operate in a “good faith effort” to maintain a safe and healthful operation. The bill also states that any future business shutdowns or restrictions governed by Executive Order must be approved by a majority vote in both bodies. Should there be approval by the full Legislature, businesses would have to receive a 14-day notice prior to closure or restriction.

The bill passed on a vote of 38-29. Both Independent members and two DFL members voted in the affirmative. There is a companion bill in the House, but it is unlikely to move forward.

U of M Regents Recommendation

The Legislature is tasked with electing members of the University of Minnesota Board of Regents, which is the school’s governing board. The Higher Education committees in the Senate and the House have now finalized their recommendations for four open seats on the twelve-member board. Next, a Joint Convention of the Legislature will be scheduled to accommodate voting by all 201 members at once.

Legislators are not required to vote only for Regent candidates who were recommended by the Higher Education committees; they may vote for anyone who applied. There were 19 applications for candidates, and the slate that was chosen in committee is one of the most racially diverse in the state’s history.

Dates to Remember

Key dates for the 2021 Legislative Session are:

March 12: First deadline. This is the deadline by which committees must act favorably on bills in the body where the bill originated.
March 19: Second deadline. This is the deadline by which committees in the opposite body must act favorably on bills or companions of bills.
March 26–April 5: Legislative Easter/Passover break.
April 9: Third deadline. This is the deadline by which committees must act favorably on major appropriation and finance bills.
May 17: End of regular session.