|
|
June 23, 2025
Legislative Update
In the wake of the horrific and senseless violence that took the lives of Speaker Emerita Melissa Hortman and her husband, Mark, and left Senator John Hoffman and his wife wounded, our Capitol community is still in shock. This tragedy has deeply impacted people across the state and across the political spectrum. Our hearts remain with the families, friends, and colleagues who are grieving and recovering. In the midst of this sorrow, the work of governing has to continue. I want to provide a brief update on how this legislative session concluded and share some of my thoughts on the final outcomes.
While the session was constitutionally required to end on May 19, a large portion of the state budget remained unfinished at that time. A special session was called for Monday, June 9, to complete the remaining work. Since the end of regular session, legislative leaders and administration officials worked to finalize a comprehensive agreement, resulting in 14 budget bills debated and passed during the special session. Together, these bills make up a balanced $66 billion budget for the 2026-2027 biennium. However, the agreement leaves a projected $3.5 billion deficit in the 2028-2029 planning horizon, due to state spending continuing to outpace revenues. With a divided government, compromise was necessary, and while no one is completely satisfied, there are both encouraging steps forward and ongoing concerns to be aware of.
The Good
There were several positive outcomes in this year’s budget. One of the most significant was the decision to end taxpayer-funded health insurance for illegal adult immigrants. This program, launched in January 2025, had seen costs triple in projections to roughly $600 million over four years. With this change, we were able to redirect resources to reduce health insurance premiums for Minnesotans who purchase coverage through the individual marketplace.
Meaningful permitting reform also passed—one of the most significant overhauls in a decade. This will streamline approvals for infrastructure, energy, and business development projects across the state while maintaining important environmental protections. Coupled with new frameworks to attract data center investment, these reforms are expected to spur economic growth and bring private capital to Minnesota.
Importantly, this year’s budget reins in the rate of state spending compared to the previous biennium. State government spending will be approximately 8 percent lower than the last cycle, which saw an unprecedented 40 percent increase. While there were proposals to raise income and sales taxes by as much as $8 billion, those increases were successfully blocked. A balanced Legislature helped moderate those discussions and bring more accountability to the process.
The Bad
While progress was made in some areas, others fell short. Many local governments, school districts, and small businesses continue to face financial pressure from unfunded mandates enacted in recent years. Reforms to major programs like Paid Family Medical Leave, Earned Sick and Safe Time, and the Unemployment Insurance mandate for school hourly workers were discussed, but meaningful changes did not materialize. These mandates will remain a challenge for communities unless addressed in the future.
Attempts to ensure fairness in women’s athletics were also unsuccessful after receiving zero support from Democrats. Despite growing concerns among many Minnesotans, legislative efforts to keep men out of women’s sports did not advance this session. This remains a deeply important issue, and one I remain committed to working on in future sessions.
Minnesota budgets on a four-year outlook, and this budget does not provide balance. The Legislature should have made deeper cuts following the explosive 40% growth in government spending last biennium, much of which went to wasteful priorities out of step with the values of everyday Minnesotans. Among the worst examples is the grotesque expansion of the State Office Building, which will cost more than $730 million to provide new offices for 134 House members and staff. Rather than making responsible reductions, last year’s majority maxed out the state’s credit card and left a structural deficit on the bottom line. Minnesotans deserve better. They expect government to prioritize the needs of families over the self-interests of bureaucrats.
The Ugly
Some elements of the budget could have lasting negative impacts. Changes in the Human Services bill are expected to increase costs for long-term care facilities, including nursing homes, an outcome that many of us worked hard to prevent.
While support was maintained for nonpublic pupil aid, there are projected reductions in classroom funding beginning in the next budget cycle, which will likely affect school districts and local taxpayers if not addressed.
The budget also raises fees for Minnesotans who obtain or renew water and boat permits. Small farmers in our community can expect to see hundreds of dollars in new water permit fees, while the average farm may see thousands. And despite recent increases, the Aquatic Invasive Species surcharge was raised again to nearly $30 per boat.
While we were able to secure new oversight provisions to crack down on fraud in several budget bills, a major proposal to create an independent Office of the Inspector General with full investigatory authority was ultimately excluded from the final agreement. The bill had overwhelming bipartisan support in the Senate and was publicly supported by the Governor, but he did not support it during negotiations behind the scenes and prevented it from moving forward. Many Minnesotans rightly expect a more transparent and effective approach to preventing fraud, and I will continue working toward that goal.
Conclusion
There is still much work to be done. While this budget included a number of conservative victories, it also left Minnesotans vulnerable to the consequences of bloated spending, misplaced priorities, and a failure to address the structural challenges facing our state. We cannot afford to ignore the looming deficit, the strain on our local governments, or the damage being done by radical policies that undermine fairness, accountability, and common sense.
I remain committed to fighting for real reforms that prioritize families over bureaucracy, restore fiscal sanity, and uphold the values that matter to the people of Minnesota. I’ll continue working to hold government accountable and ensure that our state remains a place where people can thrive, raise a family, and pursue the American dream.
|
|
Stay Up-to-Date
Follow me on Twitter @ImSchultz and check out my official Facebook Page for daily updates on the important issues at the capitol.
|
|
 |
|
/RepIsaacSchultz
|
|
2nd Floor Centennial Office Building 658 Cedar Street Saint Paul, MN 55155 651.296.6746 |
|
|
|
|