Walz offers up tighter budget blueprint amid abnormal start to session

As an abnormal first week of the Minnesota Legislature wound down something completely normal happened: the governor unveiled a two-year budget blueprint. 

It has been a week of unprecedented moves in the Legislature. House Democrats boycotted the opening days as a tactic to deny a quorum. Republicans plowed forward, elected a speaker and made other organizational moves. Lawsuits have followed. 

The jockey for power in the House could take more time, and possibly court intervention, to sort out. The Senate is tied but has a power-sharing deal to allow for collaborative activity until a Jan. 28 special election undoes the knot.

Walz gave lawmakers something to chew on in the meantime. The second-term DFL governor unveiled a tighter budget that he hopes will be enticing to Republicans at the bargaining table while also starting to tackle what could be a fiscal problem down the road.

But until Thursday, Walz had not publicly spoken about the chaos underway in the Minnesota House. It came up toward the end of his budget presentation when pressed by reporters.

“Look, they’re cosplaying right now,” Walz said of actions by the 67-member House Republican caucus to charge forward in the absence of all 66 DFL members. 

The GOP had been ruled short of a quorum on Tuesday by Secretary of State Steve Simon, a DFLer who adjourned that opening day. Republicans overruled him. By Wednesday, Simon was blocked from entering the House chambers. 

Walz said Simon was legally required to convene the session and remain in the presiding officer position until the House is properly organized. He urged Republicans not to “go down this road. You’re not going to win in court. You’re not going to win in the court of public opinion.”

Simon quickly asked the Minnesota Supreme Court to weigh in and deem the Republican-only House sessions as unlawful. Arguments are scheduled for Thursday in his case and a companion petition by House DFLers. 

Voters elected a 67-67 House in November. But Republicans have a one seat edge because a Democrat lost a residency challenge and stepped aside. The winner of the Roseville-area seat will determine whether Republicans have a majority or if the two major parties return to a tie. 

To use that edge to implement a two-year GOP power structure seemed off to Walz. “That’s not how this works,” he said. “It’s silly.”

House Republican Leader Lisa Demuth, who is presiding as speaker after Tuesday’s vote, said she hasn’t yet heard from Walz directly since the session started. She said Walz would be better off prodding fellow Democrats to show up in the House and debate things, like the budget.

“That is how bills move forward and get to the governor’s desk,” Demuth said. “Those are the ideas that are going to be coming forward, and we look forward to partnering with our governor, once he chooses to want to work with us.”

Walz promoted his $66 billion budget framework following a November economic forecast that showed a potential deficit several years down the road. 

“This is the year to do it,” Walz said about cutting back at a time when Republicans have knocked back complete Democratic control. “This is very bipartisan. We’re cutting state spending. We’re cutting it responsibly.”

Walz proposes spending pullbacks and other measures to prevent a potential deficit, mostly by restraining growth in fast growing special education programs and those that serve people with disabilities living independently. He argued it can be done without affecting the access to or quality of those services.

He also proposes a lower state sales tax rate while calling for extending the tax’s reach to financial services. This more-restrained approach comes after Democrats passed the state’s highest-ever budget in 2023, one that topped $70 billion.  

Demuth pushed back on the notion that Walz was cutting taxes because of his tandem push to tack the charge onto more services, such as legal work and brokerage advice. Walz said it’s a matter of tax fairness and many people would see savings in the sales taxes they pay because they don’t use the services that would become taxable.

Demuth called his plan “absolutely unacceptable.”

“It’s almost like having that shiny object,” Demuth said. “Look what I’m going to do for you over here, but really, I’m going to tax you over here and increase the state revenue.”

Walz’s budget plan also calls for more investigators and efforts to root out spending abuses in state government programs.

One GOP member seemed somewhat open to the Walz starting bid. 

“This doesn’t look like a non-starter to me,” said Rep. Greg Davids, the top Republican on the House tax writing committee. “We have to work together. I mean we’re not going to sell the farm to give everything up just to do that. I think we can sit down at the table and I think we can.”

MPR News reporter Peter Cox contributed to this report.