It appeared to be a victory for divided government.
When Gov. Tim Walz and the House Democratic and Senate GOP majorities leaders announced their $48 billion budget deal Sunday evening, it was a hopeful sign. Divided government can work, it suggested.
But frustration and grumbling among rank-and-file lawmakers, particularly among House Republicans, is dampening that view. Not enough perhaps to derail the global agreement reached by Walz and DFL and GOP legislative leaders, but enough to slow the process down.
Stung by the reinstatement of the provider tax and the fact that House Republican minority leader Kurt Daudt was frozen out of the end-of-session talks, GOP state representatives are fuming.
“We have been shut out of the process. There is no transparency,” said state Rep. Greg Davids, a Preston Republican. “The Democrats ran on being more transparent, and they have failed miserably.”
On Monday, the clock ran out on the session, and word on when a special session might start is unclear.
Some legislators are referring to Walz, DFL House Speaker Melissa Hortman and GOP Senate Majority Leader Paul Gazelka as the “tribunal,” for the way they are having final say on policy and fiscal matters.
Though financial targets have been set, individual conference committees still have to decide how those dollars will be spent. And it will be the tribunal that will ultimately decide on that and policy matters, legislators said.
“Apparently, what’s going on right now, is that the three leaders are deciding everything,” said DFL Rep. Gene Pelowski of Winona.
For Pelowski, the closed-door decision-making at the top signaled a further erosion of the conference committee process, a further step away from an open process. Divided goverment didn’t work this session, because “we didn’t complete our work, and we’re going into special session,” Pelowski said.
When the session opened last January, Walz’s proposed gas tax increase and the provider tax that helps fund health care programs were destined to define the session. In the end, the three leaders each took half a loaf. Walz yielded on his gas tax hike and Senate Republicans agreed to a reinstatement of the provider tax, albeit at a lower rate.
Republicans also won an income tax cut for middle-class Minnesotans, and both sides sides claimed credit for additional spending in education.
But the decision has roiled GOP House members, who strongly oppose giving in on the provider tax, a 2 percent levy on health care providers that was supposed to end in 2020. The agreement sets the tax at a slightly lower 1.8 percent.
For Rep. Nels Pierson, a Stewartville Republican who has battled to kill the tax for much of his legislative career, its continuation is galling.
“This will make health care more expensive for every patient in Minnesota, whether it be those going to Mayo Clinic in our area or those accessing treatment at any other clinic or hospital around the state,” Pierson said.
Sen. Carla Nelson, a Rochester Republican, said the tax’s reinstatement also gave her “heartburn,” and left her unsure how she would vote on the tax bill when it comes up in a special session.
GOP House members are also incensed that the deal includes a $500 bonding bill, which will need GOP support for it to pass the 60 percent threshold in the House. That puts the bonding bill in doubt. Davids said there can be no agreement on a bonding bill when the House lacks the votes to pass it.
The situation has exposed a divide between House and Senate Republicans. Senate Republicans are more comfortable with the deal, because their guy, Gazelka, was in the negotiating room.
Sen. Dave Senjem, a Rochester Republican, says his caucus was opposed to the provider tax, too, but eventually relented given the reality of balancing the $48 billion budget. It was either accept the gas tax or the provider tax, but it wasn’t realistic to resist both. The GOP controls only the Senate and that by a two-vote margin.
“It was the gas tax or the provider tax, and we took the provider tax and held firm on the gas tax,” Senjem said. “It was pick your poison.”
Although shut out of the talks, the minority House GOP does have weapons at its disposal. It can withhold votes on a bonding bill, essentially killing it. They can also draw out a special session by refusing to suspend House rules that would allow the chamber to take up bills without waiting three days.
“They can make things pretty miserable in the House just by prolonging the agony,” Senjem said. “It’s a matter of how far they go politically and what the backlash is.”