Notes from the Capitol

An update from GMNP Executive Director Scott McMahon:

We have hit the point in the legislative session where the budget is starting to take shape. During the past two weeks, Governor Walz, the House DFL, and the Senate GOP have all released their budget framework, thereby putting their stake in the ground on what Minnesota’s budget priorities should be for the upcoming biennium. The reality is the budget that ultimately passes in May (or June, if the past several budget sessions give any indication) will include more spending than the lowest target from all three frameworks.

Governor Walz’ plan calls for a $52.4 billion budget for the next two years, the Senate GOP is recommending a $51.9 billion budget, and the House DFL just released a budget framework calling for $52.5 billion. In the grand scheme of things, a $600 million difference in a $52 billion budget (a 1 percent difference) does not seem that significant, but the devil lies in the details. As the details of the two chambers’ budget bills begin to emerge in early April, we will see similar budget amounts. However, we will also see significant differences between how each chamber wants to invest those dollars.

So where do the GMNP’s priorities currently lie? The bulk of our work falls into two funding areas defined by the state agencies that manage them: programs administered by the Department of Employment and Economic Development (DEED) and programs administered by the Minnesota Housing Finance Agency (MHFA).

First, let us look at proposals under MHFA, as these numbers are easier to compare apples to apples. All three budget plans begin with the same base of $115.5 million. The House budget framework will add an additional $30 million into the agency’s programs, while the Governor’s budget adds only $14 million. The Senate recommendation maintains the agency’s budget and does not add any new money. Even with no new money from the Senate, their bill will likely move funds between housing programs.

Comparing the DEED budget becomes much trickier as both the House and Senate have more than one committee that funds these programs, so it is a bit like comparing apples and oranges. The good news is, all three propose investing significant new resources into programs that support economic development, economic growth, and job creation. The Governor’s budget proposes adding $70 million, the Senate adds $100 million, and the House adds $117 million. We will need to wait until omnibus bills are released to see what programs those proposed investments will support and what impact they will have in Greater Minnesota, but it is promising to see that all three budget plans include significant new investments.