The only split party Legislature in the nation will begin Tuesday, January 8th, 2019. Minnesota’s 91st Legislature must complete their work by midnight on May 21st. The odd-year session will primarily be focused on adopting the 2020-2021 biennial budget. In addition, Governor-elect Walz will be sworn into office on January 7th. The incoming Governor will give his State of the State Address in late January and must present his budget to the Legislature by mid-February.
Governor Dayton will leave Governor-elect Walz with a budget surplus of more than $1.544 billion for the 2020-2021 biennium. In addition to the budget surplus, the state’s budget reserves are now at a record setting $2.075 billion, following a statutory transfer from the budget surplus of $491 million. The state’s economic advisors suggest Minnesota’s long-term economic outlook remains sound. However, the state will face slower long-term growth than had previously been projected. Current economic indicators project the state will have a $456 million surplus in the 2022-2023 biennium.
The November Forecast will be used by the Walz Administration to prepare their budget proposals for the Minnesota Legislature. Governor-elect Walz will need to release his complete budget by February 19th. The next Budget and Economic Forecast will be the February Forecast which will be released in early March. The February Forecast will provide the economic parameters for the completion of the 2020-2021 biennial budget.
Beyond setting the biennial budget, the Walz Administration and Minnesota Legislature will attempt to address a handful of more complex policy and financial issues. The larger issues, while not limited to the following, will most likely include a long-term permanent funding increase for transportation, federal tax conformity and a solution to Minnesota’s opioid crisis.
The Association will be working closely with the leadership of Explore Minnesota to secure an increase in their base budget along with another $1 million in funding for the event grant program. We hope Governor-elect Walz will include the funding in his budget when it is released in February. Tourism funding was not discussed much during the 2018 Election and we are uncertain how Governor-elect Walz will receive the coalitions request for a nearly $5.77 million increase in Explore Minnesota’s base budget. The event grant program has enjoyed tremendous success in communities across the state and the request to double the programs funding should receive tremendous bi-partisan support at the Legislature.
In addition to our work on tourism funding, we will also be watching for efforts at the Legislature by local communities to use our funding for new projects or programs. We should face one less challenge this session with St. Cloud Mayor Dave Kleis’s recent announcement the city will no longer look to increase local hospitality taxes to fund improvements to their community center. Instead the city will be looking to have $16.2 million for the project funded in the next bonding bill adopted by the Legislature. The opposition of the MACVB to the proposal during the 2018 Session, certainly helped the city reach this decision.
We will continue to provide updates throughout the legislative session.