Minnesota Legislative Session 2026

In an election year session with divided government expectations were generally low coming into this legislative session, especially given that while the February Forecast showed a surplus in the forecast window state spending remained higher than revenues. Historically the legislature has passed a narrower agenda during election years, narrower still when there’s divided government or structural budget issues. Despite those challenges and a process as opaque as ever, the House and Senate managed to pass significant legislation, including county priorities like a $1.2 billion bonding bill, an IT modernization bill that provides county specific projects and much greater county oversight of spending, and one time money to buy time until next year on addressing other county issues like responding to the unfunded federal mandate changes related to SNAP and resourcing the African American and Family Preservation and Child Welfare Disproportionality Act. The IT Modernization bill in particular was a standout of the session, with $90 million appropriated and the possibility of future revenue growth being dedicated to an IT modernization fund with county oversight as well. The bill passed both chambers unanimously.

While ongoing funds were difficult to come by in any committee outside of these top priorities, we also managed to avoid damage on other fronts. In 2025 there were hundreds of millions of dollars in cost shifts from the state to counties in consideration, but those proposals had no momentum this year. Though the tax bill was tasked with raising $353 million in FY 28-29, we did not see any proposals to cut County Program Aid, Payment in Lieu of Taxes, or Aquatic Invasive Species Aid. Despite record high county levy increases in 2026, MICA worked with tax chairs and members behind the scenes, so while bills imposing levy limits were introduced this year, none of them received a hearing. After a last-minute effort in 2025 to reduce the county share of the metro regional transportation sales tax was stopped in the hours before special session began, proponents of the plan conceded that it would not move forward in 2026.

Yet the picture for 2027 at the capitol presents substantial challenges no matter the political composition of the House, Senate, or Governor’s office. The cost shifts from unfunded federal mandates that passed Congress in 2025 are going to impact county budgets even more acutely and one time money that the legislature passed this year will have elapsed. Securing ongoing funding to address the SNAP administrative and benefit cost shifts that are coming our way will be one of the most significant requests that counties bring forward in 2027. The one-time money the state provided to all 87 counties to resource and implement the African American Family Preservation and Child Welfare Disproportionality Act will have elapsed, and the case review deadline will be imminent.

We saw the statewide average county tax levy increase at a higher percentage in 2026 than it had in the last 25 years, which in turn is creating more pressure on the legislature to address rising property taxes. But legislators in Saint Paul and the Governor have been reticent to spend ongoing general funds the last two years, citing their own budget issues. This has opened the door for some at the capitol to bring forward ideas like levy limits, valuation caps, and other “no cost” (to the state general fund, not to counties) property tax proposals that would do ongoing damage to the state property tax system and county budgets. And budget pressures exist outside of the general fund as well. One side of the political aisle is trying to gain popularity by proposing cuts to taxes that fund important transportation projects and the other supports redistributing transportation funding formulas to force local governments to redirect their infrastructure investments to their preferred modes.

On top of that, cost shifts that were punted to task forces that are charged with coming up with recommendations to reduce spending (e.g., Long Term Services and Supports) are seeing those deadlines approaching. Without language that specifically states in statute that the identified savings are to be attributed to the LTSS mandate, those cost shifts (totaling about $177 million) onto counties and providers will go into place.

Much of what happens will be dictated by the elections in November, but no single political party or election is a panacea to these looming issues. What we found in 2025 is that counties can successfully combat even the most significant cost shifts when they speak with a unified voice. We saw that unity at play again in 2026, when the largest single appropriation identified by legislative leaders was for a county priority: IT modernization. These successes demonstrate that when counties speak together with a loud and consistent message, they can break through other political rhetoric. So regardless of what happens in the November elections that will be our focus in 2027.