May 14 Legislative Update

Good morning MICA members,

Last night legislative leaders released agreed upon targets for chairs and committees to move to completion by midnight on Sunday.

High Level

While these are just targets and we do not yet have any details about what will go into these bills, these targets are much more specific than you typically see from legislative leaders. Usually targets from leaders are relatively round, to the nearest million, not down to the thousand. That indicates that many of these bills have a spending framework already reached at the leader level, with chairs just filling out policy items.

That makes it more likely that bills can pass by midnight if there’s less for chairs to negotiate, but also makes it more difficult to impact changes if a lot of these bills already have spreadsheets that are largely agreed to.

The overall general fund impact is a one time increase in spending or reduction of revenue of $659 million in FY 26-27 and a savings of $294 million in FY 28-29. The agreement leaves a positive balance of $11 million in FY 28-29, or a little over $2 billion if discretionary inflation is not factored in.

MICA Priorities

IT Modernization
The agreement includes $75 million in FY 26-27 and $15 million in FY 28-29 or IT modernization at the state and county level. This bill is traveling separately from other omnibus bills, via HF4808. The bill creates a Modernization Council with four county appointees to advise state agencies and the legislature on IT modernization spending. It also creates an ongoing fund to ensure that when there’s a current biennium surplus that there is a mechanism for future IT investments in future years beyond the $15 million that’s directly allocated.
Counties worked closely with the authors on the project list to ensure that not only is there oversight from the advisory council, but the authorizing language is more specific than past iterations so that county projects are included. The bill also includes a legislative commission that the council will report to.

Importantly this bill is traveling separately on its own from other omnibus bills. It was passed out of House Ways and Means  committee this morning, with strong support from both sides of the aisle.

SNAP and MAAFPCWDA
We are still figuring out the exact details on to what extent our requests on SNAP and MAAFPCWDA are reflected in the agreement. They are not specifically called out one way or the other publicly. Our requests on these proposals were in play through their inclusion in SF4612 which is in conference committee, and can be scaled to fit into a target if needed.

Bonding bill
The agreement includes general funds to cover the debt service for a bonding bill of about $1.2 billion. We do not yet have details on the size of the bonding bill but all four caucus leaders have said they will support a bonding bill to get the 3/5 majority needed to pass it.

 

Some other known details of the agreement include:
  • One time increase to the homestead credit refund that will go out this fall
  • One time reduction to tab fees paid out of the general fund
  • $205 million in one time funding for Hennepin County Medical Center
  • $500 million from the budget reserve to fund a “hospital reserve account”

 

We will have more detail in future updates.

Thanks,
Nathan