Minnesota Gov. Tim Walz was expected to call for compromise in negotiations to replenish the state’s unemployment insurance trust fund and to pay frontline worker bonuses during his State of the State address Sunday.
Legislative leaders are deadlocked on the unemployment insurance issue, causing an automatic tax increase on employers statewide after lawmakers missed a March 15 deadline.
Walz criticized the Legislature this week for not reaching an agreement, saying lawmakers should have settled both issues in January and that he will provide a path forward during his address.
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“I’m going to call for us to get that done,” the Democrat said Wednesday. “Because the deadline is truly upon us, and it’s simply fiscally irresponsible not to deal with it.”
Senate Republicans want to use $2.7 billion to refill the trust fund. But House Democrats have tied that to a $1 billion proposal to give $1,500 checks to frontline workers who braved the pandemic, up from $250 million agreed to by both sides last year that wasn’t doled out.
Democratic House Speaker Melissa Hortman said Thursday that legislative leaders expect to resume negotiations Monday. She said she’s optimistic they can reach a deal by April 30, which is when tax payments are due for employers.
A spokeswoman for Senate Republicans did not respond to a request for comment.
The Democratic governor is also expected to highlight his proposed supplemental budget plan, which includes direct payments of $500 to single filers and $1,000 to joint filers that he’s dubbed “Walz checks.” His proposal also includes a $2.7 billion infrastructure package, in addition to tax, education and public safety spending.
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Walz’s annual address will be the last before he faces a stiff challenge from Republicans in the November election. He said he would thank “a whole lot of Minnesotans” for braving the worst of the coronavirus pandemic.
He was to deliver the address in the House chamber for the first time since the pandemic started. In 2020, Walz taped a shortened version from the governor’s mansion in St. Paul, and he delivered last year’s address from a classroom at Mankato West High School, where he taught before he was elected to the U.S. House.
During the final stretch of the legislative session, which adjourns May 23, lawmakers will have to figure out how to use the state’s $9.25 billion budget surplus and more than $1 billion in federal pandemic funds. The divided chambers remain far apart on spending and policy items. The GOP-controlled Senate is pushing for permanent income tax cuts, while House Democrats are seeking targeted tax credits and increases in spending.