How to spend $7.75 billion dollars, and other challenges at the 2022 Minnesota legislative session

ST. PAUL — The Minnesota Legislature will kick off the 2022 legislative session Monday, Jan. 31, and many questions hang in the balance as legislators take up their work.

Lawmakers will again navigate the best ways to help Minnesotans manage the pandemic, weigh more than $5.5 billion local projects around the state and consider a swath of state law changes.

And they'll likely spend months debating the best use of a $7.75 billion budget surplus.

Their decisions could result in tax relief for Minnesotans, new COVID-19 restrictions, rewrites of the state's minimum criminal sentences, more child care slots open to young children and more.

Before legislators return to St. Paul, here’s a quick rundown of what you need to know.

The Legislature remains divided with Democrats controlling the House of Representatives and the governor’s office. Republicans hold a lead in the Senate.

That means that overly partisan policies or spending priorities will likely fall away this year; the items where both sides can agree will advance.

But that doesn’t mean lawmakers will set aside things they care most about or that they hope to tout on the campaign trail.

Legislators seeking another term in their positions or vying for higher office will push policies that can help boost their reputation with their base or try to tear down that of an opponent. And that will likely be clear in the Senate, where a pair of GOP gubernatorial hopefuls aim to illustrate why the state should elect them rather than returning Gov. Tim Walz to the office for a second term.

Two new leaders in the Senate could also factor into end-of-session deals or blow-ups depending on their ability to negotiate: Senate Majority Leader Jeremy Miller, R-Winona, and Senate Minority Leader Melisa Lopez Franzen, DFL-Edina.

They must work with Walz, House Speaker Melissa Hortman, DFL-Brooklyn Park, and House Minority Leader Kurt Daudt, R-Crown.

Majority Leader Miller moved into his role last year after former leader Paul Gazelka, R-East Gull Lake, stepped down to pursue a run for governor. Miller has said he would work to put aside the rhetoric and political talking points to get things done in St. Paul.

But Miller, Hortman and Walz have yet to build a strong working relationship. And Miller refused to drop the Senate’s option to terminate Walz administration commissioners as a condition of coming back to take up hero paychecks for front-line workers or drought relief for farmers.

In the days leading up to the legislative session, all three used campaign talking points to make a case for their own priorities and to push back on the opposite political party.

Lopez Franzen could prove a key figure in passing a local projects bill or other proposals in the narrowly divided chamber.

A surprise infusion of state income tax and corporate tax inputs last year set up a historic surplus for the state.

And ahead of the legislative session, stakeholders, leaders, and others have debated the best way to spend the roughly $7.75 billion excess. The issue quickly flew to the forefront and is expected to take up much of the focus at the Capitol over the coming months.

Democrats and Republicans put in their initial bids for the best use of the money, with GOP lawmakers urging a permanent tax cut, while Democrats proposed a range of tax relief and spending increases for state agencies and programs.

This is the third legislative session affected by COVID-19. Lawmakers will return as the state sees its largest surge to date in new hospitalizations and deaths from the illness due to the omicron variant.

Legislative leaders said that some of their first priorities would involve getting resources and additional regulatory relief out to hospitals and long-term care centers as they bear the brunt of the pandemic’s latest wave.

And they’ve committed to working together to help address the pandemic, as well as to offer support payments for those who’ve worked to help end it.

Over the summer, a state panel attempted to decide how to send out $250 million to front-line workers who’d remained on the job during the pandemic. But Republicans and Democrats split over who should be eligible.

Republicans have said they want to see the $250 million go to nurses, first responders and others who worked directly with COVID-19 patients.

Democrats, meanwhile, said that with a substantial budget surplus, they should grow the pool of dollars that could go out to front-line workers. They proposed payments for a broader group of people who remained in person during the pandemic.

Debates around requiring vaccines for certain positions or masking to limit the spread of COVID-19 could also arise, as could a discussion about how natural immunity after being sickened with the coronavirus should factor into pandemic restrictions.

The legislative chambers too will likely look different than in years past as lawmakers and staff grapple with the ongoing pandemic. Hearings and floor debates in each chamber will have an at-home option for lawmakers that don't feel safe participating in person.

There’s only one thing the Legislature has to get done this legislative session: Redraw the state’s political maps.

But even that comes with a caveat.

Assuming lawmakers follow historical precedent and fail to come up with compromise maps of the state’s legislative and Congressional districts before Feb. 15, a judicial panel will step in and publish the new boundaries.

Legislators got a late start re-charting the districts last year because of a slow rollout of the 2020 U.S. Census data. And they’ve so far split on partisan lines about the best way to reconfigure Minnesota’s political boundaries.

Whether determined in the Capitol or the courts, the new boundaries will stand for the next decade and they could shake up political power dynamics.

The Legislature in even-numbered years focuses on writing a borrowing bill to fund state agencies and local community projects around the state. At the Capitol, it’s known as the bonding bill.

And after approving the state’s largest bonding bill in history in 2020, Democrats in the House of Representatives and the Governor’s Office said the state should again make big investments in local projects and jobs.

House Democrats said they’d propose a $3.5 billion plan aimed at asset preservation, affordable housing and increasing equity-focused projects while the Walz administration pitched a $2.7 billion package focused on addressing deferred maintenance in state buildings, boosting broadband access and mitigating the impacts of climate change.

The state’s finances indicate that the state has the capacity to borrow as much as $3.5 billion for a bonding bill. Requests for funding came in around $5.5 billion.

But Republicans and Independent lawmakers said the state should aim for a lower figure than what DFL leaders pitched. They said they would wait to counter a DFL plan until one emerged in the House.