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Minnesota legislative leaders reach multi-billion dollar unemployment insurance, worker paycheck deal

Legislative leaders on Thursday morning told MinnPost that they'd reached a tentative deal on the two big issues and planned to bring the plan to the floor in each chamber later in the day.

Senate Majority Leader Jeremy Miller
Senate Majority Leader Jeremy Miller, left, and Sen. Karin Housley, right, speak with reporters at the Capitol on Thursday, April 28, 2022.
Dana Ferguson / Forum News Service
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ST. PAUL — Minnesota legislative leaders have reached a tentative deal to roll back a tax hike on Minnesota business owners and to send out hero pay checks to front-line workers.

House Speaker Melissa Hortman, DFL-Brooklyn Park, and Senate Majority Leader Jeremy Miller, R-Winona, said they'd reached a deal to repay the federal government for the loan Minnesota took out to pay unemployment benefits during the pandemic and to repay the state's unemployment insurance trust fund. The made the announcement during a Thursday, April 28, public discussion with MinnPost .

The move would prevent a payroll tax hike for Minnesota businesses and allow those who already paid the higher tax to get that excess back. And 667,000 front-line workers could stand to see $750 bonus checks under the compromise plan. Eligible workers would include health care workers, teachers, meatpackers, corrections officers, first responders, grocery store workers and several others who remained on the job in person amid the height of the COVID-19 pandemic.

The legislative leaders said they hoped to bring the bill to the Senate floor Thursday evening and to the House early Friday. From there it could travel to Gov. Tim Walz's desk for his signature later Friday. The bill came up for conference committee consideration around 8:30 p.m.

To be eligible, workers would have had to work 120 hours between March 15, 2020, and June 30, 2021, and not have drawn down unemployment benefits for more than 20 weeks. There would also be an income cap of $85,000 for individual filers who did not work directly with COVID-19 patients to be eligible. Those who worked with COVID-19 patients could receive the checks if they make $175,000 or less a year.

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The state would require workers to apply and show some verification of their work and could have checks turned around for workers within a matter of months, according to Minnesota Department of Labor and Industry estimates.

"It is a recognition that some people's service was extraordinary," House Majority Leader Ryan Winkler, DFL-Golden Valley, told reporters at the Capitol. "It is akin to recognizing soldiers coming home from the war. These people were on the front lines and they deserve a hero's welcome and that's what we're offering with these checks."

'Work together to get things done'

The agreement had been weeks in the making and Minnesota business owners sat on the cusp of a hard deadline Saturday, April 30, to pay the extra tax because the state's jobless fund had not yet been topped off. The GOP-led Senate in February approved the $2.7 billion plan to repay the unemployment fund but lagged on putting funds to front-line worker checks. Meanwhile, the DFL-controlled House passed $1 billion aimed at boosting front-line workers in March but waited until this week to approve the $2.7 billion repayment plan.

"It took a little bit longer than we hoped but the final deal is a good deal for the people of Minnesota and we're happy to get it done," Miller told reporters at the Capitol later Thursday morning.

Miller said that a compromise plan crystallized late Wednesday night after legislative leaders spent several days better understanding one another's positions and priorities. And both he and Miller said the deal bodes well for the state as lawmakers enter the home stretch of the legislative session.

"Now that sort of clears the decks so we can negotiate budget issues,” Hortman said Thursday. “I feel like we’ve established a pattern of being able to work together to get things done ahead of the real game, which is in May.”

House Speaker Melissa Hortman
Minnesota House Speaker Melissa Hortman, DFL-Brooklyn Park, on Thursday, April 28, 2022, speaks to reporters about a compromise proposal reached a night prior during a news conference at the Capitol.
Dana Ferguson / Forum News Service

Minnesota business groups and labor unions who'd spent months lobbying lawmakers for their respective priorities on Thursday said the agreement was welcome, albeit overdue.

"We're so glad that we were able to get this finished," Minnesota Chamber of Commerce President and CEO Doug Loon said. "But it is at the last moment and businesses will have or will be expected to pay their taxes and that means many will have overpaid."

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Department of Employment and Economic Development officials on Thursday said businesses would still be asked to pay the higher payroll tax rates by Saturday since a bill didn't come together in time to waive the deadline. But the bill would grant employers an extension through May to pay the bills and they could expect to see those higher rates credited back or refunded to them, assuming the bill passed through both chambers and was signed into law.

The agreement would also open up $190 million in federal American Rescue Plan funds to be used by the governor to respond to the COVID-19 pandemic while the remainder of the state's portion will be up to the Legislature to spend. House Democrats jettisoned a proposal to allow hourly school workers to pull down unemployment insurance benefits as part of the negotiations but said they would continue pushing for that plan in a separate bill.

The proposal uses a mix of federal American Rescue Plan Act funds and general fund dollars to pay for the trio of proposals. And it takes a bite out of the state's projected budget surplus. Lawmakers are expected to spend the next three weeks debating the best way to spend those funds.

MORE FROM DANA FERGUSON:
Several incumbent state legislators, particularly in the Senate, edged out competitors with more extreme views on COVID-19, election security and more.

Forum News Service reporter Alex Derosier contributed to this report.

Follow Dana Ferguson on Twitter  @bydanaferguson , call 651-290-0707 or email  dferguson@forumcomm.com.

Dana Ferguson is a Minnesota Capitol Correspondent for Forum News Service. Ferguson has covered state government and political stories since she joined the news service in 2018, reporting on the state's response to the COVID-19 pandemic, the divided Statehouse and the 2020 election.
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