Budget targets released, deadlines looming |
Late last week, Senate Democrat leaders and House Republican and Democrat leaders released their budget targets, a full week earlier than expected. These targets will guide the finance committees in the work on their budget bills. The House targets disregard the inflation adjustment in the February forecast and make a net cut of $14.4 million in baseline spending for FY 2026-2027. Cuts in environment ($10M), health and human services ($350M), and workforce ($50M) offset spending in other areas. Notably, the tax target has a net change of $40 million in tax increases or reduction in tax expenditures or tax-related aid programs. The Senate targets also disregard the inflation adjustment and make a net cut of $389 million. The largest cuts come from health and human services ($534M) and transportation ($227M) to offset spending in other areas, such as an increase of $100 million in higher education. The Senate tax target has a net change of $365 million in tax increases or reduction in tax expenditures or tax-related aid programs. The deadline for policy bills is this upcoming Friday, and the committees must finalize their budget bills by April 11. |
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ISSUES IMPACTING THE BUSINESS COMMUNITY |
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- Minnesota businesses have faced 35+ new unfunded mandates the past two years, with the Sick and Safe Time (SST) mandate yielding increased costs and unintended consequences - hitting small businesses hardest.
- Progress was made on bipartisan fixes to SST and PFML in the Senate recently. The provisions of SF 2300 (Sen. Seeberger, DFL; Sen. Rasmusson), bipartisan legislation containing a number of the Chamber’s SST toplines, were offered as an amendment to the Department of Labor and Industry Policy bill and passed with bipartisan support in the Senate Human Services Committee. The Chamber’s toplines on PFML have been introduced as SF 3141 (Sen. Frentz, DFL; Sen. Rasmusson, GOP).
- With the recently announced Paid Family and Medical Leave (PFML) payroll tax rate of 0.88 percent, PFML is a nearly $2 billion annual tax on workers - businesses need more time to be implemented responsibly. Rushing it risks higher costs, tax hikes, economic harm and potential benefit and payment mismanagement for employees. The House Workforce and Labor Committee continues to discuss the program and a number of the toplines recommended by the Chamber are under consideration.
- We urge lawmakers to take a balanced approach that protects jobs, businesses and our economy while supporting workers.
- If you haven’t taken the opportunity to share how these workplace mandates are negatively impacting your business and your employees, state policymakers need to hear from you – and it couldn’t be easier! Click here to customize an introductory email and share your story today! You can also take this opportunity to share your support for the Chamber’s policy recommendations for SST and PFML:
- PFML recommendations:
- program launch delay; program scoping modifications and program integrity (e.g. total number of weeks; weekly benefit formula; definition of "family"; reduced premium cap etc. – all items the business community advocated for in 2023 and 2024); private plan viability and functionality issues (e.g. benefit equivalency standard); seasonal employee definition fix and to cover all industries; fixing intermittent leave issues; and possible exemptions.
- SST recommendations:
- repeal the “more generous PTO” change; adjusting notice and documentation provisions and addressing SST misuse issues (employer workability concerns); frontloading fix; and possible exemptions.
- A number of bills – including bipartisan and bicameral efforts - have been introduced that address a number of items from the Chamber’s SST and PFML recommendations:
- SST: HF 1325 (Rep. Schultz, GOP); SF 310 (Sen. Dornink, GOP); SF 2300 (Sen. Seeberger, DFL); and HF 1542 (Rep. Schultz, GOP).
- PFML: HF 1976 (Rep. Baker, GOP); HF 11 (Rep. Baker, GOP); and SF 1793 (Sen. Housley, GOP)
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- Last week, the Chamber's Bentley Graves testified in the Senate Health and Human Services Committee on health insurance mandates.
- Minnesota is home to the second-longest list of mandated benefits in the country.
- Each of these benefits was put in place to help people. But each also comes with a cost.
- Because of this, we have long encouraged the Legislature to show restraint when proposals are brought forward to add new mandates to state statute. But admittedly, this is a tough ask.
- If policymakers decide that there is a public health imperative for additional benefits, we encourage the Legislature to marry up its consideration of new mandates, like these, with SF 565.
- This type of approach offers the state the opportunity to invest in the health of those seeking them, while also ensuring costs for those who rely on coverage in the state’s fully insured market don’t increase as a result.
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- Last week, the Chamber's Bentley Graves testified in the House Transportation Committee in support of using MnDOT's efficiency savings to fund projects in the Corridors of Commerce Program.
- Current law requires MnDOT to redeploy these savings for “construction, maintenance, or rehabilitation of trunk highways, including roads.”
- However, historically, MnDOT has had some difficulty identifying where these savings have been reinvested into the system.
- In an effort to increase transparency into this process and better track the reinvestment of these efficiency savings going forward, HF 712 would require MnDOT to reinvest these efficiency savings into projects through Corridors of Commerce – a program that has strong, bipartisan, bicameral support and that has advanced many important projects around the state for nearly a decade.
- This is a bill that builds upon the great work MnDOT has done for the better part of the last decade to maximize efficiencies in its program.
- Putting these efficiency savings to work, providing the resources needed to advance critical projects around the state through the Corridors of Commerce program, makes sense.
- And doing so will help to build continued support for, and increased transparency around, the Department’s work to stretch the taxpayer dollars invested into our transportation infrastructure.
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Environment and natural resources |
- The Chamber's Andrew Morley testified in opposition to HF 1208, legislation offered by the Walz administration and carried by co-chair Rep. Peter Fischer of the House Environment and Natural Resources Finance and Policy Committee that would actually make permitting timelines longer, costlier and less certain.
- The bill creates a new, duplicative authority for modeling and allows the agency to report out better statistics with no improvement.
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Last week, the Minnesota Chamber's Michelle Benson testified in opposition to a bill, HF 2149, to remove contract and competition protections from Minnesota law.
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DEED is hosting public events, hosted by local chambers of commerce, around the state to share updates about Minnesota's upcoming paid family and medical leave. Current dates include: Monday, April 14
National Sports Center
Blaine
Wednesday, April 16
CHS Field
St. Paul
Wednesday, April 23
Lost Spur Golf Club and Event Center
Eagan
Wednesday, May 7
Shoreview Community Center
Shoreview
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| 2025 Chamber Day at the Capitol
Thursday, April 3, 9:00 a.m. - 11:30 a.m. |
Why you should attend: This is your opportunity to ensure policymakers understand the real-world effects of their decisions and to help shape policies that foster growth and opportunity for all Minnesota businesses. Your voice is needed now more than ever! |
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| 2025 Washington, D.C. Fly-in
Wednesday, June 11 - Friday, June 13
Washington D.C. |
Why you should attend: You’ll meet directly with Minnesota’s congressional delegation, hear from administration officials and gain exclusive insights from organizations like the U.S. Chamber.
Don’t miss your chance to make Minnesota’s voice heard in the nation’s capital! |
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