We have now been in session for two months and are nearing the halfway mark of the 2019 legislative session.

The primary work within the first year of the legislative session is to prepare the budget for the next two years. Recently Governor Walz released his budget and bonding proposals, and at the end of February we received more information about the financial strength of the state when the Minnesota Management and Budget’s (MMB) economic forecast was released.

MMB forecasted a $1 billion positive balance, $492 million lower than the November 2018 forecast.

MMB gave multiple reasons for the surplus shrinkage. Revenue is down $198 million since the November forecast, and economic growth has been slower than projected. Other concerns MMB cited include trade policy uncertainty, slow labor force growth, and low tax collections. All of these elements suggest that it’s possible for Minnesota to have a deficit for the 2022-23 budget. The budget decisions we make today will need to consider the benefits and consequences for years to come.

Some of the complications surrounding Minnesota’s economic forecast come from what are actually positive numbers. Unemployment is down and retirements are increasing, but because of this we’re facing a workforce shortage that is hindering the ability of businesses to grow. The Minnesota House is already moving legislation that invests in education, transportation, and jobs; all areas that would help improve our economic future.

With this February forecast and our new understanding of Minnesota’s economic future, our work in committees now turns to crafting budget packages for the next two years. We’re currently working towards our first legislative committee deadline of March 15. That deadline is for committees to act favorably on policy bills in the House or Senate. The second committee deadline is for acting on companion bills that met the first deadline in the other body (House committees address companion legislation that passed in Senate committees and vice versa), that deadline is March 29. The third committee deadline is April 12, when committees are required to act on major appropriation and finance bills. After this deadline the legislature will take a week long break for Easter and Passover.

By the beginning of May, all finance bills need to be passed off the House and Senate floor before they’re sent to conference committees. In conference committees, appointed House and Senate members work with budget-influenced fiscal targets to craft the final forms of legislation that must return to both the House and Senate for another vote by May 13. The final step will be when the bills reach the Governor for his signature or veto. The last day of the legislative session is May 21. Our work will continue for the next 11 weeks in order to ensure that Minnesota has a financially stable budget into the future.