Minnesota leaders announce with budget agreement with rollbacks of health coverage for undocumented immigrants, sparking pushback
Legislative leaders in a divided state capitol on Thursday announced a roughly $66 billion budget framework to fund the government and its services, which also includes spending adjustments to make a dent to the looming $6 billion in the future.
But the agreement—reached by DFL Gov. Tim Walz, GOP House Speaker Lisa Demuth, DFL Senate Majority Leader Erin Murphy and former DFL Speaker Melissa Hortman—includes significant policy concessions that could derail leaders' hope to get most of their work done on time.
Under the compromise, adults who are undocumented immigrants will no longer be eligible for health coverage under MinnesotaCare, a program for low-income Minnesotans, sparking fierce pushback.
Children will be held harmless. Republicans had initially sought to repeal eligibility for all because of concerns about costs. One in four enrolled are under the age of 18, according to data through April, according to the Department of Human Services. Enrollment began in January.
"It's not a measure of being uncaring. It's a fiscal issue, and there are still opportunities. Those Minnesotans that are here, those that are here illegally—they can still join the private market," Demuth, R-Cold Spring, said.
During the budget announcement, progressive lawmakers and members of the People of Color and Indigenous Caucus rallied outside the governor's office amid the announcement Thursday, chanting "one Minnesota, right?" and "don't kill our neighbors."
They vowed to vote against legislation with the rollback of coverage. DFL leaders acknowledged their deep opposition.
"Our caucus is full of immigrants and children of immigrants, and this is a deeply personal issue. They know people who are receiving medical care, whose lives were saved because of access to MinnesotaCare for undocumented immigrants starting on January 1," Hortman, chants echoed outside the room.. "They know these individuals' lives are threatened by the removal of that health care. It is personal. It is visceral. And it is warranted. "
Those against eliminating MinnesotaCare coverage for some undocumented immigrants in their own news conference vowed to reject the provision, which could complicate the final few days of session.
"It costs hospitals more money. It puts our health care system in disarray. It makes our health care system weaker. Of course, families fall into poverty," Sen. Alice Mann, DFL-Edina, said. "So there is no economic argument to be made when we take away people's health care. So what they did was purely cruel. It was cruelty dressed as fiscal responsibility."
Smaller panels of lawmakers will use those top-line figures leaders revealed Thursday to frame negotiations on individual spending plans to make up the next two-year state budget, which the Legislature must approve before session ends or they will go into overtime.
"We may have differences, but we have not succumbed to the idea that we let dysfunction rule, and that democracy and compromise are still seen as virtues and not vices," Walz said.
The agreement comes days after closed-door negotiations to hash out differences in divided government for the first time in two years following a DFL trifecta in the House, Senate and governor's office during the 2023 and 2024 sessions.
"The global targets that we have come up with today demonstrate that in this division in the legislature, so closely divided, that we have agreed to do what is best for Minnesotans and actually making some hard decisions, but doing overall what is best," Demuth said.
The Legislature is more evenly split than any other time in recent history with 100 Republicans and 101 Democrats in both chambers. The House is tied and the DFL has a one-seat majority in the Senate.
Notably GOP Sen. Minority Leader Mark Johnson, R-East Grand Forks, didn't sign the agreement.
"Senate Republicans worked to put Minnesotans first by cracking down on the waste and fraud that's grown under Democrat control, while advancing commonsense, bipartisan reforms to cut government red tape," he said in a statement. "While the final deal includes some needed reforms, it falls short of acknowledging we need bipartisan support to stop the harmful progressive policies hurting small businesses and working families."
Other sticking points in negotiations were unemployment insurance for hourly school workers and the paid family and medical leave program set to take effect next January, which the GOP sought to delay or overhaul.
Leaders said the jobless benefits for bus drivers, school aides, and food service workers will remain intact and there will be a 0.1% reduction in the payroll premiums businesses must pay to support the paid leave program.
Murphy and Hortman admitted to reporters earlier this week that a special session was likely inevitable with a deal arriving so close to the May 19 deadline. Hortman said Thursday she hopes the budget deal puts lawmakers in a good position to get most of their work done over the weekend and have a short one-day special session if it isn't all complete.
But because of pushback to the MinnesotaCare changes, passage of bills could get stuck and add further delays. Democrats who said they reject that provision didn't say whether they would hold up other parts of the budget to hold the line and block that provision.
"[DFL leaders] made the political calculus to do the least harm. We think this is a major harm to tens of thousands of people, so we don't agree with that," said Rep. Cedric Frazier, DFL-New Hope.
