Gov. Tim Walz July 1

Gov. Tim Walz signs the two-year budget into law on July 1, 2021

(The Center Square) – The Minnesota Legislature passed a two-year, $52 billion budget just hours before a possible government shutdown.

“Tonight, I am proud to sign legislation that invests in our students, bolsters public safety, and builds a stronger economy,” Gov. Tim Walz said in a statement. “This legislation will help small businesses create jobs, allow our students to catch up on learning, and make our communities safer for every Minnesotan.”

Gov. Tim Walz signed five more bills into law:

  • Bonding bill: modifies local projects of the 2020 $1.9 billion bonding bill.
  • Jobs and Labor bill: The $425 million bill gives $80 million to Main Street Economic Revitalization; $70 million for the Main Street COVID-19 Relief Grant Program and $10 million in childcare funding
  • Public Safety and Judiciary bill: The $122 million bill restricts the use of no-knock warrants, increases mental health response in crisis calls, reforms civil asset forfeiture and provides body cameras for law enforcement at the Department of Public Safety and Natural Resources.
  • State Government bill: The $198 million bill gives $7.2 million to the governor and lieutenant governor’s office, $24 million to the state auditor’s office, and disburses other money multiple other state agencies and public radio and television
  • E-12 Education bill: The $1.2 billion plan for education over four years gives the largest formula increase in 15 years and funding for students receiving special education and English learner services. It also includes $35 million to obtain and retain more teachers of color in classrooms. 

The House and Senate also passed a $944 million tax bill to jumpstart the economy to recover from COVID-19. The bill included Paycheck Protection conformity so Minnesota won’t tax businesses who accepted federal money. It also gives roughly $1 billion in tax cuts. The tax bill doesn’t have a July 1 deadline.

“This tax bill will go a long way to help working families and our small businesses bounce back from the pandemic,” Sen. Tom Bakk, I-Cook, said in a statement. “It was an honor to once again help construct this bill as a member of the Tax Committee. This robust package will deliver significant relief to those hit hardest by COVID-19.”

The bill fully exempts federal pandemic unemployment benefits up to $10,200.

Bill highlights:

  • The Frontline Workers Grant program working group recommends disbursement of $250 million as a direct cash benefit to frontline workers. Senator Bakk’s provision that provides for a PILT for parcels added to the Lake Vermilion state park
  • The bill extends the Angel Tax Credit by $5 million for emerging tech startups
  • The bill extends the Historic Structure Rehabilitation Credit

“Taxing our struggling small business owners who did the right thing, by keeping their workers on payroll, never made any sense,” Bakk said. “Small businesses and their workers are the lifeblood of our communities, and we can never afford to take them for granted. I am glad to see the final tax bill include my common-sense conformity provisions.”

Staff Reporter

Scott McClallen is a staff writer covering Michigan and Minnesota for The Center Square. A graduate of Hillsdale College, his work has appeared on Forbes.com and FEE.org. Previously, he worked as a financial analyst at Pepsi.