Passage of Budget Agreement Marks End of Contentious Year at Capitol

By MNR News posted 10-08-2021 06:51


illustration of a government building and a piggy bank on a scaleMNR scores advocacy wins in the areas of housing affordability and property rights

The 2021 Minnesota Legislative Session was not “normal” in any sense of the word. Zoom committee meetings, proxy and remote electronic voting, technology glitches, and COVID-19 cases all contributed to a surreal atmosphere for legislators, their staff, state agencies, lobbyists, the media, and the public.

With the only divided legislature in the country — Republicans control the Senate and Democrats control the House — Minnesota legislators faced many challenges to completing their work on time, even without COVID-19 looming over everything. Passing a new two-year budget was the “must-do” item for the Session, but strong philosophical differences over taxes and spending items made it unlikely that compromises would be reached by the constitutional deadline for adjournment on May 17.

When the State’s February Budget Forecast was released, legislators were pleasantly surprised to find that Minnesota expected a $1.6 billion surplus, a dramatic shift from earlier predictions of a $1.3 billion deficit for the next budget cycle. Yet despite the billions in federal aid that Minnesota anticipated from various COVID-19 recovery bills, the House, Senate, and Governor Walz struggled to reach a budget agreement.

On May 17, the final day of Session, Governor Walz, Senate Majority Leader Gazelka, and House Speaker Hortman announced that a global budget agreement had been reached. When the legislature returned on June 14 for a Special Session to work out the details, they slowly created detailed provisions. With a potential government shutdown looming as July 1 approached, legislators finally produced bills that could be passed and signed into law. The state budget was finalized on June 30, without a day to spare.

For MNR’s lobbying team, these were the busiest Sessions in recent memory. Lobbyists provided oral or written testimony 40 times before Senate and House committees in 2021, including 28 times via Zoom, supporting or opposing a variety of bills and issues. Key issues supported by MNR include passage of bills that:

  • Make it easier to sell and transfer affordable manufactured homes
  • Forego taxing forgiven mortgage debt for homeowners in difficult economic circumstances
  • Provide for federal tax conformity for Paycheck Protection Program loan forgiveness
  • Phase out of the state’s eviction moratorium*

    *This is intended to allow time for renters to apply for substantial emergency rental assistance available and will help housing providers recover rent that has gone unpaid.

MNR also worked to defeat bills that would have made homeownership more expensive, including:

  • New fees on mortgage registry and deed taxes
  • Park dedication fee authority that would increase the cost of housing
  • Well disclosure and testing requirements during property transfer
  • Street impact fees and street improvement districts that escalate the cost of housing during a severe housing inventory shortage
  • Burdening homeowners with additional taxes by disallowing the itemized deduction for mortgage interest on a second home


For all the details on key bills and issues, and how they were resolved, check out MNR’s 2021 Legislative Session Scorecard at: