Lawmakers Wrap Up Work on State Budget

Posted on July 7, 2021 by Kari Thurlow

With a final push and some surprise twists, Minnesota lawmakers dodged the threat of state agency and services shutdowns, just barely meeting their deadline to pass a $52 billion state budget. Wednesday at 11:59 p.m. was lawmakers' deadline to get all 13 of their state budget bills through both chambers of the Legislature and to Governor Walz's desk for his signature. Governor Walz has signed the 12 budget bills and the tax bill, averting the potential disaster of state agency shutdown.

To find a compromise between the nation's only divided Legislature proved difficult, with the Democratic-controlled House and Republican-controlled Senate leaders negotiating with Walz's office for weeks behind closed doors. This was a challenging session, made more complicated by the pandemic, as lawmakers addressed urgent, emerging issues due to the public health emergency while also trying to position the State to emerge from the pandemic stronger. The State's financial outlook shifted dramatically throughout the legislative session, from a projected $1.5 billion deficit in November to a projected surplus in the latest revenue reports. The federal government also helped the stated budget outlook, providing more than $2 billion in state aid through the American Rescue Plan. However, guidance on how states could spend that money came late in May, making it difficult for lawmakers to factor in that money into state budget plans. The additional federal funding and stronger state budget picture, in general, meant that provider cuts were largely off the table.

In the end, we view the 2021 legislative session as largely successful in addressing our key priority issues. This was due, in large part, to the tremendous grassroots advocacy efforts by LeadingAge members. More than 5,000 advocacy messages were sent to lawmakers during the 2021 legislative session. Because of this advocacy, lawmakers took the following actions:

• Lawmakers established a dedicated fund of $230 million to provide direct payments for essential workers. The pool of eligible workers will still need to be defined by a working group, but long-term care employees must be included. 
• Lawmakers made more than $69 million in new investments in the Elderly Waiver (EW) program, which will help close the gap between reimbursement rates and costs. Lawmakers also invested nearly $25 million of additional funding for providers with very high EW caseloads.

• Lawmakers invested $44 million in disability waiver rates by moving up planned rate adjustments through the DWRS system.
• Funding doubled for the existing Customized Living Quality Improvement Grants, with $500,000 in additional annual grant funding for a total of $1 million per year available.
• Lawmakers made permanent investments in the nursing home moratorium exceptions projects at $4 million per biennium. We estimate that this will cover approximately $200 million in new construction each year.

LeadingAge MN advocacy is powerful, but our work is not done. Lawmakers will have to come back in September to approve details of a distribution plan on hero pay for essential employees. Between July and September, senior care providers will need to continue to make the case that the senior care sector should be considered a critical priority for these funds. 

We will be breaking down all of the details of the 2021 legislative session at our Legislative Wrap Up webinar on July 14 from 1–2:30 p.m. This webinar is free for all LeadingAge MN members, and we hope you will join us for an in-depth analysis. Register today!