Midpoint in the 2021 Legislative Session: What’s Happened and What’s Next

Posted on March 31, 2021 by Kari Thurlow

Minnesota’s 2021 legislative session is at the midpoint, as lawmakers are on break this week in observance of the Easter and Passover holidays. When lawmakers resume legislative activity on April 5, it will be full steam ahead as lawmakers will push to pass budget and policy bills before the legislative session adjourns on May 17.

When the Legislature returns, lawmakers will have one week before Third Committee Deadline on April 9 to move appropriation and finance bills out of all committees, except for House Ways and Means, Senate Finance, and both Tax committees & Capital Investment committees. The House and Senate are expected to unveil their omnibus budget bills early next week and pass them out of committee by Friday.

While awaiting details for the House and Senate budget bills, Governor Walz released a detailed budget proposal in January and a supplemental budget proposal earlier this month in light of the improved budget forecast. Moreover, the House and Senate have set budget targets that will guide the development of their budget bills. Looking at this information, there are significant differences emerging between the House, Senate and Governor that may make end of session budget negotiations difficult. Currently, the House proposes to spend $52.5 billion, the highest among the three budget proposals. Governor Walz’s proposed budget is $52.3 billion and the Senate’s framework is $51.9 billion. The House and the Governor both propose tax increases despite a projected state budget surplus, while the Senate is seeking tax cuts and a 5% overall reduction to state agency budgets.

LeadingAge Minnesota and the Long Term Care Imperative have focused our priorities for the legislative session and the FY22-23 budget into two main categories: COVID-19 response and recovery and workforce recruitment and retention. We are hopeful that some of these proposals will be included in the House and/or Senate budget bills in the coming weeks.

A new dynamic in budget talks is the availability of new federal funds through the America Rescue Plan, which was passed by Congress and signed by President Biden earlier this month. The state is poised to receive significant funding through various dedicated funds. It is possible that Governor Walz will release a second supplemental budget proposal in early April that is focused on how the state should spend money that will be coming to Minnesota though the federal “American Rescue Plan.” However, there seems to be a growing disagreement between the Governor and the Legislature about whether the Legislature will have influence and oversight over the spending of this federal money.

We are working with key policymakers to shape how the state will prioritize and invest the estimated $8 billion of federal money coming to the state and local governments. We have sent a request to the Administration and legislative leaders requesting that they use American Rescue Plan money to address the following priorities:

Priority	Funding Source
“Hero Pay” for those who worked to provide essential LTC services during the pandemic. This is a one-time bonus for the roughly 55,000 employees of nursing homes and assisted living providers who have been on the front lines of the pandemic. Bonuses would go directly to employees.  The purpose of these bonuses is to recognize their extraordinary efforts and to help retain these essential employees. Estimated cost: $28 million.	State Fiscal Recovery Funds
Rate Enhancements for Elderly Waiver (EW) Rates. The ARP funds provide a unique opportunity to support and enhance home and community-based services for seniors by enhancing Elderly Waiver rates to better reflect the cost of care. Rates have not increased since 2019, although expectations for care continue to grow. This will also help compensate for the higher costs of care and revenue losses due to the pandemic. Estimated cost: $150 million.	10% Increase in FMAP for HCBS
Adult Day Providers Recovery Grants. The Adult Day sector was especially hard hit during the pandemic, including closure for several months. Even today, nearly 40% of the sector remains closed, which has reduced access to seniors throughout the state. Recovery funds are needed to revitalize this important service.  Address revenue loss due to closure and operating at reduced capacity for months. Cover costs related to Implementation of remote services. Investment needed for pandemic impacts-bonuses for staff, recruiting new staff as providers rebuild services, higher staffing costs during pandemic operations, hosting vaccine clinics, and start-up costs including securing space and hiring staff. Estimated cost: $5 million	State Fiscal recovery Funds or 10% Increase in FMAP for HCBS
Fund Nursing Facility Pandemic Costs Minnesota has utilized 12A.10 statutory authority to fund emergency expenses. Use funding to pay for allowable Pandemic costs.	General Fund

In these final weeks of the legislative session, it will be important for lawmakers to hear from you regarding our priorities for both the state budget as well as the spending of the American Rescue Act money from the federal government. As lawmakers begin to negotiate a final budget deal, we will be there every step of the way to ensure that our priorities are included. Please stay tuned for additional action alerts and budget updates in the coming days and weeks ahead.