In the very first Capitol Watch email of 2026, we wrote:
“If you want to know what Democrats and Republicans believe will be their best issues for the November election, look no further than the beginning of the 2026 legislative session. Democrats want the 2026 election to be a referendum on President Donald Trump. Republicans want the 2026 election to be about state government fraud.”
As they finished their work at midnight Sunday, the 2026 session played out as predicted. While House Republicans passed several key elements of their fraud agenda, (most notably the creation of an Office of Inspector General), Senate Democrats were not completely shut out, securing $40 million for rental assistance for people impacted by ICE.
Along the way, Hennepin County skillfully convinced the entire legislature that the financial well-being of the Hennepin County Medical Center (HCMC) was not only a crisis, but a state-level crisis. Once everyone agreed it was a state crisis, the $700 million bailout was a much easier sell. The good news is they didn’t extend or raise the sales tax to pay for it, as proposed by several DFL legislators.
Here is a quick look at the major policy and budget issues from the 2026 session.
THUMBS UP! 👍
Anti-fraud policy – As mentioned above, there is a new office of Inspector General to investigate fraud in state government programs. They also funded upgrades to the IT infrastructure used to administer many state welfare programs. The new technology will make it harder to defraud the state. And state agencies can now withhold payments to a program participant if it looks like the participant has committed fraud to obtain payments. American Experiment’s relentless focus on fraud in Minnesota state government programs helped drive these much-needed policy changes.
Tax cuts – Although small in number, tax cuts are always welcome. The percentage we pay on tab fees will revert back to 2023 levels for one year. And they added $125 million in one-time money for property tax reductions.
Nuclear energy study – American Experiment pushed hard this year to repeal the moratorium on new nuclear energy. For years Minnesota has had a weird fascination with hating anything having to do with producing electricity from anything other than windmills and solar panels. In 2023, Gov. Walz outlawed 80% of what stands between us and freezing to death with his Renewable Energy Standard. American Experiment’s “Nuke the Mandate” campaign scored an unprecedented victory against the “war on warm.” Clearly our billboards played a role!
The study will be conducted by the Great Plains Institute and will cover “the potential impact of new nuclear generation on the public interest of Minnesota, including affordability, reliability, environmental protection, and public health.” Rest assured, American Experiment will be watching closely as this work progresses. The study has to be delivered by January 2027.
Solving non-fatal shootings – Another priority for American Experiment was funding for the Minnesota Clearance Grant Program to address improving the solve rates for non-fatal shootings. Policy Fellow David Zimmer testified in support of the bill and participated in a joint press conference with stakeholders.
THUMBS DOWN! 👎
Bonding bill – They borrowed $1.2 billion for state infrastructure projects. Most of the money went to big categories like water infrastructure ($420 million), transportation ($177 million) and the University of Minnesota ($75 million). Sadly, they can’t seem to pass a boding bill without pork. Here’s a quick look at some of the projects that will be considered by the Golden Turkey Committee:
- Rum River Dam Modification and Reconstruction (past Golden Turkey nominee!) $4.696 million
- Minnesota Zoo $9 million
- Como Zoo and Conservatory – Big Cat Habitat $9.350 million
- Gammelgarden Museum of Scandia $200,000
- The Bridge for Youth in Minneapolis $1 million
- Center for Communications and Development in Minneapolis (KMOJ radio) $1 million
- Neighborhood Healthsource in Minneapolis $1.3 million
- Organizations of Liberians in MN Community Center in Brooklyn Park $400,000
- Roy Wilkins Auditorium in St. Paul $40 million, plus $10 million in planning money for Grand Casino Arena
Human Services spending – With President Trump and Congress leading the way with cost-saving policy changes in the Big Beautiful Bill, all Minnesota had to do was comply. While the legislature complied with work requirements and more frequent eligibility checks for Medicaid recipients, they insisted on holding everyone harmless. So instead of banking the savings, Minnesota will use state money to cushion the blow to recipients no longer eligible for Medicaid. Ugh.
Rental assistance – The legislature appropriated $40 million to the Family Homeless Prevention and Assistance Program. Democrats are saying the money is there to help people who were impacted by Metro Surge pay their rent. Republicans point out the money is available to everyone who is eligible for this ongoing program and is not tied to Metro Surge at all.
The post-session press conferences of legislative leaders said a lot about how the 2026 election will be framed.
Senate Democratic Leader Erin Murphy began with, “I read the New York Times this morning. President Trump’s approval rating now stands at 37%.” I guess we know where her head is at. Murphy went on to praise the bonding bill, rental assistance, housing money, property tax relief, HCMC bailout, tab fee reduction and fraud prevention. She said Senate Democrats took a “muscular approach” to fraud. Ok.
Speaker of the House Lisa Demuth reminded the press that the Inspector General bill was House Republicans’ top priority (HF 1) when the session began in February. She also praised the tax relief, HCMC bailout and IT infrastructure funding.
A reporter observed that Democrats talked mostly about things that didn’t get done and sounded defeated, while Republicans sounded like they “won” the session. Speaker Demuth noted that unlike the 2023 and 2024 sessions, it was Minnesotans who won in 2025 and 2026.
Capitol Watch and the American Experiment Podcast will have much more analysis in the weeks to come on the 2026 session.
