Leaders from Minnesota’s divided Legislature and Governor Tim Walz have reached a session-ending deal that includes a major bailout for Hennepin County Medical Center (HCMC), a sizable bonding bill to borrow money for construction projects across the state, and targeted tax relief for budget-strapped Minnesotans.
The framework agreement now must be translated into final bill language for lawmakers to vote on before the constitutional deadline of midnight on Monday, May 18.
Most legislators — all but a handful — were unaware of even the basic outline of the deal when it was announced. Details are still being negotiated behind the scenes. This last-minute process is nothing new, but it is always dicey for the leaders of all four caucuses. Their members are understandably cautious, even skeptical, worried that key priorities could be cut at the last minute. In an equally divided House and a nearly tied Senate, legislative leaders are walking on especially thin ice to maintain the votes.
HCMC gets money
At the heart of the agreement is significant aid for HCMC, Minnesota’s largest safety-net hospital, which has been facing serious financial distress. The deal includes roughly $205 million in immediate funding this year, plus up to $500 million through 2031 in a new hospital stabilization reserve account. The package also extends support to rural and critical access hospitals statewide. As reported by FOX 9 and the Star Tribune, this bailout should prevent closure, but it also underscores the structural challenges in our healthcare funding system. Important details and accountability guardrails are still missing.
As Sen. Erin Murphy (D-St. Paul) stated, “This was a hard-fought negotiation, and I’m damn proud to say we defended many of our most essential Senate positions, including property tax relief for homeowners… and funding to stabilize healthcare at HCMC and critical access hospitals.”
The Center of the American Experiment has long stressed the importance of keeping HCMC open as a vital Level I Trauma Center and teaching hospital. However, these taxpayer dollars must come with real reforms — shifting the focus back to patient care and away from DEI initiatives, climate mandates, and other non-essential priorities pushed by a Hennepin County Board that couldn’t figure out how to put a Band-Aid on a papercut if their lives depended on it.
Tax Relief?
Minnesotans will receive a one-year reduction in vehicle registration (tab) fees, reverting toward 2022 levels and returning an estimated $250 million to drivers. The deal also includes roughly $125 million in property tax relief. These measures, long championed by House Republicans, were highlighted by Speaker Lisa Demuth, who said: “Our caucus has fought all session long for car tab relief, property tax cuts, and meaningful anti-fraud measures. This budget delivers that, along with help for rural and critical access hospitals across the state and relief for our counties.”
It is worth noting that “property tax relief” means very different things to different parties. Conservatives typically favor direct refunds to taxpayers, while Democrats often prefer sending money to counties in hopes they will restrain future levy increases. We do not yet know exactly how this deal is structured.
Parting gifts (a bonding bill)
Because bonding bills require a three-fifths supermajority (60%) vote in both the House and Senate — rather than a simple majority — bipartisan support is essential. The Minnesota Constitution wisely imposes this higher threshold to prevent unchecked borrowing. That same requirement also creates powerful incentives for deal-making at the end of session. As is tradition, American Experiment will soon release our annual “Turkey of the Year” awards highlighting the most wasteful projects in the state. This bill could produce a winner from what will likely be a sizeable flock within this $1.2 billion bill.
God and the devil are always in the details.
More to follow.
