Walz Announces Run for Historic Third Term
Last week, Minnesota Gov. Tim Walz announced his intention to seek re-election and a third term in the governor’s office. The announcement came after months of speculation and surprised some Capitol insiders who believed his desire to run had waned in recent months. If elected, Gov. Walz would become the first governor elected to a third term since the state transitioned to four-year terms in 1958.
In his announcement, Gov. Walz touted past achievements and sought to center his campaign on addressing gun violence, cracking down on Medicaid fraud, making health care more affordable, and investing in public schools. Walz was first elected in 2018, reelected in 2022, and was chosen as Kamala Harris’s presidential running mate for her unsuccessful presidential bid in 2024.
District 38B Special Election Results
Last Tuesday, a special election was held to fill the seat of the late House Speaker Emeritus Mellissa Hortman with Democratic candidate XP Lee victorious over GOP candidate Ruth Bittner, 60.9% to 39.1%. While the district has not been overly competitive in recent years, the stakes were high as the Democrats needed to retain the seat in order to restore the 67-67 divide and maintain the ongoing power-sharing agreement between the two parties. Rep.-elect Lee is a former Brooklyn Park City Council member and currently works as a health equity analyst with the Minnesota Department of Human Services.
Sen. Ann Rest Announces Retirement
Longtime Minnesota Sen. Ann Rest (DFL-New Hope) announced that she will not run for re-election in 2026 after serving more than 40 years in the Minnesota Legislature. First elected to the Minnesota Senate in 2000, Rest previously served 16 years in the Minnesota House of Representatives. She currently serves as chair of the Senate Tax committee and is also the Senate President Pro Tempore.
Housing Stabilization Fraud
Last week U.S. Attorney’s Office for the District of Minnesota announced that it was bringing criminal charges against eight individuals for alleged schemes to commit fraud within the state’s Housing Stabilization Services Program. Housing stabilization services is a federally funded program aimed at assisting those with disabilities to find and maintain housing. Acting U.S. Attorney Joe Thompson described what he called a “massive fraud scheme” at a press conference last week and noted that some of the individuals cited in the charges own housing stabilization services companies and have also been billing other programs related to Medicaid.
In early August, the Minnesota Department of Human Services (DHS) sent a letter to the Centers for Medicare and Medicaid Services (CMS) seeking assistance in closing the program, citing a lack of program oversite. Thompson said that these initial eight charges are the first round and there are expected to be more. These indictments come at a time where DHS is under significant scrutiny related to its program integrity operations. Gov. Walz issued an executive order last week directing state agencies to take more action to prevent fraud and it was announced that the assistant commissioner charged with overseeing housing stabilization services no longer worked for DHS.
The House and Senate are on recess this week. Rosh Hashanah, the Jewish New Year, begins this evening at sundown and ends Wednesday at sundown. The government funding deadline is in eight days.
Budget Negotiation Update; Shutdown Imminent?
When we left off last week, the House had just passed a Republican-drafted “clean” bill to extend government funding until November 21. Only one Democrat voted in favor. Speaker of the House Mike Johnson then recessed the chamber until at least October 1, meaning there will be no votes until after a shutdown begins.
Senate Democrats responded by blocking passage of the House Republican bill, with only one Democrat crossing the aisle to support it. Senate Republicans then rejected a Democratic alternative that would have kept the government open until October 31.
At this point, Congress seems nowhere close to funding the government. While House Republicans can argue they are the only ones to have passed a bill, that talking point has little value now. The government is set to shut down next week unless something changes. The political dynamics could shift rapidly in the run-up to the deadline, making this an unpredictable week.
Senate Minority Leader Charles Schumer and House Minority Leader Hakeem Jeffries have spent the past several days pressing President Donald Trump to hold a meeting. If a meeting between Trump, Schumer, and Jeffries does take place, it is uncertain how constructive it would be. Democrats’ central ask, an extension of enhanced Affordable Care Act premium subsidizes is something many Republicans support. That dynamic creates risks for Speaker Johnson and Senate Majority Leader John Thune if the president joins the negotiations.
Some lawmakers have floated the idea of enacting a stopgap funding bill that extends into 2026 and attaches the Affordable Care Act subsidies. While possible, this path appears unlikely. For now, House Republican leadership seems comfortable keeping the chamber out of session next Monday and Tuesday even as the shutdown begins.
Looking ahead, dozens of House Democrats, including Minority Leader Jeffries and other leaders, will be in Washington this week for the Congressional Black Caucus Foundation’s Annual Legislative Conference, which begins Wednesday. The Senate will return on September 29 and is expected to hold another procedural vote on the House bill. Senate Majority Leader Thune intends to force another vote next Monday evening in an effort to pressure Democrats, but it is extremely unlikely that 60 senators will back the measure. Without unanimous consent, final passage could not occur before the shutdown deadline. Meanwhile, many lawmakers from both parties, as well as President Trump, will be in New York for the United Nations General Assembly this week.
While the headlines this week are focused on shutdown politics, our work does not stop. We are keeping your priorities in front of the Minnesota delegation and their staff, reinforcing the value of your projects, and positioning them for success when the appropriations process restarts. These moments of uncertainty are when steady, consistent advocacy matters most, and you can be confident that Larkin Hoffman Public Affairs is doing exactly that on your behalf.
