Special Session Adjourned
Three weeks after the 2025 legislative session ended, the legislature held a one-day special session to take up and pass the remaining pieces of the state’s biennial budget and avert the looming partial government shutdown that would have started July 1st. With the most evenly divided legislature possible, legislative leaders had to navigate a 67-67 split in the Minnesota House of Representatives and a one vote (34-33) Democratic majority in the Senate to secure bipartisan support for each of the various omnibus finance bills required under the Minnesota Constitution. Legislators had to seek bipartisan (and often unpopular) compromise and many legislators expressed frustration with proposals they eventually voted to support.
Biennial Budget Passed
The bipartisan agreement to hold a one-day special session on June 9, 2025 left legislators just under 24 hours to debate and vote on the 14 bills agreed upon by leadership. In the end, legislators found a path forward and sent a $66 billion biennial budget that funded all areas of state government to Gov. Tim Walz and averted a government shut down.
The overall budget is an 8% decrease from previous biennium spending, as legislators sought to get ahead of the budget deficit looming in the next biennium. The 2025 omnibus finance bills lessen the gap between revenue and spending in FY 28-29 by 45% and leaves approximately $1.9 billion on the bottom line at the end of the biennium to help cover the state costs in the next biennium. The state budget outlook still predicts a deficit for FY 28-29, even with reductions made this legislative session. However, current projections will change significantly based on the economy and federal budget, which means the legislature could be back next session to pass an additional supplemental budget.
Budget Related Bills
In addition to the nine omnibus finance bills, the omnibus tax bill, and the omnibus capital investment bill, two other legislative proposals passed as “stand alone” bills due to the controversial nature of the topics and the complexity of the legislative negotiations. Many legislators wanted to vote for the overall omnibus bills that would have carried the legislation but were opposed to the specific issues. To ensure passage of the omnibus bills, two proposals were brough forward independently, including:
Health Care for Undocumented Adults: In what may have been the single most contentious issue during the end of session negotiation process, legislative leadership brought forward a proposal that would eliminate eligibility for MinnesotaCare for undocumented adults, beginning January 1, 2026. A rollback of a Democratic proposal from 2023, the change impacts undocumented adults while preserving eligibility for children. The proposal ultimately passed both chambers over strong opposition from legislative democrats and was sent to Gov. Walz for his signature.
Data Centers: The second stand-alone proposal brought forward combined a variety of tax, energy, and environmental provisions relating to the construction and operation of data centers in Minnesota. Specifically, the bill included a number of policy initiatives, most notably was language that:
Last Minute Capital Investment and Infrastructure Bill Passed
Despite legislative leaders stating, just days prior to the end of the regular legislative session, that a capital investment bill would not pass in 2025, legislators eventually agreed to a roughly $700 million infrastructure package as part of the special session agreement. Unlike past proposals that included funding for specific projects across the state, the 2025 legislation generally funded established infrastructure accounts instead. Most notably, the bill appropriated:
