A Race to The Finish
Will the legislature finish on time? With only two weeks left in the 2025 legislative session, much work needs to be done to complete the biennial budget and pass any other pieces of priority legislation. With five of the last seven budget sessions requiring a special session to complete the work, there is a possibility it could go into overtime. Most policy and finance committees are done meeting and both the House of Representatives and Senate are spending much of their time working to finish passing budget bills off the floors of their respective bodies in enough time so conference committees can begin to reconcile any differences they may have. As with most years, it will come down to the wire.
What About the Budget?
As both bodies work to pass omnibus bills for the first time so they can move on to conference committee work, the Governor and leaders from the Senate and House of Representatives continue negotiations to establish a global budget target. All bodies must be on the same page going into the final days of session. The most recent budget forecast shows a projected $6 billion shortfall in the coming years, which means leaders will have to negotiate targets that include overall reductions to the budget.
With no news of a “global target” yet, each body is still working to complete pieces of their own budget. But with just two weeks left, negotiations will be imperative to finalize the budget and wrap session up by the May 19 deadline. Capital Investment is one area that does not follow traditional budget deadlines, and those bills are yet to be released as well. All of these moving pieces are part of the end of session negotiations that will continue to ramp up in the coming days.
House Tax Bill Released
The omnibus tax bill, which is not subject to the conventional committee deadline calendar, is a major piece of the biennial budget and is generally released in the final weeks of the legislative session. Over the weekend, the House of Representatives released their draft of the tax bill (H.F. 2437, Davids) with a formal hearing in the House Tax Committee scheduled for tomorrow. A few of the notable details include:
Election News
There are two pieces of Minnesota related election information to note. Senate District 6 held their special election last week. DFL candidate Denise Slipy squared off against GOP candidate Keri Heintezman, as it had been vacant since they resignation of former Sen. Eichorn. Heintezman won with 63.5 percent of the vote to Slipy’s 36.4 percent. This win means the GOP will continue to hold that seat, but the DFL remans in a 34-33 majority.
Last week Angie Craig, who represents Minnesota’s Second Congressional District, announced her run for U.S. Senate to replace the retiring Tina Smith. As a result, there are names being floated around to take Craig’s place, such as former state Senator Matt Little, and state Senators Erin Maye Quade and Matt Klein. Prospective GOP candidates could be 2024 GOP nominee Joe Tierab, state Sens. Zach Duckworth and Pratt, and 2020 and 2022 GOP nominee Taylor Kistner. Both the Senate and Congressional races will be important ones to watch in the 2026 election.
Important Dates to Remember
May 19, 2025 Constitutional Deadline to adjourn the legislative session
Budget Reconciliation Remains in Question
This week begins with a fundamental question: Can House Republicans deliver a reconciliation deal? Three major developments from the past week have intensified doubts:
Speaker Mike Johnson is expected to meet with moderate House Republicans early this week, though no firm timing had been set as of Sunday night. These moderates view the current reconciliation proposal as politically dangerous—particularly the push from hardline conservatives for deeper Medicaid cuts.
Moderates are alarmed by suggestions that leadership supports capping Medicaid spending and lowering the federal match rate (FMAP). In reality, this group will not back cuts exceeding $450–500 billion, warning that doing so could threaten constituent access to care. Additionally, negotiations remain stalled on raising the state and local tax (SALT) deduction cap—an issue critical to blue-state Republicans.
Meanwhile, committee staff from Ways and Means, Energy and Commerce, and Agriculture are continuing work on legislative text, with full member engagement expected later in the week.
Speaker Johnson has instructed the three lead committees to postpone their reconciliation markups until the week of May 12. That delay significantly compresses the schedule ahead of the House’s Memorial Day deadline for floor action.
Currently, a Rules Committee markup is planned for May 19. Leadership is signaling that members should not expect to recess for Memorial Day without having passed the reconciliation package.
President Trump met with Johnson, Leader Steve Scalise, Chair Jason Smith, and Chair Brett Guthrie last week to discuss the package. The White House is now actively weighing in—raising concerns about drug pricing and signaling interest in new tax provisions, including rate hikes for high-income earners.
Elsewhere on the Hill
FY 2026 Budget Scrutiny Begins
House and Senate Appropriators begin hearings this week on President Trump’s FY 2026 budget request, which has been met with strong bipartisan pushback due to deep proposed cuts in housing, environmental, and law enforcement funding.
