MN Government Updates 05.05

State Budget Officials Project $2.426 Billion Deficit

Today, Minnesota Management and Budget (MMB) released an interim budget projection. The report states that Minnesota’s budget and economic outlook has significantly worsened since the coronavirus pandemic. A deficit of $2.426 billion is now projected for the current biennium, which is almost a $4 billion change compared to the February forecast. Revenues are expected to be $3.611 billion lower and spending, including appropriations enacted since February, is expected to be $391 million higher. The $2.359 billion budget reserve remains available to mitigate the budgetary impact of the crisis. Given the uncertainty about the path of pandemic, the economic outlook will remain volatile for some time.

 More information on the budget projection can be found here.

Walz Press Briefing

This afternoon, Governor Walz and other state officials held a press conference with reporters to update the public on efforts to respond to the COVID-19 pandemic. Today’s press conference was largely focused on MMB’s budget projection.

Commissioner Myron Frans, Minnesota Management and Budget

  • Commissioner Frans noted that since February, when the last budget projection was given, the economic conditions of the state have dramatically weakened and the outlook for the state remains volatile.
  • With a projected deficit of $2.426 for the current biennium that runs through June 30, 2021, there’s been about a $4 billion change in projection since the February forecast.
  • Currently, the state has $2.359 billion in the budget reserve. While the commissioner stated that now is the time to use money from the reserve, he cautioned against the state spending all of it.
  • Commissioner Frans said that not all of the budget problems need to be solved by May 18, when the legislature is scheduled to adjourn for the year. He said that the budget may need to be readjusted at various points throughout the current biennium.
  • The budget presentation from MMB can be found here.

Governor Tim Walz

  • Governor Walz noted he was on a call with the Minnesota congressional delegation earlier in the day and advocated for direct relief for state and local governments.
  • The governor announced he has signed Executive Order 20-51.
    • This order will allow hospitals, ambulatory surgical centers, and clinics – whether veterinary, medical, or dental – to resume many currently-delayed procedures once facilities have developed criteria for determining which procedures should occur during the COVID-19 pandemic and provided a plan to maintain a safe environment for facilities, staff, patients, and visitors.
    • Previous executive orders delayed non-essential and elective surgeries, consistent with guidance from the Centers for Disease Control and Prevention, allowing health care facilities to preserve resources and reduce the risk of COVID-19 transmission. Since these Executive Orders were issued, Minnesota has made and continues to make significant headway in securing additional personal protective equipment and improving testing and hospital surge capacity.
    • Although postponement of non-essential or elective procedures has proven to be an effective means of preserving essential healthcare resources for the COVID-19 response, Minnesota Department of Health guidance recognizes that extended delays in the provision of certain care may pose substantial risks to patients. Non-essential or elective procedures are often clinically necessary to treat chronic pain and conditions, or to prevent, cure, or slow the progression of diseases.
  • When asked about if cuts may have to be made to local government aid (LGA), Walz responded that restoring LGA to 2003 levels was a central piece of his priorities for the 2019 Legislative Session. He said he’s deeply concerned about local budgets and that it’s the state’s responsibility to be partners with them.
  • When asked if there will be a need for a budget-cutting special session, the governor responded that a bonding bill needs to get done before the scheduled end of session and that it’s “more than likely” the legislature will have to be prepared for a budget-focused special session after the regular session ends on May 18.
  • When asked if he will extend his peacetime emergency executive order that extends until May 13, Walz responded that is it “more than likely” that he will do so.

Commissioner Jan Malcolm, Department of Health

  • Commissioner Malcolm announced the state has 7,851 laboratory-confirmed cases of COVID-19. This is up more than 600 from yesterday’s report. The five counties with food processing outbreaks account for the majority of the new cases.
  • Additionally, there have been 27 more deaths due to COVID-19. 23 of the 27 deaths were associated with residents of long-term care facilities. This bring the state total to 455.
  • Currently, 434 patients are hospitalized for COVID-19 with 182 of those in the ICU.

Legislative Leaders Ask Committee to Wrap Up Work by Saturday

Yesterday, the four caucus leaders sent a letter to all members of the legislature requesting that committees finish work by Saturday, May 9th at midnight in order to have sufficient time to consider bills on the House and Senate floors before the end of the 2020 Legislative Session. The last day of the session is Monday, May 18, but the last day to pass a bill is Sunday, May 17.

Amos A. Briggs | Government Relations
LOCKRIDGE GRINDAL NAUEN P.L.L.P.
100 Washington Avenue S | Suite 2200 | Minneapolis MN  55401

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