Minn. legislative session starts with treats; the trick will be a deal on taxes

ST. PAUL, Minn. (FOX 9) - Gov. Tim Walz and Lt. Gov Peggy Flanagan drew a crowd while carrying pans of scotcheroos and lemon bars, handing out the treats to lawmakers as they returned to the House and Senate chambers to start the 2022 legislative session.

State Sen. Paul Gazelka, the former Republican majority leader who's running for governor, took one of each.

Lawmakers will soon debate how to handle the state's $7.7 billion surplus. Republicans are proposing permanent income tax cuts, while Walz and Democrats favor new programs and one-time direct payments to Minnesotans. And there will be pressure to finish their work early, as the 2022 midterm election looms.

"I remain really hopeful," Walz told reporters gathered near the Capitol rotunda about the new session. "This one feels different. It feels different because the needs are there."

In some ways, the session's opening day was different than the two that preceded it. There was a gender equality rally in the Capitol rotunda. In-person news conferences. Nearly full House and Senate chambers.

But the COVID-19 pandemic was still evident. None of the Capitol complex's cafeterias have reopened, leaving lawmakers and staff with brown bag lunches -- or with snacks from the vending machine in the Capitol basement. And mask-wearing was decidedly split, with most Democrats donning masks, and few Republicans joining them.

Walz checks and tax breaks

Both sides pledged to keep an open mind about each other's proposals for sending Minnesota's surplus cash out the door.

Monday, Senate Majority Leader Jeremy Miller said he was open to the possibility of direct payments to Minnesotans, but at a different scale than Walz has suggested. Walz has proposed $175 direct payments to most adults. His office calls them "Walz Checks," while Republicans blast them as a "gimmick."

"We might be OK with a one-time payment, but you know what? It’s got to be a heckuva lot larger than what the governor’s proposing -- and we’re not going to call it a Walz Check," Miller, R-Winona, told reporters. "It is not Gov. Walz's money."

Republicans who control the Senate favor permanent income tax cuts for everyone. The GOP was still exploring whether to cut lowest tax bracket, middle brackets, or both, Miller said.

Walz and Democrats have said a permanent rate cut would jeopardize state budgets during an economic downturn.

"I’m open to it. But what’s off the table is, if you’re making $20,000 a week, nothing is going to pass my desk that gives you a tax cut," Walz said. "That doesn’t make any sense."

Walz said he wanted to see lawmakers quickly pass $1 billion in pandemic bonus pay for 667,000 essential workers. Republicans said they will not go above an already-authorized level of $250 million and want to limit the recipients to health care workers and first responders.

"Republicans are so stingy," said House Speaker Melissa Hortman, DFL-Brooklyn Park. "Why is it, when we have a $7.7 billion projected surplus, would we not take care of the frontline workers who had to go to work before we had PPE (personal protective equipment)? Before we had vaccines? Before we knew what this virus could do?"

Walz also said lawmakers should quickly approve a tax break for businesses who are facing tax hikes to plug a hole in Minnesota's unemployment insurance benefits system. The issue has bipartisan agreement, though it appears likely to get caught up in negotiations over other issues.

Thompson apologizes

State Rep. John Thompson apologized Monday to a Republican colleague whom Thompson called a racist during a heated House floor debate last year.

Thompson had promised to make an apology to state Rep. Eric Lucero, R-Dayton, to settle an ethics complaint filed against him.

"Rep. Lucero, I’m going to apologize for calling you a racist on the House floor and also apologize for failing to be courteous and actually, like, showing respect to the House of Representatives," said Thompson, a St. Paul Democrat in his first term.

Thompson did not mention legal troubles that led Walz, Hortman, and other top Democrats to call for his resignation last year. Hortman has kicked Thompson out of the House DFL caucus.

Last summer, when investigating why Thompson maintained a Wisconsin driver's license despite being an elected Minnesota lawmaker, FOX 9 uncovered past allegations of domestic violence against Thompson.