Gov. Walz Tackles Budget Talks Amid Looming Deficit Concerns

Gov. Walz Tackles Budget Talks Amid Looming Deficit Concerns

During a legislative session that has already proven historic, it was another eventful week at the state capitol.

SAINT PAUL, Minn. — It was an extremely busy week at the Minnesota State Capitol.

During a legislative session that has already proven historic, the week began with the House gaining a member and returning to a tie, and ended with the Senate losing a member due to the resignation of disgraced former Senator Justin Eichorn. In the middle of all that, Gov. Walz met for the first time this session with all four legislative leaders in the House and Senate, to jumpstart budget negotiations ahead of the May 19 deadline.

Here's a recap of the wild week in St. Paul:

House Returns to a Tie

On Monday, DFL Rep. David Gottfried took the oath of office after winning a March 11 special election for the vacant House District 40B seat. Gottfried's victory restored the House to a 67-67 tie, marking the start of a power-sharing agreement that Republicans and Democrats negotiated in February following a three-week DFL boycott.

Despite the animosity early in the session, lawmakers from both parties applauded for Gottfried in House chambers on Monday during his swearing-in ceremony.

Under the power-sharing agreement, the two parties will co-chair and have equal membership on all committees, except for one on fraud prevention. That means any piece of legislation that reaches the House floor must have bipartisan support through committees. However, during power-sharing for the two years, GOP Rep. Lisa Demuth will remain the sole Speaker of the House.

"This is going to be a time that legislators, here in the House, can really focus on the core things we can agree on and that have to get done, and maybe strip away some of those really, really partisan things, and look at the things we can agree on first," Demuth said. "I think it's a great opportunity for us. Now, check back with me in April and then the end of May, but I'm really hopeful we can get the work done for Minnesotans."

Demuth's counterpart across the aisle, House DFL Leader Melissa Hortman, has also said in recent weeks that she looks forward to more bipartisanship, although she criticized some of the priority bills the GOP brought to the floor when the party had a temporary majority.

"My hope would be that to the extent some of the bipartisanship has been missing -- or a little light in committee and on the floor -- that we would find more opportunities to work together," Hortman said.

Senator Eichorn Arrested

After a show of bipartisanship in the House on Monday afternoon, the mood at the Capitol shifted overnight -- literally -- when the public learned Tuesday about the arrest of Sen. Justin Eichorn. According to Bloomington Police, Eichorn arranged to meet an undercover officer -- whom he thought was a 17-year-old girl -- for sex after responding to an online advertisement.

Within hours, Senate Republicans called for Eichorn to step down. On Wednesday, Eichorn was charged federally, and by Thursday, the entire Senate united in plans to expel him from the chamber. No state legislator has ever been expelled in the history of the Minnesota legislature.

However, minutes before Thursday's Senate floor session, Eichorn submitted his resignation to Gov. Walz, making the vote to expel him unnecessary. His resignation letter was read on the Senate floor, and Eichorn's nameplate was quickly removed from his assigned seat in chambers.

News of Eichorn's arrest, charges and resignation dominated headlines at the capitol.

"It is hard to conceive of a way that Mr. Eichorn could have returned to this capitol, to operate in any way," DFL Senate Majority Leader Erin Murphy said.

"This would have been a cloud hanging over the Senate. We don't need another one of those, so now we're able to get back to work," GOP Senate Minority Leader Mark Johnson said.

Gov. Walz Meeting On Budget

As all of this drama unfolded, Gov. Walz met privately Wednesday with the four legislative leaders from each chamber to discuss a path forward on budget negotiations. According to the latest budget forecast, the state has some leftover money to work with in the upcoming two-year budget cycle, but by 2028-29, the state projects a $6 billion deficit.

Walz called the meeting "productive."

"We know we've got a divided legislature. We know that we're solid and have a pretty healthy surplus this year, but I'm proud Minnesota looks over the horizon," Walz said. "How do we tackle... especially those health and human services cost drivers?"

On Friday, the governor released a revised budget proposal that includes some new funding for avian flu and law enforcement training, while reducing spending in other areas to account for that looming deficit. In response, House Speaker Lisa Demuth said the revisions don't move the needle for her caucus, because the governor "continues to propose tax increases that will not be able to pass the House. There is a lot of work still to be done if this is where Democrats are starting."

Despite all the chaos of the 2025 legislative session so far, Walz said the budget process is moving along at a normal pace and he said he's confident they can pass the budget by the May 19 deadline, to avoid a special session in the summer.

Speaker Demuth agreed.

"This is the time to make history in a new way, and to get things done on time," Demuth said, "when people don't think we could."

SOURCE: KARE 11