Impact of Minnesota Supreme Court Quorum Decision

Last Friday, the Minnesota Supreme Court weighed in on the question of whether 67 or 68 members of the House of Representatives are needed to constitute a quorum, deciding that 68 members must be present for official actions to take place. That decision invalidated all activity that House Republicans had taken since session started on January 14. This week, Secretary of State Steve Simon has returned to preside over the House each day at 3:30. Republicans have been in attendance, but Democrats have continued to stay away to deny quorum. Though House leaders continue to meet for negotiations, it remains very uncertain when the House will finally organize and begin functioning.

Perhaps the biggest question that many have had related to the invalidation of previous House activity relates to the hundreds of bills that had been introduced. According to the head of the Revisor’s Office, Ryan Inman, that office will automatically generate new jackets for each of those bills. Authors will have to re-sign and re-introduce new copies of the bills.

Senate Special Election

A special election was held earlier this week to fill the vacancy left following the death of Senator Kari Dziedzic (DFL). Senate district 60 is in the heart of Minneapolis, and not surprisingly, the DFL candidate, Doron Clark, won with a significant majority of the votes. Senator-elect Clark could be sworn in as early as Monday, restoring the DFL caucus’s majority. It is likely that the power-sharing agreement that the Senate is currently operating under will end next week, with Sen. Erin Murphy being named Majority Leader and committees being restructured with DFL chairs and majorities.

Another Court Case

Yesterday, Minnesota House Republicans initiated a lawsuit against Secretary of State Steve Simon. They claim that he is overstepping the authority granted to him as presiding officer by refusing to recognize Republican members for motions to compel their DFL colleagues to return to St. Paul. It is unknown when we may hear from the Court on this issue.

More on the Governor’s Budget

Governor Tim Walz unveiled his FY 2026-2027 Biennial Budget on Thursday, January 16. While the FY 2026-2027 biennium is expected to have a $616 million surplus, the FY 2028-2029 biennium has a projected deficit of $5.1 billion. The Governor solves this deficit by proposing:

  • $907.5 million in budget cuts and reductions in program spending growth;
  • $414.5 million in net revenue increases; and
  • $748.4 million in new spending.

In combination with $3.7 billion of carryover dollars from FY 2024-2025, the Governor’s Budget will have $2.12 billion remaining at the conclusion of FY 2026-2027. Due to the budget cuts and revenue increases that would be enacted for FY 2026-2027, the $5.1 billion projected deficit turns into a $354 million surplus at the end of FY 2026-2027.

What’s Next on the Budget

In the week to come, Senate Committees will continue to hold hearings on the Governor’s budget proposals, and Minnesota Management and Budget (MMB) will begin preparing the next Economic Forecast, which is due at the end of February. After this forecast, the Governor will revise his budget proposals to match the new revenue and expenditure numbers. There are signals that provide insight into what the next forecast will look like. First the good news, MMB announced on January 10 that revenue receipts for November and December of 2024 totaled $380 million more than forecast in the November 2024 Forecast. This good news is balanced by Minnesota’s macroeconomic consultant expressing concerns that ongoing economic growth, inflation, unemployment, and interest rates will adversely impact Minnesota’s economy.

January 31, 2025