Minnesota lawmakers strike budget deal, protest erupts on ending health care for undocumented adults

Gov. Tim Walz and legislative leaders struck a budget deal Thursday to roll back health care coverage for undocumented immigrant adults, close the Stillwater prison and make other notable spending cuts.

After about two weeks of closed-door negotiations, Walz and leaders of the tied House and DFL-controlled Senate emerged with an agreement unlikely to please either political party.

In an immediate sign of pushback, a group of DFL lawmakers protested outside the governor’s reception room at the Capitol as Walz and legislative leaders discussed the deal, repeatedly banging on the door and chanting, “Don’t kill immigrants!”

“This is what happens when you compromise,” Walz said, responding to the protest on the other side of the doors. “These leaders knew that. They’re going to go hear this. I’m going to hear it. That’s the way this should be done. But I’m proud that this is a solid budget. It is fiscally responsible, it is pro-growth, it brought together a divided Legislature in a time ... of total chaos in D.C.”

The governor met with the frustrated group of DFLers later Thursday.

Walz announced the budget agreement alongside DFL Senate Majority Leader Erin Murphy, GOP House Speaker Lisa Demuth and House DFL Leader Melissa Hortman.

Missing was Senate Minority Leader Mark Johnson, R-East Grand Forks, who was involved throughout the negotiations but didn’t sign the agreement. He wouldn’t comment when asked if his caucus would support the deal but indicated he found some aspects of it acceptable, including spending cuts and paring the health care program for undocumented immigrants.

Legislators have just days left before their May 19 adjournment deadline and could need a short special session to pass budget bills. House and Senate leaders will have to make sure they have enough votes to pass the budget.

“It is my hope that this year … we will be able to wrap up our work either by the end of Monday or with a one-day special session before Memorial Day weekend," said Hortman, DFL-Brooklyn Park.

Budget targets released by the governor’s office show the deal reduces a projected $6 billion deficit in the 2028-2029 fiscal biennium, but it doesn’t completely wipe out the imbalance.

The coming two-year budget is expected to total $66 billion to $67 billion and will be balanced, per the announced deal.

The deepest spending cuts in the agreement come in social service programs. Walz and legislators have said for months the state needs to contain the skyrocketing cost of long-term care for people with disabilities.

GOP lawmakers pushed to repeal the program, passed by Democrats in 2023, as it’s seen triple the number of enrollees the state anticipated. Republicans worried the cost would balloon over time and blow a hole in the state budget.

“That was something we looked at fiscally that could not go on,” said Demuth, R-Cold Spring. “But we also recognize the importance of allowing that care for children that are here.”

“It’s not a measure of being uncaring,” Demuth added, “it’s a fiscal issue.”

Coverage for undocumented immigrant adults will end Dec. 31, Hortman said. The program only started in January.

As members of her caucus banged on the door of the reception room in protest, Hortman said the issue is “deeply personal” for many Democrats.

Members of the Legislature’s People of Color and Indigenous (POCI) caucus later gathered for a news conference where they declared they would not vote for the Health and Human Services budget if it cuts off coverage for undocumented immigrants.

“We’re talking about tens of thousands of individuals that would lose access to health care at the end of this calendar year,” said Rep. Cedrick Frazier, DFL-New Hope. “We’ve got individuals who are currently receiving cancer treatments, dialysis care.”

Another 2023 DFL program providing summer unemployment insurance to hourly school-year workers was also a sticking point in budget negotiations, with Republicans and school districts concerned about its long-term cost.

Hortman said the budget deal will fully fund the summer unemployment insurance for the next two years. A House education spending bill includes Republican language that would sunset the program in 2028, but Hortman said the repeal will not survive conference committee negotiations with the Senate.

Other highlights of the budget agreement include closing the Stillwater prison by 2029, a move that will require the state to find new places for more than 1,200 inmates.

The deal doesn’t include an agreement on a bonding bill for infrastructure projects across the state, but leaders said they still hope to pass one.

Walz and legislative leaders noted that reaching a deal wasn’t easy in what might be the most narrowly divided Legislature in state history. Out of 201 legislators in the House and Senate, there are 101 Democrats and 100 Republicans.