ST. PAUL, Minn. — Gov. Tim Walz and leaders of the Minnesota Legislature announced a hard-fought budget deal Thursday, contrasting the bipartisan cooperation that produced the agreement with the deep divisions that have tied Washington in knots.
The Democratic governor and former vice presidential candidate noted that he was sharply critical of President Donald Trump’s administration, and what he considers the dysfunction in the nation’s capital, when he delivered his State of the State address last month. But he also stressed back then that Minnesota could write its own story. Legislative leaders from both parties accepted that challenge, he said, and came up with a fiscally responsible balanced budget despite their ideological differences.
The Minnesota House is tied at 67-67, evenly split between Republicans and Democrats. The session got off to a chaotic start in January when Democratic House members boycotted it for three weeks until a power struggle was resolved. Senate Democrats hold just a one-vote, 34-33 majority. Those razor-thin margins mean at least some bipartisan support is needed to enact anything.
“So I’m truly grateful for the work,” Walz said at a news conference. “Grateful that Minnesota sends legislators here that understand that we may have differences, but we have not succumbed to the idea that we let dysfunction rule, and democracy and compromise are still seen as virtues instead of vices.”
However, Walz may still need to call legislators back for a one-day special session to finish the two-year budget, which will come in around $66 billion to 67 billion and take effect July 1. The adjournment deadline is Monday. A special session would likely be held before the Memorial Day weekend.
Walz hasn’t announced yet whether he will seek a third term as governor in 2026. Nor has he ruled out a presidential run.
But he’s one of several potential 2028 Democratic contenders touring the country as the party seeks future national leaders. He makes frequent appearances on cable TV shows and visits to early-primary states. He went to Iowa in March to launch a series of town halls in competitive congressional districts represented by Republicans. And he’s scheduled to make appearances May 31 at Democratic gatherings in both South Carolina and California.
The leaders expressed confidence that — despite some deep remaining differences that quickly flared up Thursday — they will have enough votes to pass everything. Many progressive Democrats are angry, and the Senate Republican minority didn’t sign off on the deal but supports parts of the agreement.
GOP House Speaker Lisa Demuth, of Cold Spring, paid tribute to the governor for “getting us all into the same room” to talk through differences. Republicans claimed a big win by blocking any general tax increases, except for a small bump in the state’s recreational cannabis tax.
“We worked well together, and I’m very proud of the work that we did,” Demuth said. “Am I perfectly happy about it? No. And I know I’m not alone in standing with other leaders here that are not happy about every part. But we worked very, very well together.”
The top House Democratic leader, Melissa Hortman, of Brooklyn Park, said the governor’s role was crucial.
“I’d like to really thank the governor for his strong leadership in these negotiations, keeping us all focused on the end goal of fiscal responsibility, and having those hard conversations and getting through the hard things,” Hortman said.
The deal includes a compromise that Walz floated to try to resolve one of the biggest sticking points. A top Republican demand was that a state-funded health care program for the working poor, called MinnesotaCare, should exclude undocumented immigrants. The deal lets undocumented children stay in the program, but undocumented adults will have to seek coverage elsewhere.
That retreat sparked an angry protest by progressive legislators, who pounded on the door to the governor’s reception room while the news conference was in progress and chanted, “You’re killing our communities.” They held a news conference afterward to say the agreement will deprive thousands of the state’s most vulnerable people of life-saving health care. They said Walz and Democratic leaders should not have given in.
“We can not vote for that. We’re not ready to accept that for our neighbors, for our friends, for our families,” said Democratic Rep. Cedrick Frazier, of New Hope.