"Linked" issues remain a sticking point in Minnesota unemployment fund fix

A fight over "linked" issues lingers as the Minnesota Legislature scrambles to reach a deal to roll back higher taxes for businesses by a weekend filing deadline.

What's new: The DFL-controlled House approved a bill Monday night appropriating $2.7 billion to replenish the state's deeply indebted Unemployment Insurance Trust Fund.

• That's progress: After weeks of gridlock, both chambers now agree on how much to spend on the fix.

Yes, but: The House bill also earmarks $1 billion for frontline worker bonuses and includes language ensuring hourly school workers are eligible for unemployment during the summer months.

The catch: Republican leaders in the Senate, which passed a standalone unemployment fund fix in February, have balked at increasing the pandemic bonus pot from the previously approved $250 million and oppose the school worker change.

• But House Democrats don't want to move forward on helping businesses without the other measures.

The delay in wiping the debt, meanwhile, has created uncertainty and potential financial burden for businesses that must pay higher-than-usual payroll taxes by Saturday if the Legislature doesn't act.

The big picture: Tying the fate of two or more issues together is a common negotiating tactic at the divided Legislature — that's how each chamber's majority caucus can leverage their votes to get their own priorities accepted by the other side.

• But if both sides aren't willing to bargain, the strategy can prolong partisan stalemates until a deadline — or mounting political pressure — forces someone's hand.

What they're saying: House Speaker Melissa Hortman said the passage represented Democrats putting "our last best final offer on the bill in the hopes that will provoke something from the Senate" after weeks without a formal counteroffer.

• But Senate Leader Jeremy Miller said while he appreciates the movement, Democrats "loaded up the bill with other items, making it more difficult to find agreement."

The intrigue: It's still possible that a deal that includes both the unemployment fix and some additional cash for frontline workers is reached by the weekend.

• If that happens, both chambers could use the conference committee process for reconciling the two bills to quickly get the agreement to their respective floors for votes.
• Gov. Tim Walz and legislative leaders are set to meet again this afternoon.

The bottom line: Consider this round a preview of what's to come as lawmakers look to resolve even bigger issues ahead of the May 23 adjournment deadline.