Minnesota lawmakers strike deals on bonding, gas tax ahead of session's final day

The Minnesota Legislature is set to gavel out Monday after a whirlwind session that will shape the state for years to come.

Driving the news: As they raced to finish by the May 22 adjournment deadline, DFL lawmakers, who're in the majority, finalized legislation on taxes and transportation.

• Plus: Republicans agreed to put up the votes needed to authorize a $2.6 billion capital investment package in exchange for $300 million more for nursing homes.

The big picture: The Democrats used their full control to approve a $72 billion, two-year budget and pass what DFL leaders have hailed as "transformational" changes to life and work in the state.

• New laws will cover abortion rights, paid family leave, gun control, marijuana legalization and free school meals for all kids.

Zoom in: Millions of Minnesotans will get rebates of $260-per-person — a figure much smaller than what Gov. Tim Walz initially proposed — as part of a plan to give part of the $17.5 billion surplus back to taxpayers.

• Similar to new child tax credits and the partial repeal of state taxes on Social Security income, salary caps for the payments are meant to target the relief to lower-income families.

Yes, but: The budget also contains billions in new taxes and fees, including a 0.7% payroll tax to fund paid leave, set to begin in 2026, and an added 0.75% sales tax across the metro to pay for transit.

• A new 50-cent fee on non-food deliveries over $100, and a gas tax hike that will add an estimated 5 cents a gallon over the next four years will go toward roads.

What they're saying: Democrats have hailed the session as the most productive in a generation, arguing that they delivered on campaign promises to increase funding for areas such as education and address child poverty.

• "We heard voters tell us they were tired of gridlock," Senate Majority Leader Kari Dziedzic said Friday. "And we have continued to show throughout this session that we came here ready."

The other side: Republicans and business groups slammed the DFL for raising taxes and fees in light of the surplus.

• "We need to adjust how government is spending money so Minnesotans during this time of inflation can keep more of their money to pay for what they need," House GOP Leader Lisa Demuth told reporters Saturday.

Catch up fast: Other weekend action included the final passage of a closely watched bill to raise wages and add job protections for Uber and Lyft drivers.

• DFL lawmakers working on the health budget bill reached agreements to allow undocumented immigrants to enroll in MinnesotaCare and to repeal some existing restrictions on abortion.

What's next: Legislative leaders said over the weekend that whether they can meet their midnight deadline for adjourning depends on how fast the revisor's office can draft late-breaking agreements.

• If they fail to finish on time, a short special session could be needed.