Legislative update: End of session recap

Summary

The 2026 legislative session has officially ended. Having an evenly divided House, a single-seat majority in the Senate, and a precarious budget situation, our expectation of making significant progress or investments in state government services was pretty low. Most of session was overshadowed by competing narratives ahead of the midterm elections where the Governor’s race will be open and all constitutional offices and legislative seats will be contested. The GOP caucuses continued with their push to address the ongoing fraud issues in grant programs, while the DFL countered with a mix of anti-fraud, gun violence prevention, and responses to economic and safety impacts from Operation Metro Surge.

MAPE had several priorities going into session, but the overarching goal was preventing bills harmful to state employees from passing into law, which we were largely successful in doing. Some of these include making public employee misconduct a felony and creating restrictive employment covenants for state employees involved in grant management.

Pensions

MAPE had two provisions in the omnibus pension bill. First is the new MSRS corrections agent early retirement plan. This is the culmination of over 20 years of work for employees who work in probation services to retire at 60 years of age. MAPE was able to secure a split in the increased contribution rate, as well as a temporary employee rate reduction. Second, we were able to pass special legislation for two state fire marshal employees who were not provided their retirement benefit election option as required by state law. Given that this year was not a budget year and Minnesota’s long-term fiscal outlook is uncertain, we were unable to pursue broader benefit improvements.

State government

The new state Office of the Inspector General legislation was signed into law. Last year, MAPE spent a significant amount of time ensuring that the new office would remain in the executive branch and that the positions would be in the classified service. MAPE also worked with the Senate authors to try reducing the number of employees potentially transferred from their current agency to the new one. This year, we focused on obtaining full funding for the agencies impacted by this new proposal so current employees would not be left with unfunded mandates. The one area where we were not successful was preventing the transfer Department of Education OIG employees to the new agency. MAPE was able to negotiate a delay in the transfers so that it can be addressed next year.

In addition to those bigger items, MAPE passed two small provisions in the state government policy area. State employees serving in the legislature will no longer have their benefit or service credit rates impacted while on legislative leave. Additionally, employees at Minnesota State Colleges and Universities will now have access to blood-donation leave.

Administrative funding 

A recurring issue throughout the session, particularly in bills authored by Senate DFL chairs, was insufficient funding for agency costs related to grant administration. Although statute already sets the percentage agencies receive based on the type of grant awarded, rider language in many supplemental bills reduced the share available for grant oversight. Future conversations on the importance of fully funding grants administration and its role in preventing fraud and ensuring effective oversight will be important to secure the funding necessary to maintain the agencies’ capacity to carry out this work. 

Higher education 

In addition to blood donation leave, the Higher Education conference committee also agreed to $3 million in funding to address the issue of ghost students. This follows the creation of a working group on the issue that met last year and included a MAPE representative. The funding is directed toward the acquisition, implementation, support, and maintenance of automated identity verification systems to combat enrollment fraud. 

Items of concern to MAPE that were not addressed in this year’s Higher Education deal are the $130 million shortfall in the State Grant Program. With no additional funding for the State Grant Program, the Office of Higher Education will have to ration awards to students, potentially leading to students dropping out before graduation.

Bonding 

The Capital Investment agreement included many of the items MAPE members needed, but often at lower funding levels than desired. The most important project omitted was the DCT St. Peter Water and Sewer Replacement. This project was needed to prevent facility staff and patients from being forced to use outhouses due to sewer failure. Other critically underfunded areas were asset preservation for both the Minnesota State Colleges and Universities system and the Department of Corrections. 

A few successful areas were the securing of funding for the Minnesota Zoo to renovate and build a new wing for their Animal Hospital, which is in critical condition. There was also funding provided for the Faribault Vocational Programs Building, which is important for both inmate and staff safety. Neither of these items was funded by the Governor’s Capital Investment proposal but was included in the final legislative deal. 

Item	Agency Request	Gov Request	Outcome
MN State Higher Education Asset Preservation & Replacement (HEAPR)	200,000	74,800	64,612
Alexandria Technical & Community College	0	0	4,000
Southwest MN State – Locker-room Dome and Gym	0	0	1,200
Winona State University – Legislative Engagement Center	0	0	1,500
MN State Systemwide - Demolition	25,000	0	3,000
Minnesota State Academies	3,000	2,500	1,700
Perpich Center for Arts Education	6,000	1,300	1,300
Department of Natural Resources (DNR) Asset Preservation	203,000	30,000	30,000
DNR Betterment of Buildings	43,000	3,000	3,000
East Grand Forks Potato Inspection Facility Updates	2,300	1,380	1,380
Minnesota Zoo	30,000	4,000	12,800
Direct Care & Treatment (DCT) Asset Preservation	30,000	23,700	23,000
DCT St. Peter Water and Sewer Replacement	18,800	18,800	0
DCT Energy Upgrades	23,400	0	0
Department of Corrections (DOC) Asset Preservation	120,000	52,921	41,510
DOC Facility consolidation Pre-Design	350	350	350
DOC Faribault – Dakota Building Vocational Programs Expansion	10,712	0	10,712
DOC Building Demolition	1,000	1,000	0
Veterans Affairs Asset Preservation	41,152	23,700	15,000
Minneapolis Veterans Home – Building 16 Remodel	12,750	0	17,200
Minnesota Veterans Home Hastings Campus	0	0	45,172

Health and Human Services 

This 330-page deal includes changes to the areas of health, human services, and childcare, as well as a large funding fix for the Hennepin County Medical Center. While most of the regulatory changes in the bill are not directed at MAPE members, they impact the staff at MDH, DHS, and DCYF who will need to enforce all of the new laws without adequate compensation to the agencies to hire additional staff. 

The Health and Human Services Conference Committee also put additional funding into a number of grants and created new grants but restricted funding for grant administration in the language of the agreement. Due to this restrictive language almost all the grants have $0 in administrative funding in law. One of the largest new grant programs, the Hospital Stabilization Program, includes $600,000 in administrative funding for a $30 million grant. That is 2% of the overall funding set aside for grant administration. The standard set in 2023 statute for competitive grants like this one is supposed to be 10%. 

An additional Health and Human Services bill passed by both bodies earlier this week included protections for an expanded group of employees at Direct Care and Treatment so that their data cannot be disclosed to facility patients or clients. There was also language included that allows the head of a treatment facility or state-operated treatment program to restrict patient access to correspondence and telephone calls that the head of the facility reasonably believes will be used to harass, intimidate, or assault employees of the treatment facility or state-operated treatment program. 

Human services program integrity 

As part of the larger anti-fraud package, this deal focused on program integrity for human services programs, with some changes to also ensure continuity of care for patients if their programs were to be halted or changed due to suspected fraud. 

Large items in this bill include additional codification of the Office of Inspector General, funding for a study to analyze the roles of different entities (such as counties and tribes) in the human services process and make recommendations on potential changes to those roles, and funding for an electronic visit verification system. There are also many regulatory and licensure changes to high-risk Medical Assistance programs. 

Taxes 

MAPE’s work on tax policy began in the months leading up to the 2026 legislative session. Members met with targeted legislators to discuss the need to raise revenue and address the structural imbalance through a progressive tax system. These legislators included those hesitant to support revenue increases, those who needed additional encouragement to champion MAPE supported policies, and those whose positions were unclear. The conversations were productive and grounded in the essential work MAPE members provide for the state. During Lobby Day and throughout session, these interim meetings proved valuable, with legislators referencing awareness of MAPE’s position on the need to raise revenue. 

In the tax committees this session, both chambers worked within the constraints of a tied House and focused largely on noncontroversial legislation. The House tax committee heard several revenue-raising proposals, including a 5^th tier income tax, a digital advertising tax, and a wealth tax. The Senate tax committee also considered revenue-raising proposals, including taxes on advertisement services and social media platforms. MAPE members testified in support of several of these pieces. The final tax package ultimately did not include the MAPE supported revenue raising options heard during session, but raises revenue by more than $318 million, mostly through federal conformity. 

Public safety and data practices

Two provisions in the public safety omnibus bills supported by MAPE include an interim work group to address ambiguities in the probation services when a county decides to change the delivery system and additional personal data protections for Minnesota Paid Leave judges and Unemployment Insurance judges.