Session update 1: 2025 Legislative Session is underway

The 2025 Legislative Session is off to an eventful start. On Jan. 3, Gov. Tim Walz issued an executive order to move the Financial Crimes and Fraud Section of the Department of Public Safety (DPS) under the Bureau of Criminal Apprehension, transferring the Commerce Fraud Bureau from the Department of Commerce. By Feb. 7, the Department of Administration is ordered to issue a reorganization order to transfer all authority over those programs to DPS.  

There will be a legislative component to the order that expands oversight and investigative authority for other agencies that administer grants, as well as a plan to contract a vendor to implement artificial intelligence software to assist in fraud detection.  

Gov. Walz released his 2026-2027 budget recommendations on Thursday, Jan. 16 which reflect the challenging November forecast projecting a $5.1 billion shortfall in the 2028-2029 biennium. The administration proposes a mix of additional spending and capping future cost growths in several areas. Of the $748 million in new spending, the governor proposes $310 million in executive agency operating adjustments and $45 million in additional staffing and resources for multi-agency fraud prevention and detection programs. The governor also proposes a 0.25 percent public employee pension holiday.   

On the revenue side, Gov. Walz proposes lowering the state sales tax rate by 0.075 percent and eliminating the tax exemption on legal, accounting, brokerage and trust services. He also included several cost shifting and sharing proposals, including having counties and local units of government pay a portion of special education transportation and the Minnesota Sex Offender Program. In total, this would bring the projected general fund costs down by roughly $2 billion in 2028-2029. These numbers will likely change after the February Forecast is released and do not currently reflect any anticipated changes to federal funding levels or structures.  

Outstanding questions remain on changes to employee protections regarding fraud reporting and employee use and reliance on AI. MAPE staff is seeking clarity on these issues and may pursue expansions to the Minnesota Data Practices Act and Whistleblower Protection Act to prohibit employer retaliation.    

This week, the legislature’s efforts to convene the 2025-2026 Minnesota legislative session was overshadowed by the Minnesota House GOP’s unconstitutional attempt to seize control of the House.     

Over the weekend, Senate DFL and GOP leaders announced a temporary power sharing agreement that would allow the Senate to meet and organize committees. This was necessary because Sen. Kari Dziedzic passed away after a lengthy battle with ovarian cancer, leaving the Senate tied 33-33. The Senate is likely to return to DFL control after the Senate District 60 special election occurs on Jan. 28. Doron Clark won the primary election on Tuesday, Jan. 14. The Special election will be held on Tuesday, Jan. 28. In the meantime, the parties agreed to alternate control over committees and floor proceedings.  

The House was less successful in their negotiations to organize and convene session. The anticipated 67-67 tie and subsequent power sharing agreement between the House DFL and GOP was scrapped after a judge deemed District 40B Rep. Curtis Johnson ineligible to take office for not meeting residency requirements, giving the GOP a temporary 67-66 advantage until the 40B Special Election.  

The House GOP planned to use the imbalance to refuse seating Rep. Brad Tabke, despite winning his re-election via recount, which was affirmed by court Tuesday. Because of this, the House DFL refused to provide quorum to convene session, and Secretary Steve Simon adjourned session for lack of a quorum. The GOP remained in the chamber to conduct performative elections for Speaker and adopt a rule that would prohibit Brad Tabke from voting on whether he is eligible to take his seat. They have also promised to initiate recall petitions in DFL House districts for members who refuse to show up. Two lawsuits have been filed contending the legitimacy of convening session. There is no sign of resolution anytime soon, but we will provide updates as they happen.  

The Minnesota Supreme Court also heard oral arguments on a petition to invalidate the special election in HD 40B on the grounds there was no vacancy at the time Gov. Walz issued his writ of special election. 

Other updates 

The MAPE PAC endorsed David Gottfried in the HD 40B special election and hosted a door knock from the MAPE Office last Saturday. The Special Election will also be held on Tuesday, Jan. 28. 

The Trump administration will assume office next week. Given the discussion around federal program cuts that will impact state agencies, we will monitor the numerous proposals and executive orders and share info as we receive it.