Republicans and Democrats in St. Paul struck a deal on Minnesota’s next two-year budget. The deal will fund state government through June of 2027 and comes just days before this year’s legislative session ends on May 19.
In recent days, Gov. Tim Walz and legislative leaders have been locked in negotiations over how to fund state government, how to address a looming $6 billion deficit, and what kinds of state policy changes will be made.
At present, the Democrats control the Minnesota Senate and the governorship. Meanwhile, the Minnesota House of Representatives is evenly split with 67 Republicans and 67 DFLers. Given how closely divided the legislature is, any budget deal needs bipartisan support.
Gov. Walz unveiled the budget deal at a morning press conference with House Speaker Lisa Demuth, R-Cold Spring, Senate Majority Leader Erin Murphy, DFL-St. Paul, and House DFL Leader Melissa Hortman, DFL-Brooklyn Park.
Notably absent was Senate Minority Leader Mark Johnson, R-East Grand Forks, who later said the budget deal “falls short of acknowledging we need bipartisan support to stop the harmful progressive policies hurting small businesses and working families.”
According to the agreement, Minnesota’s new two-year budget will be several billion dollars smaller than the $72 billion biennial budget from May of 2023. Further, the budget deal will decrease the upcoming $6 billion deficit by roughly 45%.
“This agreement will ensure Minnesota continues to be the best place in the country to raise a child, while responsibly addressing long-term structural budget challenges,” said Gov. Walz. “While we disagree on many things, every person in the negotiating room has the best interest of our state in mind.”
With the exception of a tax increase on marijuana, the final agreement contains no new taxes or tax hikes. Republicans also touted the budget deal as the “largest spending cut” in the history of Minnesota.
“We still have work to do, and I look forward to finishing this session strong,” said Speaker Demuth. “With this agreement, we’re making life more affordable for Minnesotans, strengthening our state, and making Minnesota a great place to live and work.”
DFLers protest changes to MinnesotaCare
During the press conference, state leaders announced that adult illegal aliens will no longer be allowed to use MinnesotaCare after Dec. 31, 2025. However, the deal will allow illegal alien children to remain on MinnesotaCare.
Back in 2023, Democrats passed legislation which gave illegal aliens the ability to sign up for MinnesotaCare, a state-run healthcare program for low-income individuals. Republicans have consistently railed against this policy, saying that state services and tax dollars should not be going to those who are here illegally.
Earlier this year, figures from the Minnesota Department of Human Services (DHS) showed that the number of illegal aliens enrolling in MinnesotaCare has exploded past initial projections.
While Gov. Walz and legislative leaders were explaining the particulars of the budget deal, DFL legislators could be heard outside the press conference chanting and pounding on the doors in an apparent protest of the compromise on MinnesotaCare.
Mocking a slogan regularly used by Walz, the lawmakers chanted: “One Minnesota, right?”
WATCH: Democratic legislators can be heard outside budget press conference chanting in protest of plan to end state-run health care access for illegal immigrant adults pic.twitter.com/8qpmXWd0TX
— Alpha News (@AlphaNewsMN) May 15, 2025
Following their protest, DFL legislators from both chambers packed into a separate press conference room in the State Capitol and denounced the compromise on MinnesotaCare, criticized Republicans for pushing it, and said they would not support it.
“We are going to fight this to the very end” said Sen. Alice Mann, DFL-Edina, about the change to MinnesotaCare. “Every person who lives in Minnesota, is a Minnesota resident. They are part of this economy, they contribute, they work, they raise their children, their kids go to school, they pay $220 million in taxes per year, and we are not gonna let them sit, turn around, and die.”
Whether DFL lawmakers will support the rest of the budget deal is yet to be seen. However, the DFL resistance on this issue combined with the Senate Republican leader’s opposition to the overall budget deal could spell doom for the newly-unveiled agreement.
Closure of Stillwater prison
Another major part of the agreement was a decision to close Minnesota Correctional Facility Stillwater by 2029. Originally built in 1914, the Stillwater prison is Minnesota’s “largest close-security institution for adult males.” The facility houses over 1,000 inmates.
Regarding the prison closure, Walz told reporters “there have been constant issues around the inability to provide safety towards the staff and safety towards the incarcerated individuals.”
Additionally, the governor noted that maintenance requirements at the prison have become unsustainable and the state’s other prisons have the capacity to take in the Stillwater inmates.
Luke Sprinkel
Luke Sprinkel previously worked as a Legislative Assistant at the Minnesota House of Representatives. He grew up as a Missionary Kid (MK) living in England, Thailand, Tanzania, and the Middle East. Luke graduated from Regent University in 2018.
