Joint Budget Targets Announced by Legislative Leaders

Reaching the bipartisan budget agreement removes a significant hurdle for legislators as they work to finalize a two-year state budget under divided government.

With time running out on the 2025 regular legislative session, House and Senate leaders, along with Gov. Tim Walz, announced a global budget agreement that clears the way for conference committees to get to work over the weekend. The goal is to pass a two-year state budget by the constitutional deadline of 11:59 p.m. on Monday, May 19.

View global budget agreement details (pdf).

Many of the details for each budget area will be decided in individual conference committees, which are expected to meet throughout the weekend and possibly into early next week. High-level terms of the agreement include:  

• A roughly $66 billion two-year state budget in fiscal years 2026-2027.
• Debt capacity to allow for a $700 million bonding bill.
• Net tax revenue reductions of $118 million in fiscal years 2026-2027 and $190 million in fiscal years 2028-2029.

Though the agreement has been signed and agreed to by Gov. Walz, Speaker of the House Rep. Lisa Demuth (R-Cold Spring), House Speaker Emerita Rep. Melissa Hortman (DFL-Brooklyn Park), and Senate Majority Leader Sen. Erin Murphy (DFL-St. Paul), it remains uncertain whether rank-and-file legislators will support the conference committee bills when they reach the House and Senate floors. With a one-seat DFL majority in the Senate and a 67-67 partisan split in the House, the success of the current budget deal is not guaranteed.

What’s next?

Rep. Hortman said there is time for the Legislature to pass the budget and send it to the governor by the May 19 deadline. However, she acknowledged that a one-day special session before Memorial Day, which is May 26, may be needed to pass the budget if lawmakers can’t finish their work on time.

The League of Minnesota Cities Intergovernmental Relations Staff will remain actively engaged in conference committee meetings throughout the weekend and into Monday. The League will provide an update on Tuesday, May 20 summarizing key budget provisions that affect cities.

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