Legislature Adjourns Regular Session With Work Left Undone, Special Session Expected Soon

While several major budget bills have been sent to the governor’s desk, many key measures remained unfinished as the constitutional deadline passed on May 19.

The Minnesota Legislature adjourned the regular 2025 session having passed fewer than half of the major budget bills needed to enact a full state budget for the 2026-2027 biennium. This means a special session will be necessary to authorize the remainder of the state’s budget.

Despite a late-session agreement on joint budget targets, deep divisions in what is considered to be the most closely divided Legislature in state history — with 101 Democrats and 100 Republicans — prevented smooth passage of a $66 billion, two-year state budget for fiscal years 2026-2027.

What passed during the regular session?

The areas of the budget that were approved by the constitutional adjournment deadline and are on their way to the governor’s desk for signage into law include:

The omnibus judiciary and public safety bill (HF 2432):

• Passed by the House on a 131-3 vote and the Senate on a 34-33 vote.
• Appropriates $3.5 billion during the 2026-2027 biennium to fund the Department of Corrections, Department of Public Safety, and the courts.
• Contains a League-supported provision that extends funding to reimburse employers for required police training courses in use of force, crisis response, conflict management, cultural diversity, and autism. It provides $4.9 million in each of the next two years. This funding was set to expire at the end of the current biennium.
• Includes a provision allowing governments to suspend data requests if the requester fails to inspect or collect responsive data within five business days.
• Expands police authorized drone use.
• Extends criminal penalties for tampering with or destroying infrastructure, such as streetlights, electric vehicle charging stations, traffic signals, camera systems, and electronic warning signs.

The omnibus pensions and retirement bill (SF 2884):

• Passed the Senate on a vote of 55-12 and the House by a vote of 133-1.
• Includes modest cost-of-living adjustments for members of the Public Employees Retirement Association (PERA) General and Police & Fire Plans.
• Includes a League-supported provision to reduce the continued health insurance coverage for duty disabled police officers and firefighters to 60 months instead of to age 65 for a regular duty disability, and prohibits cash settlements in lieu of the benefits. The change would not apply to those already receiving benefits under current law.

The omnibus state and local government and elections finance and policy bill (SF 3045):

The $1.35 billion bill passed the Senate 36-31 and the House 116-18 in the final hours of the regular legislative session. The bill includes many League-supported policy changes that benefit cities.

State government provisions

• New provisions strengthen fraud investigations by requiring annual reports from the Office of the Legislative Auditor and Minnesota Management and Budget to the Legislature.
• The bill allows government entities to exchange data of any classification related to suspected or confirmed fraud in public programs.

Local government provisions

• Open Meeting Law updates:
  • Removes the requirement for members of a public body to provide notice of their remote location. Previously, that location had to be open and accessible to the public.
  • Eliminates the three-meeting limit on remote participation by elected officials.
  • Allows public notices to be posted on a city’s website in lieu of a newspaper if the city’s designated qualified newspaper closes.
• Audit threshold:
  • Raises the 2025 audit revenue threshold for cities to $1 million, with annual adjustments for inflation. (The audit threshold for 2024 was $276,000.)

Elections provisions

The bill includes several process and procedural changes related to elections, including:

• Amends statutes to improve the voter registration update process.
• Revises absentee ballot applications and procedures, including return timelines.
• Requires party balance among election judges where ballots are being counted, recounted, or reviewed.
• Updates rules and procedures for the distribution of absentee ballot applications and sample ballots.
• Clarifies definitions for “local official,” “official actions,” and “lobbyist” as they relate to lobbying of political subdivisions.

The omnibus veterans and military affairs finance and policy bill (SF 1959):

• Passed the Senate 45-19 and the House 130-0.
• Provides $50 million, including a $39 million increase to support the state’s eight veterans homes.

The omnibus housing finance and policy bill (SF 2298):

• The $15 million housing bill passed the House on a 108-26 vote and the Senate on a 36-31 vote.
• While the bill includes language requiring the Minnesota Housing Finance Agency to prioritize projects in jurisdictions that have made certain local zoning changes, the bill does not include any zoning and land use reform language that would limit local decision-making authority.

The cannabis conference committee report (SF 2370):

• Passed the Senate 34-33 and the House 80-50.
• Makes technical and policy changes to the medical and adult-use cannabis laws.
• There are two changes that relate to cities:
  • Allows a city to issue retail registrations to preliminarily approved applicants before state licensing. Currently cities must wait until the Office of Cannabis Management issues a license.
  • Permits municipal cannabis stores to also carry lower-potency hemp edible retailer licenses for their municipal liquor store.

The omnibus legacy finance bill (HF 2563):

• Includes more than $770 million in spending over the next biennium (pdf) for numerous projects and agency programs supported through the Outdoor Heritage Fund, Clean Water Fund, Parks and Trails Fund, and Arts and Cultural Heritage Fund.

The omnibus agriculture and broadband bill (HF 2446):

• Passed the House 130-4 and the Senate 58-8.
• Adds $9 million above base funding, largely for grants, avian flu response, and a dairy processing plant.

Remaining work

Despite being included in a global budget agreement, the following major budget bills were not finalized and need to be taken up during a special session:  

• Transportation
• Education
• Jobs
• Higher education
• Health and human services
• Environment
• Commerce
• Energy

The Legislature has not passed a tax bill or a bonding bill. While not essential to keep the state government running, a bonding bill was not authorized during the 2024 session, which has created a backlog of necessary infrastructure projects that has grown significantly.

With the state’s maximum new debt capacity estimated to be $700 million, that is likely to be the funding level if a bonding bill is part of the special session deal. However, passing it requires supermajorities: 90 votes in the House and 41 in the Senate.  

The joint target for the tax bill is $118 million for fiscal years 2026-2027 and $190 million for fiscal years 2028-2029, meaning lawmakers will need to raise revenue through taxes or reduce aids and credits. The agreement from leadership includes:  

• Increasing the cannabis gross receipts tax.
• Modifying a data center exemption.
• Increasing the research and development credit.

The rest of the details will be worked out in conference committees but are largely unknown at this time.

What’s next?

Legislative leaders acknowledged during the final days of session that more time was needed to complete their work. Although joint budget targets (pdf) were agreed upon on May 15, conference committees still must resolve policy and spending disagreements.

Leaders announced they have given all conference committees a deadline of 5 p.m. on Wednesday, May 21 to finish negotiations. Leaders urged them to continue meeting as “work groups” to exchange proposals. If agreement is reached, bills could be drafted ahead of time to expedite a special session.

Only the governor has the authority to call a special session, and only the Legislature can adjourn one. In recent years, legislative leaders and the governor have reached agreements in advance on the scope and duration of special sessions, preventing extended delays. It’s unclear whether that will be the case this year.

The Legislature has until the end of June to pass the state’s biennial budget. If a budget is not enacted, there may be a partial state government shutdown beginning July 1. The last such shutdown occurred in 2011.

2026 session start date

The House and Senate have adopted a concurrent resolution that sets the start date of the next regular legislative session for Feb. 17, 2026.

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