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2026 Legislature Races to the Finish Line

2026 Legislature Races to the Finish Line

Please note, this update was written at 5 pm on Sunday, May 17. The legislature worked until midnight, the last minute available for them to vote on bills, and we’ll have a final report for you at our 12 noon Advocacy Wrap-Up on Tuesday, May 19. Check your Insider Brief for details. 

Last Wednesday, legislative leaders and Governor Walz announced a deal on a number of major budget, tax and capital investment items. The leadership agreement started the usual mad dash through the final weekend of the legislative session to wrap up work on almost two dozen bills spanning all areas of state government.

Education was not the hot button topic for this session. Despite sustained pressure by school groups, urging the legislature to continue with another one-time $50 million “hold harmless” of Compensatory Aid, the final Education legislation includes a very meager one-time $10M infusion of funds. See funding spreadsheet:

  • Column C is the FY27 Compensatory Revenue districts and cooperatives should expect as result of this bill
  • Column D is the FY27 loss of Compensatory Revenue (or gain) from FY ’26 revenue to be expected
  • Column E is the advantage this bill provides over the Current Law Compensatory Revenue projections for FY27

Five million dollars is also made available for schools to participate in an ‘anonymous threat reporting system’ either built by the state’s Department of Public Safety or to build their own. At a minimum, schools will be required to let parents and students know about a local system or the state system. We’re also anticipating an infusion of $12.5 million into the school linked mental health grants through the Department of Health, but at the time of this writing, the Health bill has not been posted for public viewing.

The Permanent School Trust Fund ballot question is on its way to the Secretary of State for certification as a ballot measure this November! A dust-up occurred on the Senate floor over a proposal to require a 2/3 vote of both the House and Senate to amend the distribution of future PSF proceeds, but that amendment didn’t go into the final legislative proposal. Expect to hear lots more about this ballot question as we get deeper into the summer and in the full election season next fall.

Lastly, we’re waiting on the final Tax bill. We’re told that our Seasonal/Recreational Tax Base Replacement Aid program is to be included in the final bill, but as of 5 pm Sunday, the Tax bill has yet to be posted for public viewing.

An omnibus Pensions bill is on its way to the Governor’s desk. It includes some changes to TRA and to the St. Paul TRA program, including:

  • Requiring employers across all state public pension plans, including TRA, to make pension contributions on the salaries of re-employed annuitants. For TRA, this means retired members who have returned to TRA-covered positions while drawing their pension.

  • Lowering the minimum age from 62 to 59½ at which a teacher may enter into a written return-to-work agreement with their employer before retirement.

  • Lowering the employee contributions for St. Paul TRA members from 9% to 8% of salary for coordinated members.

Stay tuned for more information as it becomes available.