Capitol View for February 12

Good morning. So much 'treat' talk at the Capitol this week.

The five families have held their first — and far from only — meeting of the year. Gov. Tim Walz, DFL Senate Majority Leader Erin Murphy, Republican Senate Minority Leader Mark Johnson, Republican House Speaker Lisa Demuth and DFL House Leader Melissa Hortman gathered for under an hour around a big table in the governor's office yesterday. We don't know how much of it was pleasantries, whether there were icy stares and, most important, if any progress was made. It'll be months before true budget negotiations begin. But the meeting served as yet another reminder that the Legislature is now moving forward after weeks of standing still. Only Hortman spoke to reporters on the way out, but that was to convey that there were no real updates to offer.

Minnesota's higher education institutions are in a precarious spot: They face a potential federal funding squeeze and their outlook for new state money is clouded by expectations of a leaner budget. Minnesota has receded in the amount it puts toward higher education as a percentage of the budget. Consider that in the 2004-05 budget, the category made up about 8.9 percent of the overall pie. A decade later that was about 7.1 percent. The current budget has it at 5.9 percent. It won't be an easy sell to bump that up. Gov. Tim Walz kept operational funding mostly flat in his budget plan. Republicans have called on the schools to spend less on administrative costs. Peter Cox has a look at the higher education funding debate in the context of both state and federal headwinds.

The great debate over phones in schools is ramping back up at the state Capitol. Minnesota passed a law a few years ago requiring school districts to set policies around cell phone use by students during the school day. Now there's a push to go further to keep phones and smart watches off in class. As Nicole Ki reports, not all administrators are on the same page . There are those who say that it's better to foster better use habits than ban the phones all together and there are others who say disciplinary incidents decline when use is restricted. With the default position being some limitations determined by school districts, lawmakers could find it easier to stand pat this year than go further.

In the closely divided Legislature, one thing that will be interesting to see take shape is the tax bill. Anything that dramatically raises or lowers taxes seems off the table if the House is tied come budget bill time. But bills to create or eliminate special exemptions could be in the mix. The House Tax Committee advanced a bill yesterday to expand sales tax exemptions for baby wipes, cribs, car seats and other essentials. But another GOP bill to put a constitutional amendment on the 2026 ballot to trigger tax cuts during surplus times got bogged down a bit and will remain in neutral for now. That proposal, if it gets to voters and wins approval, would create a special account to park projected revenue above 105 percent of projected expenditures and then distribute it to taxpayers in unspecified fashion. First-term GOP Rep. Wayne Johnson said "instead of creating new ways to spend surpluses, this would actually put it back to the people who created the surplus." But there are unanswered questions about freezing money amid potential uncertainty, which DFL Rep. Zack Stephenson honed in on. He used a present-day example of the potential of withheld federal aid that could put millions or billions in doubt, with less flexibility to address it. "You take a big tool out of our toolbox." A reminder that constitutional amendments make it to the ballot without a governor's signature and can even wind up before voters if it is part of a bill a governor vetoes.

The interim leader of the not-so-far-off cannabis retail market isn't giving a launch date, but more of a vibe about where things stand. Eric Taubel, the new top official in the Office of Cannabis Management, provided an update Tuesday to the House Commerce Committee on where things stand with rulemaking, licensure, inspections and a physical buildout. What still isn't known is when the first stores will open off tribal reservation land. Taubel offered this: "We're incredibly close to the point at which we're ready to launch this market. What we want to focus on this session is tightening things up and making sure we have the tools necessary to get the adult-use market open." There could be modifications to grant programs and plans for testing facilities (meant to make sure the products don't contain heavy metals or banned pesticides). Taubel's presentation can be found here . Lawmakers asked Taubel what's being done to head off more delays caused by lawsuits over licensing issues. The interim OCM director said there are more intervening steps being taken to work with applicants and differences in the type of lotteries being done. But, he said, "we can't control who sues us." Rep. Nolan West, R-Blaine and a supporter of the 2023 legalization bill, said he's frustrated by how slow things have gone, noting that other states that gave their OK later are further along. "Clearly we're misfiring here," West said. "We're seeing other states blaze past us and we're not even to the starting gate."

The March 11 race appears to be set in House 40B. Republican Paul Wikstrom and DFLer David Gottfried were the only names listed as the filing period closed Tuesday . There is still time for write-in candidates to register to have votes for them counted (a successful write-in campaign would be fitting here but extremely unlikely). This Roseville-Shoreview seat will be the one to decide if Republicans have an outright majority or must share power with the DFL in a tied chamber. Of note, there was no candidate filing by the Libertarian Party, which had joined in the legal case to reschedule the special election from its initial Jan. 28 date. The party's attorney faulted Gov. Tim Walz in an amicus brief for not leaving third-party candidates enough time to gather signatures to gain ballot access. Back then, there was a very abbreviated candidate filing period. There was slightly more time.

The House is barely a week into action after an election-caused standoff, but the 2026 election preparations have already begun. There is little doubt that both parties will spend big next year with majorities in the House and Senate at stake. Both can make plausible cases for pathways toward control of each chamber. The Democratic Legislative Campaign Committee served notice Tuesday that Minnesota is high on its priority list. The group spent $1.25 million in Minnesota last year, so it's a big player. Other states on its top targets list are Virginia, Michigan, Pennsylvania, Wisconsin and Alaska.