In the 2026 Minnesota Legislative Session, we called on policymakers to take bold action to protect Minnesotans’ health and well-being in the face of a number of challenges. Those challenges include addressing the harmful effects of the massive federal tax and budget legislation passed last July, known as H.R. 1.
This federal law did a number of things that make meeting the needs of everyday people more difficult in Minnesota and states across the country. H.R. 1:
- Made unprecedented funding cuts to health care, food support, and other services Minnesotans count on to be healthy and get by;
- Shifted substantial responsibility for funding and delivering basic needs services to the states and counties;
- Enacted expensive tax cuts that gave the biggest benefits to high-income people; and
- Funded a massive expansion of the existing deportation and detention regime.
In addition to the harms of H.R. 1, a number of other looming threats and challenges to Minnesotans played a defining role in the 2026 Legislative Session. In the last year, Minnesota has experienced multiple instances of political gun violence, a funding crisis at our state’s flagship trauma hospital, the humanitarian and economic impacts of Operation Metro Surge, and a worsening economy. Federal policymakers have repeatedly escalated threats to further cut federal funding for crucial services in Minnesota.
Governor Tim Walz and legislative leaders agreed to a supplemental budget framework while navigating a nearly impossibly close partisan split of 100 Republican to 101 DFL legislators. The agreement includes around $660 million in net general fund budget changes in the remainder of this biennium (FY 2026-27, which ends on June 30, 2027), combining funding increases in some areas and funding cuts in others with some one-time and near-term tax cuts. Policymakers also struck a deal on a $1.2 billion bonding bill to fund infrastructure projects. In the next budget cycle, the budget deal includes cuts in Human Services as well as some smaller funding increases in other areas, and raises tax revenues. The agreement reflects adjustments to the two-year state budget passed in 2025.
While some significant positive outcomes were enacted this session, there is much more left for Minnesota policymakers to do so that all Minnesotans have what they need to thrive. Here is a closer look at some of the specific policy priorities we had for this session:
Positive outcomes from this legislative session
- Affordable Health Care – Policymakers passed provisions to add staff and resources needed to implement some of H.R. 1’s new Medicaid requirements. For the first time, some people will be subject to work reporting requirements to maintain their Medicaid eligibility. Research shows that work requirements are an ineffective and burdensome policy. An estimated 128,000 Minnesotans will be subjected to regular reporting and at risk of losing their health care coverage. Policymakers made some progress toward designing Medicaid work reporting requirements so as many Minnesotans as possible can keep their coverage. For example, new applicants that are subject to work requirements must meet those requirements for one month before being eligible, rather than a longer time period. This shorter “lookback” period allows more people to have health insurance sooner, reducing the costs that people and health care providers incur when folks are uninsured. In the next year, policymakers also maintained the state’s policy that, once a person is determined to be eligible for Medicaid, Medicaid covers health care costs from the previous three months before the month they applied. Medicaid retroactive coverage helps Minnesotans by reducing medical debt and ensuring the cost of health care does not become burdensome because of paperwork errors or delays.
- Food – Policymakers agreed to $10 million in additional funding for food banks and food shelves to tackle Minnesotans’ increasing needs for food assistance for the rest of the biennium. They also sent about $11 million to counties for FY 2027 only to help cover a portion of new administrative costs for SNAP shifted to them by the federal government, and $90 million for IT improvements to the outdated computer systems used to administer SNAP and Medicaid.
- Taxes – The omnibus tax bill takes some steps toward raising more revenues to sustainably fund public services, raising an additional $342 million in FY 2028-29 in net general fund resources. The choices Minnesota policymakers made about whether or not to replicate tax changes for people and businesses contained in H.R. 1 – a process called tax conformity – includes some provisions that cut taxes and some that raise revenues, but overall raises needed revenues in the next budget cycle. Although we would have preferred a few different choices in the overall conformity package, we are very pleased that policymakers rejected creating Minnesota versions of expensive and ineffective provisions in H.R. 1 like the so-called “no taxes on tips” and “no taxes on overtime”. The tax bill also restored a requirement that the state create a free, public, online tool for Minnesotans to file their state income taxes, also called Direct File.
- Addressing the impact of Operation Metro Surge – In response to the economic devastation and barriers to economic participation caused by the federal actions from December 2025 to February 2026, policymakers approved $40 million in rental and utility assistance. Assistance is open to households with incomes that are at or below 200 percent of federal poverty guidelines and experiencing housing crises, regardless of immigration status.
Disappointments and work left to do
- Affordable Health Care – Unfortunately, policymakers reduced the months of retroactive Medicaid coverage down from three months to one or two, depending on the population, beginning January 1, 2028. This would increase cost pressures on both Minnesotans needing care and health care providers. We also encouraged policymakers to enact provisions that would allow Minnesota to remove or relax Medicaid work reporting requirements in the instance that the federal government walked back these requirements, but regrettably this language did not pass. There is still more to be done to implement work reporting requirements to cause the least amount of harm before they go into effect January 1, 2027, such as expanding MinnesotaCare eligibility for people newly ineligible for Medicaid.
- Food – Policymakers did not agree to commit funds to cover the portion of SNAP benefits that H.R. 1 shifted to the state. Beginning on October 1, 2027, Minnesota will need to start funding a portion of SNAP benefits to guarantee that Minnesotans can continue to receive food support through SNAP. Policymakers also did not come to a lasting agreement on how to distribute new administrative costs in SNAP between the state and counties going forward. This leaves the door open to higher county property taxes and additional pressure on emergency food systems.
- Immigration – Progress was not made this session to protect access to needed public basic needs services for our immigrant neighbors. Policymakers did not adapt eligibility for state health care and food support programs to make up for H.R. 1’s new exclusions of humanitarian immigrants. Policymakers also did not enact measures to protect Minnesotans’ safety, human rights, and ability to participate in the economy proposed in response to the harms of Operation Metro Surge. Proposals on the table included mask prohibitions for ICE agents, protections against courthouse arrests for immigrant families fulfilling legal requirements, loan or grant relief for businesses impacted by the occupation, and additional authority for state investigations of civil rights violations and use of force by federal agents, especially in response to the killings of Alex Pretti and Renée Good.
- Taxes – While the final tax legislation does raise new general fund revenues in the next biennium, more revenues will be needed for the state to fill in the big funding gaps from H.R. 1 and to sustainably fund public services that Minnesotans count on into the future. We had also argued that if policymakers were going to pass one-time property tax reductions this year, they should include Minnesota renters, who pay property taxes through their rents. Unfortunately, the $125 million property tax reduction passed this year is only for homeowners.
What we’re looking for from policymakers ahead
Policymakers were making decisions in the 2026 session in a tightening state budget environment. The state’s February Forecast projected a $3.7 billion surplus for the current budget cycle (FY 2026-27) but a much smaller $377 million positive balance for FY 2028-29, taking into account what it would take for existing services to keep up with inflation. However, various warning signs suggest that the state’s budget challenges are more serious than these figures would suggest.
The budget and tax choices policymakers passed this session are projected to leave around $3.1 billion at the end of this budget cycle, which will roll over into the next biennium to fund services in FY 2028-29, and less than $5 million left at the end of the FY 2028-29 biennium. While some progress was made in addressing the state’s “structural imbalance,” there is still a gap and Minnesota is not yet raising enough revenue to maintain existing funding commitments into the future.
Some good steps were taken to address the challenges facing Minnesotans, but more revenues and investments will be needed in the years ahead to maintain Minnesotans’ health, access to food, and economic well-being. Federal deadlines are rapidly approaching to enact harmful changes, and policymakers should prioritize mitigating the harm and ensuring all Minnesotans have affordable health care, food support, and other vital public services that people across the state count on to get by.
We’re looking to policymakers to act boldly to create tax and budget policies made with everyday Minnesotans in mind. Together we can raise the revenues and fund the investments needed to meet this moment and shape the future of shared prosperity we want for our communities.
By Carly Eckstrom, Jessie Luévano, and Nan Madden