ST. PAUL — Democrats in the Minnesota House of Representatives on Tuesday, March 23, put out their $52.5 billion budget plan complete with enhanced funding for schools and day cares, as well as protections for workers and families like paid sick and safe time and family leave.

The plan sets a final goalpost for lawmakers and the governor as they start weeks-long debates about how to fund schools, health programs, state government offices and supports for those in need. But it lacked specifics about plans to offer tax relief to business owners and Minnesotans out of work due to COVID-19 and possible tax hikes on top income earners and corporations.

Like budget targets issued by Gov. Tim Walz and Senate Republican leaders, the DFL proposal also left out federal funding from the American Rescue Plan Act, which is set to funnel $2.6 billion to the state. Democrats said the funds could help ease hardships caused by the pandemic, but wouldn't resolve long-standing gaps in education, child care, housing and health care.

"Our budget will focus on helping those most impacted by COVID: students, workers, families and small businesses," House Speaker Melissa Hortman, D-Brooklyn Park, said. "We're committed to ensuring that Minnesotans are able to weather this pandemic and then thrive once it's over."

The DFL proposal closely mirrored parts of a $52.3 billion proposal put forth last week by Walz but clashed with top goals set by Senate Republicans. Walz last week updated his budget proposal after state economists announced an expected $1.3 billion budget shortfall had swung to a $1.6 billion projected surplus.

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He will likely update his priorities again to factor in federal stimulus money headed to Minnesota.

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GOP lawmakers, meanwhile, have said they'll block any proposed tax hikes given the state's surplus. And with a majority in the Senate, they hold a key role in deciding what makes it into the state budget and what gets left out.

Senate Republicans last week set spending targets at $51.9 billion and drew a line in the sand when it came to proposed tax hikes.

"Instead of helping struggling workers and businesses, Democrats are prioritizing tax hikes and growing government," House Minority Leader Kurt Daudt, R-Crown, said. "We have a $1.6 billion surplus, and $8 billion coming from the federal government — it's tone-deaf to be pushing for tax increases on struggling Minnesotans when government is flush with cash."

To pay for proposed ongoing increases in funding to education, health care and supports for workers and families, House Tax Chairman Paul Marquart, D-Dilworth, said that Democrats would put forward "progressive ongoing revenue that's going to create more fairness and level the playing field." He said details about what that structure would like would come out in a tax bill early next month.

Lawmakers will now set about the work of writing a compromise plan that can pass through the divided Legislature and be signed into law by the governor. If they can't reach an agreement by July 1, they'll force a state government shutdown.

Follow Dana Ferguson on Twitter @bydanaferguson, call 651-290-0707 or email dferguson@forumcomm.com