Minneapolis intergovernmental committee hears state, federal updates as budget forecast tightens

Director Topinka provided the Minneapolis Intergovernmental Relations Committee an update on March 25 on state and federal actions affecting the city, saying the State’s revised February forecast reduced the projected biennial surplus and made new spending less likely this year.

Topinka said the February forecast reduced the projected biennial surplus by about $160 million from the November estimate and left a projected shortfall of nearly $6 billion starting in fiscal 2028–29. “We are about halfway through the State legislative session,” Topinka said, adding that committee and finance deadlines approaching in early April will shape what moves forward.

The nut graf: The committee was briefed on the implications of lower state revenue projections, the governor’s revised budget and a recent federal continuing resolution that stripped earmarks; staff warned those developments will constrain funding for city priorities such as capital projects, homelessness services and transit.

Topinka summarized near-term timing and fiscal constraints. Policy bills must clear committee by April 4 and bills with fiscal effects must leave budget committees by April 11 to remain viable this session. The governor’s revised budget adds roughly $250 million in cuts for the upcoming biennium and retains about $2 billion as a buffer, Topinka said. On the federal side, a continuing resolution passed in mid-March reduced nondefense spending by roughly $13 billion, increased defense spending by about $6 billion and removed earmarks from that stopgap bill, she said.

Topinka reviewed Minneapolis priorities being advocated at the Capitol: three longer-standing capital requests (Nicollet Avenue bridge — roughly $2 million; Water Yard project — about $5.7 million; and a 36-inch water main — $12,360,000), the downtown taxing-boundary proposal to add the North Loop for liquor and restaurant taxes, a tax credit to incentivize conversion of underused commercial buildings to housing, and a proposal aimed at addressing shelter funding gaps that would support low-barrier shelters in Hennepin County.

On environmental and solid-waste policy, Topinka described two bills the city supports: a change to the solid-waste management tax allocation that would return more funds to counties and cities, and a statewide electronic-waste recycling system to keep electronics out of landfills. On transportation, staff are continuing work on a traffic-calming funding bill and an Americans with Disabilities Act funding proposal; staff noted Minneapolis is well positioned on transportation committees in both chambers.

Council Member Cashman pressed staff about whether the governor’s revised budget would “claw back” the metro-area sales tax dedicated to transit, saying that money “was clearly designated for transit” and that changes would affect Minneapolis projects. Topinka said she would follow up with the committee with specifics from the revised budget and noted staff are tracking proposals that could shift general fund and sales-tax supports for transit.

Committee members also discussed federal outreach. Topinka said city delegations met recently with Representative Ilhan Omar and Senators Amy Klobuchar and Tina Smith during National League of Cities meetings in Washington. She added that the mid‑March continuing resolution removed city earmarks under consideration and that staff are preparing re‑submissions and potential projects for any 2026 earmark process, using 2025 House criteria as a working guide.

Council Member Jenkins thanked staff for organizing the Washington visits. Jenkins said the delegation’s meetings gave the city an opportunity to press lawmakers on how federal changes affect immigrant and refugee communities and other city priorities.

The committee asked staff to provide follow-up materials on several items, including specifics on the revised budget’s treatment of transit sales tax and more detail on anticipated uses of cannabis-related local revenue if the governor’s proposal to eliminate a 2% local share moves forward.

Less critical details: Topinka noted committee leadership and author relationships in the Legislature that staff expect will influence the bills: some measures have both House and Senate authors from Minneapolis, and the House’s current power‑sharing arrangement is affecting which bills are heard on particular days. The state session is scheduled to adjourn May 19, 2025.

Ending: The committee received the report and paused for questions before moving to remaining agenda items.