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Minnesota Intercounty Association outlines state budget wins and cuts affecting Winona County
Summary
Minnesota Intercounty Association staff briefed Winona County commissioners on the 2025 state legislative session and budget, outlining which proposed cuts were avoided, which revenues were reduced, and what bonding and program funding Winona County can expect over the next biennium.
Minnesota Intercounty Association (MICA) staff gave a wide‑ranging legislative update to the Winona County Board, summarizing how the 2025 state budget and session outcomes affect counties.
Nathan Jessen, executive director of MICA, told the board the session was driven by a large projected deficit and that many proposals were framed as cost‑shifts to counties. “First… we were playing defense really right from the get go at the Capitol,” Jessen said. He said county program aid (CPA) avoided proposed reductions — a key outcome for Winona County, which receives a higher‑than‑average per‑capita CPA payment.
MICA presenters highlighted several items of direct relevance to Winona County:
- Cannabis revenue: The session repealed the earlier 20% dedication of cannabis gross receipts tax revenue that had been set aside for counties and cities; going forward, local sales taxes will apply to cannabis transactions but the prior dedicated county share was removed. - County Program Aid and PILT: MICA said counties avoided proposed cuts to county program aid and payment‑in‑lieu‑of‑taxes (PILT), both important local revenue streams for Winona County. - Aquatic invasive species (AIS) aid: Funding for AIS was reduced by 50% starting with aids payable in 2027; MICA estimated the cut will be about $44,500 for Winona County when the reduction takes effect. - Bonding: A $700 million capital investment (bonding) bill passed during special session with notable allocations relevant to counties, including approximately $42 million for the Local Road Improvement Program, $20 million for the Local Bridge Rehabilitation Program and $5 million for the local government road wetland replacement program. - Transportation: Changes in trunk highway and general fund allocation reduced some transportation fund availability; to offset revenue gaps the Legislature increased electric vehicle surcharges, which raised roughly $76 million that largely offset a $94 million shift out of the trunk highway fund. - Human services and public health: MICA reported a $35 million appropriation for modernization of the SSIS (eligibility system), additional funds for behavioral health facility capacity (including $75 million total to add 50 beds at AMRTC), and partial restorations for some public health grants that had previously been cut.
Amber Backus (transportation), Rachel Sysnowjik (environment), Nancy Slewski (public health and human services), and Emilio Lamba (public safety and corrections) provided issue‑area briefs. Highlights included:
- Transportation: Backus said the transportation omnibus faced large negative targets; although the trunk highway fund faces a modest net loss next biennium, bonding and an EV surcharge reduced the immediate impact. The bill included new reimbursement for certain deputy registrar transactions and $3 million in general fund support for the local government road wetland replacement program.
- Environment and clean water: Sysnowjik said the capital bill included funds for legacy‑program priorities and a new statewide drinking water contamination mitigation program, but aquatic invasive species aid will face reductions in 2027.
- Health and human services: Slewski briefed commissioners on changes to MNChoices reassessments (two‑year reassessments allowed in many cases), SSIS modernization funding, and new state grants and bond funds for behavioral health capacity.
- Public safety/corrections: Lamba said the session added three‑year averaging for the community supervision formula to smooth year‑to‑year funding swings, and described programmatic changes and the announced decommissioning schedule for the Stillwater prison (decommissioning scheduled by statute for Feb. 1, 2029 in the enacted package).
Commissioners asked clarifying questions about the local fiscal impacts of changes to cannabis revenue, the construction sales‑tax refund issue, and the distribution of bonding funds. MICA staff said some program details and implementation guidance remain to be published by state agencies and that several items will require follow‑up as rules and distributions are finalized.
The presentation concluded with MICA staff urging county officials to monitor special‑session outcomes and pending federal developments that could affect state health and human services spending.
