July 7, 2021 Update
Special session is over and there will be no government shutdown! The governor signed the last budget bill last night hours before the deadline which means nonprofits will not be impacted.
A win for the nonprofit sector was the volunteer mileage income tax subtraction for volunteer drivers. This means volunteer drivers will not have to count their reimbursement as income at the state level! Now onto the federal level fix! Thank you to the Volunteer Driver Coalition for your leadership and great advocacy to make this a win.
June 24, 2021 Update
As of this morning it seems likely, though not certain, that state leaders will finalize all pieces of the state budget by the June 30 deadline, and there will not be a state government shutdown. Read more from MinnPost here: With deals on education budget and money for frontline workers, Legislature closes in on finishing budget.
Original Update
It is possible, though unlikely, that Minnesota’s elected leaders will fail to enact all the pieces of the state budget by the June 30 deadline, and parts of the state government will go into shutdown. It appears more likely that leaders will get those bills completed on or before June 30, 2021, but late enough to cause disruption and negative consequences.
As negotiations continue, nonprofits need to think now about how to mitigate the possible impacts of budget delays or a state government shutdown on your organization and the communities you serve. Hopefully your preparation will be in vain.
So, what can you do to prepare for the potential consequences of a delay in completing the state budget or unlikely event of a state government shutdown? First, don’t panic! A lot can happen in the next couple of weeks. Next, think through these suggestions and questions to mitigate any negative impacts of a shutdown or late budget deal on your nonprofit.
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If you have state grants or contracts, check in with your grant manager(s). Ask them if your grant or contract could be affected by either a state government shutdown, or a very late passage of a state budget. Let the Minnesota Council of Nonprofits (MCN) know what you are hearing! Connect with Marie Ellis, public policy director, at mellis@minnesotanonprofits.org.
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If you have any work with the state that is in flux, get it squared away as soon as possible. If state agency staff are furloughed during a government shutdown, that contract that just needs a final signature might not have anyone available to sign it.
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If you need to renew a professional license, do that now, as there could be delays in licensing.
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Read up on how a shutdown this year could have greater impact than the 2011 shutdown. You may recall that in 2011 the judicial branch appointed a “special master” to determine what services and programs could receive temporary funding related to critical life and safety functions, but a 2017 Minnesota Supreme Court ruling would likely not allow the judicial branch to order funding this time around.
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Check news outlets to see what budget bills have passed. The state budget is set by a number of separate bills covering specific portions of the budget. Only those budget areas where no budget bill has been signed into law would be subject to the shutdown.
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Consider the impact on your communities and the public services they count on, and how that could impact your nonprofit’s work.
In the meantime, MCN’s policy and Minnesota Budget Project teams are continuing to urge the legislature and Governor Walz to enact a budget that responds to the ongoing impact of the pandemic and economic downturn on nonprofits and our communities. Our state budget choices should invest in ensuring that all Minnesotans can be safe, healthy, and economically secure, regardless of who they are or where they live. In the midst of a reckoning with our deep racial gaps, the state budget must also prioritize building a stronger and more equitable recovery.