ST. PAUL — Gov. Tim Walz this week introduced his $52.4 billion plan for how the state ought to spend and tax over the next two years sparking immediate support from Democrats and blowback from Republicans and business groups.

The proposal kicks off a conversation about the state budget that is likely to continue through May. And lawmakers in the divided Statehouse will have to reach a compromise or risk a government shutdown.

Also this week, a key legislative leader said nonpriority legislation should be put aside this year to allow legislators and legislative staff to focus on the session's key issues: the budget and responding to COVID-19. That means contentious issues such as firearm restrictions, sports gambling or recreational marijuana could be off the table until 2022.

After a testy spell in the state Capitol, here's a recap of what happened this week in the Minnesota Legislature.

Walz rolls out 'COVID-19 recovery plan'

Newsletter signup for email alerts

Walz this week put out his $52.4 billion proposal, which he deemed his COVID-19 recovery plan. The budget framework would increase taxes on those who make more than $1 million a year and corporations profiting during the pandemic, and it would provide a tax offset for working families and lower-wage earners.

The plan would pull from new taxes, budget reserves and carryover funds to cover a projected $1.3 billion gap and increase funding to schools, businesses and struggling Minnesotans.

PREVIOUSLY: Walz proposes $52.4 billion budget plan, tax hike for highest earners

“This is a budget that reflects Minnesota’s sense that those who COVID hit the hardest we have to help,” Walz said. “We help our own.”

Republicans, who control the Minnesota Senate, pumped the brakes on the proposal before it even came out saying they'd block any proposed tax increases. Americans for Prosperity and the Minnesota Chamber of Commerce also said they had serious concerns about increasing taxes as Minnesotans fight to make it through the pandemic.

Democrats, education groups, labor unions and faith leaders, meanwhile, said the plan would give the Minnesotans hardest-hit by the pandemic survive as it presses on and prosper after it recedes.

Legislative leaders will lay out budget visions of their own in the coming weeks and then they'll spend most of the spring negotiating a spending plan that can satisfy both Republicans and Democrats.

Gazelka says lawmakers should stick to key issues

When asked about whether legislative leaders would support legislation that would legalize sports betting in Minnesota, Senate Majority Leader Paul Gazelka, R-East Gull Lake, said the proposal didn't have legs this year and broadened his comment to say many contentious issues would be pushed aside to make room for COVID-19 response and writing the budget.

"In a session that's almost impossible to navigate, we're not going to do a lot of new policy things, we're going to make sure we take care of the basics," Gazelka said. "Any major policy issue that has a lot of disagreement, I don't foresee happening this year."

Legislative leaders had similar remarks early in the legislative session and urged lawmakers to keep their focus narrow and avoid filing hundreds of bills and potentially overwhelming legislative staff. Despite that, hundreds of bills had been filed as of the end of the day Thursday.

READ MORE: See the latest from reporter Dana Ferguson in St. Paul

Debate boils over about rebuilding after Twin Cities riots

Tensions boiled over this week and promised to continue simmering as lawmakers took up a proposal to block damage from civil unrest from being eligible for state disaster aid. The plan would apply retroactively and make the Twin Cities ineligible for $12 million in state support Hennepin County received following rioting and arson fires in the days after police killed George Floyd.

Sen. Julie Rosen, R-Fairmont, brought forward the bill in the Senate and said Greater Minnesota taxpayers shouldn't have to put up money to clean up and rebuild after the civil unrest. State natural disaster funds shouldn't be put up for the damage that could've been avoided, she said.

"I've heard over and over again from Greater Minnesota, from my constituents, 'Please do not pay for this out of our taxpayer dollars,'" Rosen said. "I think there's other ways of dealing with this."

PREVIOUSLY: Damage from civil unrest wouldn't be covered by state disaster aid under Minnesota Senate plan

The proposal passed a Senate committee Monday and could come up for a vote on the Senate floor. A House companion is set for a series of long debates in committee, Rep. Gene Pelowski, D-Winona, said. And in both chambers, the measure found fierce opposition from Democrats who said the damage constituted a disaster.

“We must, as a state, enact legislation to take care of our communities,” Rep. Cedrick Frazier, D-New Hope, said, during a House committee hearing. “I couldn’t fathom the thought of not supplying disaster relief to Greater Minnesota when a tornado comes down.”

Walz as part of his budget proposal also proposed $150 million to issue grants to help rebuild the corridors affected by the civil unrest. Republicans said the plan was a nonstarter while Democrats said the funds were critical to rejuvenating the Twin Cities.

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