Gov. Tim Walz, Speaker Melissa Hortman and Majority Leader Paul Gazelka late Sunday collectively announced a budget deal that includes a $540 million E-12 funding increase in the next year, 2% on the General Education Formula each of the next two years and $40 million for broadband access.

That leaves about $150 million to potentially tackle special education and School Readiness Plus funding that is set to expire.

The three leaders announced the budget agreement late Sunday to avoid a protracted special session. The legislature is constitutionally required to adjourn the regular budget session at midnight on Monday.

The budget conference committees worked through Sunday night and will work all day on Monday to finish up the details of their bills. The plan as of now is for Gov. Walz to call them into a one-day special session on Thursday to pass the finished products.

The broader picture of the budget agreement delivers a marquee victory for the GOP in killing off any gas tax increase and a marquee victory for the DFL in getting the provider tax reinstated at a 1.8% rate (currently 2%, but set to expire at the end of this year).

The tax bill will be the most intriguing as it is said to be a net zero increase with tax conformity, but there’s a second tier income tax rate cut included, taking the current 7.05% cut down to 6.8%. Speculation is that conformity on the corporate tax provisions will actually generate some new revenue in the tails.

Levy equalization and additional Ag2School relief are still in play.