After Loss, Tim Walz Faces Party’s Sinking Fortunes in Minnesota

Since returning to Minnesota after a failed bid for vice president, Gov. Tim Walz has kept a relatively low profile. He consoled deflated supporters with a speech at a high school, posed for photos with a turkey at the Minnesota State Capitol to mark Thanksgiving and flew to the Bahamas for a brief respite from the cold.

This week, Mr. Walz, a Democrat, must start grappling in earnest with his party’s sinking political fortunes in his home state as lawmakers begin meeting in St. Paul for what is expected to be an unusually acrimonious state legislative session.

Minnesota Democrats controlled the governor’s mansion and the State Legislature the past two years, allowing them to pass a trove of liberal laws on abortion rights, marijuana and medical leave. But they are bracing for a new era of gridlock, having lost their slim majority in the House. Their control of the Senate is tenuous.

State budget officials last month issued a grim assessment of Minnesota’s fiscal health, warning that spending is projected to exceed revenue in coming years. The officials said a $5.1 billion deficit is possible by 2028. Under the Democrats’ leadership, the state had a $17.5 billion surplus at one point, leading critics to question how tax dollars have been spent.

“It’s going to be an arduous, hard, really tough session,” said Blois Olson, a political analyst and communications strategist in St. Paul. A looming question in St. Paul is whether Mr. Walz will seek a third term in 2026 after what many say they anticipate could be a bruising return to his state duties during the legislative session. “If he feels beat up after that,” Mr. Olson said, “I think his prospects of running again are going to be low.”

Shortly after Mr. Walz returned from the national campaign trail in November, signs arose of new tensions at home. Mr. Walz was not seen at public events with his lieutenant governor and running mate, Peggy Flanagan. Reports of a falling out over preparations for a potential succession plan for the governor’s job — in the case of a Democratic win of the White House — spilled into the open.

Mr. Walz and Ms. Flanagan, an outspoken supporter of the governor since they were first elected together in 2018, declined requests for interviews for this story.

Speaking to supporters in Minnesota shortly after the election, Mr. Walz said that he had been struggling to understand why voters gave President-elect Donald J. Trump a second term in office. Still, he pledged to find areas of agreement with conservatives.

“I think we, and I’m speaking about myself, need to swallow a little bit of pride and try harder to find common ground with our neighbors who didn’t vote like we did,” Mr. Walz told a crowd of campaign volunteers and government employees who gathered in November at Eagan High School in Eagan, Minn.

Yet Mr. Walz also said that he was “ready to stand up and fight” to safeguard the steps that Minnesota Democrats had taken in recent years to expand abortion rights, tighten gun controls, fight climate change and remain a welcoming state for immigrants.

As the new legislative session opens on Tuesday, Democrats find themselves on the defensive amid an ongoing fight over control of the Statehouse. November’s election left an even split in the chamber, but a judge found that a newly elected Democrat failed to meet the residency requirements for his seat. That means Republicans will start the session with a one-seat majority, at least until a special election is held.

Representative Lisa Demuth, the top Republican in the Minnesota House, said her party’s gains in the election should be interpreted as a rebuke of the ways Mr. Walz and fellow Democrats had steered the state sharply to the left since they assumed full control in the capital in 2023. When Democrats held a trifecta, they passed policies that included legalizing recreational cannabis, funding free meals for virtually all students in the state and requiring that businesses pay for family and medical leave.

“We tried to sound the alarms over the last two years, saying, Hey, let’s exercise a little bit of restraint,” Ms. Demuth said. “That was completely ignored.”

Representative Melissa Hortman, the top Democrat in the Minnesota House, defended the party’s record.

“I wouldn’t change what we did because we invested in Minnesotans,” she said. “We made child care cheaper. We made getting housing built a high priority. We made some pretty considerable investments in state infrastructure projects.”

In recent decades, divided government has been more common than full party control in Minnesota, she said, adding that she was confident lawmakers would find common ground in the coming months as they work to pass a budget for the next two years.

For now, lawmakers are bracing for an unusually turbulent session. House Democrats have vowed to boycott the first weeks of the session until a special election for the disputed seat can be held in late January.

Democrats had been poised to hold a one-seat majority in the Senate. But the death of a Democratic senator last month means they will start the session with a tie. Complicating matters, another Democratic seat is in question; Senator Nicole Mitchell is scheduled to be tried later this month on a felony burglary charge. She has pleaded not guilty.

Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota, said he expected that Republicans would use their growing clout to undermine Mr. Walz at every turn.

“This is full-out political warfare,” he said.

As a candidate for vice president, Mr. Walz presented himself as a moderate politician with working-class roots and an impressive governing record. But in the national spotlight, Mr. Walz faced questions over whether he had steered Minnesota too far to the left.

In the end, Mr. Walz’s ticket, led by Vice President Kamala Harris, lost key Midwest battleground states where Mr. Walz had been expected to attract votes and won Minnesota by only four percentage points.

Mr. Walz has announced only one major legislative initiative in the lead-up to the new session: After years of criticism that state agencies lacked safeguards to identify and prevent brazen theft schemes, Mr. Walz recently announced a package of efforts to stop fraud in government. Mr. Walz’s critics portrayed the move as an exercise in damage control.

Mr. Walz also faces growing questions, including from liberals, over the slow and bumpy rollout of legalized recreational cannabis in Minnesota — one of the signature laws approved by Democrats in 2023. Mr. Walz’s administration has yet to hire a permanent director for the Office of Cannabis Management. It’s uncertain when the first urban dispensaries will open because the process to issue licenses has been snarled by legal challenges.

In recent months, Mr. Walz has said in interviews with local news media outlets that he had yet to decide whether to seek a third term in 2026. If he does, there are signs he might partner with someone other than Ms. Flanagan, a one-time political mentor who has been farther to the left, political analysts said.

An invitation for a fund-raising lunch sent recently by Mr. Walz’s campaign operation listed Mr. Walz’s name along with that of his wife, Gwen, but not Ms. Flanagan.

Republican leaders in Minnesota said they were optimistic about their prospects in 2026, when they intend to blame Democrats for spending the state’s sizable surplus.

“Not only did they spend it all on these pet programs, which in our view is ridiculous, but they put us back into a deficit and raised our taxes,” said Alex Plechash, the new chairman of the Minnesota Republican Party. “That is just unforgivable.”

Ken Martin, chairman of the state’s Democratic Party, who is seeking to lead the Democratic National Committee, declined an interview request.

Mr. Olson, the political consultant, cautioned that Mr. Walz may yet find his political footing. Much can shift, he said, in the early years of a new Trump administration.

“Eighteen months is a lifetime in this business,” he said.