Good morning.  Feel free to fish this weekend but be sure to take care of mom.

OMG the OIG is OTW, almost. The House overwhelmingly passed a bill creating an Office of Inspector General by a 127-5 vote. The bill has had a winding journey to this point, passing the Senate in 2025, but not the House. State representatives reworked the bill throughout this session, negotiating key provisions to find bipartisan support. The office is aimed at rooting out fraud and mismanagement in state government, which has come under the national spotlight following news that many millions of dollars had been siphoned from public human services programs by fraudsters. Rep. Matt Norris, DFL-Blaine, helped usher the bill through the House. “While the issue of fraud is an urgent one, the vast, unprecedented power of this office is the very reason why it was important for us to move in a thoughtful, diligent manner in crafting this legislation,” Norris said. “The bill has gotten better because of it, and this process has led us to a truly bipartisan, bicameral bill before us today. It had to cook a bit. We had to tweak the recipe, but the OIG turned out better than ever.” GOP members applauded the bill. “I hope that this is the beginning of the light at the end of the tunnel, this and some of the other things because Minnesotans are mad, and they deserve more,” said Republican Rep. Patti Anderson, R-Dellwood. The bill is expected to get approval from the Senate early next week and then head to Gov. Tim Walz, who said he would add his signature.

School systems across Minnesota say they're facing a dire funding emergency if the Legislature doesn't act to deal with a crucial funding issue. Those with high numbers of students living in poverty are especially hard hit, our colleague Elizabeth Shockman reports. The problem stems from a 2023 decision by the DFL-controlled Legislature and DFL. Gov. Tim Walz to make school meals free to all students . While school leaders cheered the effort, the law led to changes in the way the state calculated what’s known as compensatory revenue. That’s money districts get to support students from economically disadvantaged families. Instead of counting the kids who qualify for free or reduced-price school meals, districts were now only able to count kids who qualified for federal programs like Medicaid or SNAP. School leaders say that badly undercounts the kids who need help and could lead to districts losing millions of dollars if the Legislature doesn't continue supporting a hold-harmless provision that's set to expire. 

Speaking of education funding, a proposal to increase funding from a state lands fund is heading to the ballot this fall. The Senate approved a proposal yesterday to increase the amount of money schools get each year from a trust account that comes from the state leasing land for extraction such as mining and logging. Under state law, those annual payments are limited to around 2 to 2.5 percent of the fund balance. The bill approved by the Senate and the House will send a constitutional amendment to voters that would increase that annual payout to schools by tens of millions of dollars. Sen. Mary Kunesh, DFL-New Brighton, said, “This bill proposes to enhance the revenue generated from the School Trust Fund, ensuring that our schools receive the financial support they deserve." After getting through the House earlier this week, it’s ballot bound because a governor doesn’t get a say in constitutional amendment legislation. Voters will decide the issue in November, and we can’t rule out one or two more being added.

The director of Minnesota’s Missing and Murdered Indigenous Relatives office, Guadalupe Lopez, has been terminated less than a year after being appointed to the position. She spoke with MPR News Thursday morning , saying she was “shocked” by the move, which happened Wednesday. Earlier this week, she took part in a ceremony marking National Missing and Murdered Indigenous Relatives Day. State officials confirmed Lopez’s departure but said they could not comment on the reason for it. The MMIR office was established in 2021 to address disproportionate rates of violence and missing-persons cases affecting Minnesota’s Indigenous communities. Lopez took on the role last summer. She told MPR News after she was let go that she was told she had “made some poor leadership decisions.” But she told MPR that she did not think her leadership style and advocacy worked well within state government. “I think that it is hard for an Indigenous person to be in state systems. The cultural competency definitely wasn’t there,” she said.

Amy Klobuchar has detailed some of her proposals in her governor’s campaign, and she’ll be on Politics Friday this week for the first time since getting into the race. No matter what, Minnesota will have a new governor next year. That person will bring a new agenda, a new team and likely a new governing philosophy to the state’s top office. How dramatic the shift depends on who wins and which party they’re from. Friday at noon , MPR News politics editor Brian Bakst speaks with Klobuchar about her campaign, including an initial rundown of proposals she says she’ll pursue if elected. It’s the latest of our opening conversations with the leading candidates. Then, a pair of exit interviews with state lawmakers who have a combined eight decades of service at the Capitol. The Legislature is barreling toward its conclusion, so we’ll check in with our state Capitol team as well.

A federal judge has issued a stay in the lawsuit Minnesota filed against the federal government over withheld Medicaid dollars. U.S. District Judge Eric Tostrud issued his four-month stay in the case at the request of both the state and the Centers for Medicare and Medicaid Services, which held back more than $240 million after administrator Mehmet Oz criticized the state’s fraud controls. Minnesota’s Department of Human Services presented a corrective action plan but so far the money remains tied up. The judge’s order indicates that an out-of-court resolution could be in the works. If one isn’t reached, the parties must give the court a status update on Sept. 3. 

A bill curbing the power of Minnesota homeowners associations is heading to the governor's desk. Residents say HOAs currently have too much authority to impose fees and sanctions. DFL Senator Susan Pha, of Brooklyn Park, worked with a bipartisan group of lawmakers to pass the bill. "HOAs can start the process of foreclosure on any homeowners who are late one day from the due date of their dues and assessments — one day, that's it,” Pha said during a floor speech this week. “That should scare the hell out of you and it scares a hell out of the 1.7 million homeowners that live in an HOA in the state of Minnesota." The bill caps HOA fines and bans board members from self dealing or charging legal fees for questions. It also allows two-thirds of residents to vote to dissolve an HOA.