Good morning. After today, Capitol dwellers can take a breath.

Minnesota's revenue for the prior two months beat expectations from the last economic forecast. But state finance officials are warning that choppier waters are ahead. A quarterly economic update  says tax revenue exceeded predictions by 7 percent, or $244 million. That was mostly on the strength of stronger income tax collections. But the report lowers longer-term projections of economic growth by a considerable amount. That might mean a revenue slide in the future. Several measures of volatility are cited as growth slows, inflation remains elevated and tariffs jolt business decisions. But Minnesota's economic consultant is not predicting a recession for now.

Next week will narrow a bulging field in the Senate District 6 race. A primary on Tuesday will determine which of the eight Republicans will advance to the April 29 special election to fill the north-central seat left open by Justin Eichorn’s resignation. Our central Minnesota correspondent Kirsti Marohn has a preview of the race involving several candidates with a famous name and some with notable professions (a magician!). Kirsti learned why Jennifer Carnahan set her sights on the state Senate again (she ran unsuccessfully in 2016 for a Minneapolis seat), on Josh Gazelka’s attempt to join a chamber his dad once led and on the call Keri Heintzeman said she got from the Senate GOP leader encouraging her to run (she’s the wife of state Rep. Josh Heintzeman). The winner faces DFL-endorsed Denise Slipy in a district that favors Republicans.

U.S. Rep. Ilhan Omar has ruled out a run for U.S. Senate and will instead seek a fifth term. Clay Masters reports that Omar, a Minneapolis DFLer, went for what’s as close to a sure thing instead of trying to move chambers. The 5th Congressional District is one of the strongest for Democrats anywhere in the country and she won with almost 75 percent of the vote last fall. Omar said she wants to be a check on the Trump administration .  She has faced primary challenges — and could again — but dispensed with the last one easily. Omar didn’t endorse anyone for the Senate seat, which is an open-seat race due to the forthcoming retirement of Sen. Tina Smith.

Senate candidate Peggy Flanagan, the current lieutenant governor, picked up another big endorsement: Former Sen. Al Franken. He once held the seat that Flanagan is trying to win next year. Flanagan entered the race soon after Smith announced she’d forego reelection. Another DFL candidate is former state Sen. Melisa Lopez Franzen. In choosing Flanagan for his nod, Franken said “listens, fights and embodies the values that make Minnesota, well, Minnesotan.” There are two things to keep an eye on the coming weeks: Does U.S. Rep. Angie Craig announce her intentions and what will those early fundraising numbers due out next week show? Remember, that Craig can transfer whatever she raised for her U.S. House campaign over to a Senate run while Flanagan and Lopez Franzen were starting from scratch.

Craig’s decision on the U.S. Senate could determine how other dominoes fall. The 2nd Congressional District seat she’s held has been the main Minnesota battleground for several cycles, but might fall off the map if Craig opts for reelection. Sydney Kashiwagi at the Star Tribune has a story getting into the what-ifs based on Craig’s decision . Republican operatives tell her that they aren’t high on their chances of beating Craig for House, but do think they’d have a pathway to win the seat if it’s open. Tyler Kistner, Joe Teirab and Taylor Rahm — past GOP candidates in the 2nd — didn’t rule out running. DFLers are also sizing up a U.S. House run should the incumbent go in a new direction. The field could include a couple of sitting state senators like Erin Maye Quade and Matt Klein — potentially opening their seats — and a former state senator, Matt Little.

Legislative leaders and the governor had their latest closed-door meeting Thursday to talk about a bill for publicly financed construction projects.  They came out feeling optimistic that after failing to get one across the finish line last year they would be able to come together to approve one this year. The capital investment bill — known as a bonding bill — takes a higher threshold in each chamber to pass because it lets the state take on debt to buy bonds. And that means bipartisan buy-in is critical. “The good news from the meeting is there does appear to be a real desire to move on a bonding bill this year, which is the right place to begin,” said Senate Majority Leader Erin Murphy, DFL-St. Paul. “And I have a lot of confidence in the four chairs and their ability to begin to assemble based on the abundance of needs across the state of Minnesota, a proposal that could find its way through the Legislature this session.” Leaders and committee chairs are still negotiating what the price point on such a bill should be and whether the state can afford it. Senate targets for a bonding bill were nearly double those put forward by the House.

Both GOP and DFL leaders said they’re still hopeful, too, that lawmakers can land a two-year state budget on time. Committees have a noon deadline to move their bills through committee (though some waivers could be required). After lawmakers return from their Easter/Passover Break, they’ll kick up the pace to bring the bills to (and off of) the floor. Meanwhile, the leaders and Gov. Tim Walz will be hammering out a global agreement for budget targets. With those in hand, conference committees will begin ironing out differences between Senate and House budget bills. “We are trying to come up with that budget and get everything sealed up at this point,” GOP House Speaker Lisa Demuth said. 

One thing to watch for as budget negotiations move into a higher gear is how the Legislature manages or tries to manage the state government workforce. It takes people to carry out programs and laws passed by lawmakers, but the executive branch is headed up by the governor. A provision of a House state government finance package is honing in positions that might be slow to get filled or never get filled, a source of possible budget savings. The measure requires the Department of Minnesota Management and Budget to report back to the Legislature a few times — the first in February — on postings that have gone unfilled for at least six months. They also have to detail the type of jobs that are the hardest to fill or facing the most turnover. One of those items to keep an eye on as talks between the Legislature and governor move forward.