After the defeat, Tim Walz faces the party’s sinking fortunes in Minnesota

Since returning to Minnesota after a failed vice presidential bid, Gov. Tim Walz has kept a relatively low profile. He comforted exhausted 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 quick break from the cold.

This week, Mr. Walz, a Democrat, must come to grips with his party’s sinking political fortunes in his home state as lawmakers begin meeting in St. Louis. Paul at what is expected to be an unusually harsh session of the state parliament.

Minnesota Democrats have controlled the governor’s mansion and the state legislature for the past two years, allowing them to pass a slew of liberal bills on abortion, marijuana and sick leave rights. But they are preparing for a new era of gridlock after losing a slim majority in the House of Representatives. Their control over the Senate is weak.

State budget officials released a grim assessment of Minnesota’s fiscal health last month, warning that spending is projected to exceed revenue in coming years. Officials said a $5.1 billion shortfall is possible by 2028. Under Democratic leadership, the state ran a $17.5 billion surplus at one point, prompting critics to question how tax dollars were spent.

“It’s going to be a tough, tough, really tough session,” said Blois Olson, a political analyst and communications strategist at the St. Paul. A threatening question in St. Paul is wondering if Mr. Walz to run for a third term in 2026 after, as many predict, a difficult return to government duties during the parliamentary session. “If he feels beaten up after that,” said Mr. Olson, “I think his chances of running again will be slim.”

Shortly after Mr. Walz returned from the national campaign in November, there were signs of new tensions at home. Mr. Walz has not been seen at public events with his lieutenant governor and running mate, Peggy Flanagan. Reports of disagreements over preparations for a potential succession plan for the governor’s job – should the Democratic Party win the White House – have come to light.

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

Addressing supporters in Minnesota shortly after the election, Mr. Walz said he struggled to understand why voters gave President-elect Donald J. Trump a second term. However, he promised to find areas of agreement with the conservatives.

“I think we, and I’m talking about myself, need to swallow some pride and try harder to find a common language with our neighbors who didn’t vote like us,” said Mr. Walz to a crowd of campaign volunteers and state employees who gathered in November at Eagan High School in Eagan, Minn.

Nevertheless, Mr. Walz also said he is “willing to stand up and fight” to protect the steps Minnesota Democrats have taken in recent years to expand abortion rights, tighten gun control, fight climate change and remain a welcoming state for immigrants.

As the new legislative session opens Tuesday, Democrats find themselves on the defensive amid an ongoing battle for control of the State House. The November election resulted in an even split in the house, but a judge found that the newly elected Democrat did not 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, Minnesota’s first female Republican in the House of Representatives, said her party’s gains should be read as a critique of the way Mr. Walz and fellow Democrats have steered the state sharply to the left since taking full control of the state capital in 2023. Democrats held the trifecta, passing policies that include legalizing recreational cannabis, funding free meals for nearly all students in the state, and requiring businesses to pay for family and medical leave.

“We’ve been trying to sound the alarm for the last two years, saying, Hey, let’s be a little more restrained,” Ms. Demuth said. “It was completely ignored.”

Rep. Melissa Hortman, the first female Democrat in the Minnesota House of Representatives, defended the party’s results.

“I wouldn’t change what we’ve been doing because we’ve invested in Minnesotans,” she said. “We made childcare cheaper. We set the construction of apartments as a high priority. We have made quite significant investments in state infrastructure projects.”

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

For now, deputies are preparing for an unusually stormy session. Democrats in the House of Representatives have promised to boycott the first weeks of the session until a special election for the contested seat is held at the end of January.

Democrats were poised to hold a one-seat majority in the Senate. But the death of a Democratic senator last month means the session will begin in a tie. To complicate matters, it is another democratic seat; Senator Nicole Mitchell is scheduled to go on trial later this month on felony burglary charges. She pleaded not guilty.

Larry Jacobs, director of the Center for the Study of Politics and Governance at the University of Minnesota, said he expected Republicans to use their growing power to undermine Mr. A waltz at every step.

“This is a real political war,” he said.

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

Finally, the list of Mr. Walza, led by Vice President Kamala Harris, lost key Midwestern states where she was expected to draw votes and won Minnesota by just four percentage points.

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

Mr. Walz also faces mounting questions, including from liberals, about the slow and uneven rollout of legalized recreational cannabis in Minnesota — one of the signature bills approved by Democrats in 2023. The Walz administration has yet to hire a permanent director of the Office of Cannabis Management. It is uncertain when the first urban dispensaries will open because the licensing process is bogged down by legal challenges.

In the past months, Mr. Walz has said in interviews with local news outlets that he has yet to decide whether he will run for a third term in 2026. If he does, there are signs he could be partnered with someone other than Ms. Flanagan, a former far-left political mentor, they said are political analysts.

An invitation to a fundraising luncheon recently sent out by Mr. Walz’s campaign listed Mr. Walz’s name along with that of his wife, Gwen, but not Miss Flanagan.

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

“Not only have they spent everything on these pet programs, which we think is ridiculous, but they’ve put us back into the deficit and raised our taxes,” said Alex Plechash, the new chairman of the Minnesota Republican Party. “It’s just inexcusable.”

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

Mr. Olson, a political analyst, warned that Mr. Walz could still find his political foothold. A lot can change, he said, in the first years of the new Trump administration.

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