Billions in relief bill headed to Minnesota governments and businesses

Hunter Woodall, Jim Spencer, Star Tribune
·5 min read

WASHINGTON – Minnesota's state and local governments, its ailing hospitality industry, struggling small businesses and the agricultural sector will benefit from the $1.9 trillion COVID relief package on its way to President Joe Biden.

An estimated nearly $4.9 billion will flow to Minnesota governments, including almost $2.6 billion to the state and another $2.1 billion for cities, counties and other local governments.

"The impact of this bill is going to be seen and felt by people in Minnesota right away, and it's going to make a big difference as they're digging themselves out of what's been a really terrible public health and economic crisis," said Democratic U.S. Sen. Tina Smith in an interview.

Cities across the state are already looking ahead to what the money can do locally. St. Cloud Mayor Dave Kleis says as his city tries to move forward, this latest round of local aid, an estimated $15.7 million, is a critical piece.

"Does it make us whole from what's happened in the last year? No, absolutely not," said the former Republican state senator, who describes himself as an independent. "But it will move us in that right direction."

Kleis says the pandemic has forced the city to delay infrastructure projects from roads to parking. Revenue was hit hard and the money that was available focused on public safety along with more critical infrastructure such as sewer and water, he said.

The federal funding comes with some limitations, but it does allow the money to be spent on infrastructure for broadband, sewer and water and "premium pay" for essential workers.

State and local governments can use the aid to cover pandemic response costs and the resulting "negative economic impacts" from the public health crisis, according to the bill, while also using it to help replace revenue losses due to the virus. Tribal communities nationwide are also slated to get $20 billion in aid.

Moments after the House passed the bill on Wednesday, Minneapolis City Council members gave a warm welcome to U.S. Rep. Ilhan Omar, appearing at a virtual committee meeting to provide an update on immigration policies. The city is expected to get $281 million from the aid package.

"Hopefully within a few hours that bill will be signed into law and our constituents will feel, as the mayor of Minneapolis just texted me, the gigantic relief that they will get," Omar, a Democrat said.

Mayor Jacob Frey's office noted in a press release that priorities for the money range from "supporting inclusive small business and community recovery measures" to spending that would help "ensure continuity of core city services."

In St. Louis County, administrator Kevin Gray outlined several areas where the projected $54 million could be spent to boost economic recovery, including helping small businesses hurt by shutdowns and reinstating curbed social service programs. He also said the sprawling rural county will look to expand broadband to improve virtual services.

The city of Rochester is estimated to get more than $17 million in aid, which can help the city "be resilient," said Rochester's deputy city administrator Aaron Parrish.

"For us, this funding really allows us the opportunity to address some of the disparities that we're seeing both in the distribution of the vaccine, as well as the impacts associated with job loss and other things with COVID," Parrish said.

In the northwestern suburb of Plymouth, City Manager Dave Callister admitted that the city was still "looking for a little more definition," when it came to how localities can spend the incoming aid in certain areas.

"It's a little gray, a little fuzzy, as to what's qualified and what isn't," Callister said.

But the package is far broader than state and local aid. Other major provisions include $1,400 checks for many Minnesotans, boosting the child tax credit for this year and billions toward vaccination and public health programs nationally.

The pairing of relief payments with a robust vaccination program was essential, said Charlie Weaver, director of the Minnesota Business Partnership, a group of the state's most powerful chief executives.

An economic stimulus can only succeed if the vaccination program succeeds in getting businesses operating at full capacity, Weaver noted. He said partnership members believe the comprehensive effort is headed in the right direction.

"Compared to where we were 30 days ago, there is much more optimism about getting the vaccine into people's arms," Weaver said.

The bill also includes a $25-$28 billion relief fund aimed at restaurants that suffered as a result of lockdowns and still cannot operate at maximum capacity.

The restaurant rescue "is something Hospitality Minnesota has been advocating for over the past year," said Liz Rammers, the group's president. "It will be a crucial tool for reinvigorating our economy and helping our restaurants, lodging and leisure properties, bars, event venues and their employees dig out from a deep economic hole."

Rammer also believes state leaders should make "further investment toward hospitality recovery," given Minnesota's projected $1.6 billion surplus and the billions in federal aid the state will receive.

Minnesota farmers will benefit from a portion of a $3.6 billion national fund that lets the U.S. Department of Agriculture buy commodities from American farmers to stock food banks. A debt relief program for farmers from minority groups is also included.

"As the pandemic and economic crisis continue, funding for nutrition and hunger assistance are critical to support the most impacted populations across America and we are pleased to see these provisions in the American Rescue Plan," said agricultural giant Cargill in a statement. "We also recognize the disproportionate impact that COVID-19 and the downturn in the farm economy have had on Black farmers, ranchers and producers."

Minnesota Farm Bureau president Kevin Paap also welcomed the legislation.

"We were pleased to see more than $3 billion will be dedicated to strengthening the food and agriculture supply chains," he said. "We all saw the weaknesses of the supply chains in the pandemic and it's important to address them. Congress also heard our request for relief for small meat and poultry processors who are grappling with COVID-related backlogs and included $100 million in overtime fee relief for them."

Staff writer Liz Navratil contributed to this report.

Jim Spencer • 202-662-7432

Hunter Woodall • 612-673-4559