An update on the forecast for Minnesota’s economy
On Tuesday, May 5t, Minnesota received an updated economic forecast. According to the latest data, the COVID-19 pandemic is having a major impact on state finances. The good news is that Minnesota has the resources to weather the worst of this public health crisis and provide economic security to people least likely to have it. This is the result of the hard work of Minnesotans over the past decade combined with our fiscally responsible approach to budgeting.
In 2013, the Legislature and Governor Dayton restored stability to the state budget for the first time in years. The following year, we made an intentional effort to protect Minnesotans from future economic downturns (like the one we find ourselves in now) by creating a budget reserve, also known as the state’s “rainy day fund.” As a result of our actions, Minnesota has built a reserve totalling $2.359 billion. At the time we enacted this legislation, Minnesota had a $0 rainy day fund.
This year, the federal government has appropriated billions in financial assistance to address economic hardship caused by COVID-19. Of those federal dollars, Minnesota received $1.87 billion. Around the country, we are seeing calls for the federal government to create a new plan that specifically addresses the financial challenges that states and local governments are facing. I encourage you to call Jim Hagedorn, First District Congressman, at (202) 225-2472 and ask him to support new assistance for our cities, counties, and state, and to reject the suggestions from other members of Congress who in the past have said local governments should go bankrupt.
Already, some lawmakers say we need to abandon any hope of helping Minnesotans weather this storm and take an austerity approach to solve our financial challenges. This is not the time to pull back support for struggling workers, businesses, and families. On the contrary, this is the exact time that the Legislature should provide a robust safety net so we safely re-open the economy and come out stronger on the other side of this pandemic. Without investments to provide economic security, including safe housing, for those least likely to have it, we could expect our economy to remain closed far longer and re-open far more slowly.
On May 7, the Minnesota House of Representatives approved a new economic security package to help out our workers, small businesses, and families. The plan we created provides $100 million in housing assistance for renters and landlords; creates new loans for small businesses (20 employees or less); invests in better broadband access especially focused on telehealth and schools; and provides a bigger paycheck for personal care attendants — the individuals who help the most vulnerable Minnesotans live with dignity. These are exactly the kind of investments we need to help Minnesotans weather the worst of the pandemic as scientists race toward creating a vaccine and treatment for COVID-19 (of which none exists right now).
In addition, new legislation to help farmers and our agriculture community is advancing in both the Minnesota House and Senate, and I am proud to report these measures are supported by lawmakers on both sides of the aisle. In the coming days, we can expect the Legislature to approve another extension of the deadline for farmer-lender mediation, and additional support for mental health and assistance in rural communities.
The 2020 legislative session is required by our state Constitution to adjourn by May 18, but a special session, or sessions, could occur over the summer as we continue to learn more about the impact of COVID-19 and how to mitigate public health risks. Thus far, the Legislature has been working on a bipartisan basis with Governor Walz and the people of Minnesota to protect public health and address economic hardship created by the COVID-19 pandemic. We will continue to do so as this crisis evolves.
Minnesotans care about each other, and we help each other out in tough times. Our current challenge is no different, and I expect our state will come out of this stronger, more compassionate, and more determined than ever to build a better future for all Minnesotans.