State faces $2.4B budget hole due to virus

Published 9:56 am Wednesday, May 6, 2020

MPR News Staff

Minnesota’s economy won’t recover from the coronavirus anytime soon, and the state faces a $2.4 billion budget deficit lasting well into next year.

That was Minnesota budget leaders’ bleak economic forecast unveiled Tuesday. COVID-19 costs “have rocked Minnesota’s economy” and will continue to do so until the crisis ends, state economist Laura Kalambokidis said.

Budget forecasts showed big drops in consumer spending, sales taxes and wages. The state’s economic output is expected to drop three consecutive quarters before a return to positive territory, but it “does not get back to where it would have been without the pandemic,” Kalambokidis said. “Some amount of economic activity is simply lost.”

The worrisome budget projections arrived shortly after the Health Department reported 27 new deaths on Tuesday along with record high counts of people currently hospitalized and in intensive care.

Here are the latest coronavirus statistics:

•7,851 confirmed cases via 88,009 tests
•455 deaths
•1,350 cases requiring hospitalization
•434 people remain hospitalized; 182 in intensive care
•4,614 patients recovered

The number of cases discovered in Minnesota has accelerated sharply over the past week as the state’s testing push intensified.

“Minnesota’s numbers, we are not at our peak yet,” Gov. Tim Walz said. “There are some dark days ahead of us. But we have changed the calculus on this.”

No ‘red alarm’ yet as cases as ICU numbers climb

Health Commissioner Jan Malcolm said the latest numbers on deaths showed the ongoing trend Minnesota’s seen since the pandemic began — nearly all of those who died were living in long-term care facilities and had underlying health problems.

Despite the increase officials are seeing now in cases and hospitalizations, she said the climb remained within the state’s ability to manage it so it does not overwhelm the health care system.

Two key metrics — how long it takes for the raw case count to double and how long it takes for current hospitalizations to double — remained relatively moderate. The “red alarm” will sound if and when case counts start doubling every two to three days; right now it’s about eight days, she said.

One other positive: Patients needing ICU care aren’t rising as quickly as current hospitalizations. “We’re still feeling good about that,” she added.

She cautioned, though, that Minnesota was not yet at the steepest part of its curve.

New cases continue to center around meatpacking plants
The jump in positive cases continues to be driven by a handful of counties with outbreaks centered around meatpacking plants. Testing has intensified around those outbreaks and led to more positive tests for the disease.

Cases in Nobles County in southwestern Minnesota, where an outbreak centered around the JBS pork plant in Worthington, continue to swell. The county continued to have the largest outbreak outside the Twin Cities and the largest by far of any Minnesota county relative to its population.

About 1 in 20 people in Nobles County have tested positive for COVID-19. Cases there have jumped from a handful in mid-April to 1,069 on Tuesday as testing in the region accelerates and reveals more cases.

The JBS plant shut on April 20 as executives worked to control the disease’s spread. The union representing workers at JBS said Sunday that it’s been told the facility will reopen on Wednesday. In a statement, union leaders said workers will be spaced farther apart and the plant will expand cleaning and disinfecting.

The closure of the plant and others in the Midwest has caused major disruption in the supply chain, with some hog farmers forced to kill healthy pigs because there was no place to process them.

Similar problems were reported in Stearns County, where COVID-19 cases tied to two packing plants — Pilgrim’s Pride poultry plant in Cold Spring and Jennie-O Turkey in Melrose — have skyrocketed. An undisclosed number of workers at both plants have tested positive for the virus.

At the beginning of last week, there were 55 confirmed coronavirus cases in Stearns. By Sunday, as testing for the disease intensified, there were 589 and by Tuesday confirmed cases had jumped again to 815.

Kandiyohi County in west-central Minnesota is also seeing cases jump two weeks after officials with the Jennie-O turkey processing plant there said some employees had tested positive for the coronavirus. The county had confirmed three COVID-19 cases back then. On Tuesday, the Health Department reported 200 people have now tested positive.

Some businesses back to work, others frustrated
The governor has said about 91 percent of Minnesota’s workforce is now able to return to their workplaces with hygiene and distancing rules in place, under his tweaked stay-at-home order.

Walz fielded similar questions Tuesday amid news that some businesses and communities were chafing at the stay-at-home order, which has been running for more than a month.

The order kept people out of crowded public spaces, helping slow the outbreak and buying time for the state’s health care system to secure supplies and prepare for waves of cases and hospitalizations.

But, as Walz has acknowledged, it’s come at a steep economic cost for many who’ve been thrown out of work. Restaurants and bars remain the biggest sector still unable to bring customers back into their buildings.

Earlier this week a Twin Cities barbershop publicly defied Walz’s order and opened his shop to customers. Leaders in the town of Lakefield, in southwestern Minnesota, recently voted to support businesses that want to defy Walz’s order and reopen. GOP leaders have also prodded Walz to move faster, even as COVID-19 cases continue to climb.

“I want things open as badly as they do,” the governor said, adding that reopening the wrong way could rekindle the disease’s spread and put the lives of vulnerable people at risk.

“This is one of those difficult things that, if we do this right, it’ll appear like we’re wrong because we didn’t overrun the health care system,” he said. “It’s a bit like someone who can’t swim, and you keep them out of the water. Whether you can claim you kept them from drowning might have been a little debatable, but if they had jumped in the deep end, it would have been trouble.”