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MN Legislature nears agreement for COVID-19 aid to cities, counties

By David H. Montgomery

Lawmakers are preparing to distribute hundreds of millions of dollars to Minnesota cities hit hard by the COVID-19 pandemic.

The money is Minnesota’s share of $150 billion distributed to state and local governments under the federal Coronavirus Aid, Relief and Economic Security Act, or CARES Act. About $316 million went directly to the state’s two most populous counties, Hennepin and Ramsey, under the terms of the federal law. Now the state gets to distribute $841 million more to smaller local governments.

Leaders in both parties say they expect to pass a bill distributing money to local governments this week, before the Legislature adjourns its special session.

The compromise bill being advanced right now would distribute the $841 million based on population. Each city would get about $75 per resident, which adds up to:

•$32.3 million for Minneapolis
•$6.7 million for Bloomington
•$1 million for Worthington, Minn.
•$257,000 for Ely, Minn.

Small towns would get $25 per resident. The smallest towns with less than 200 residents would get nothing directly, but could apply for reimbursement to their counties, which would get around $120 per resident.

“We have to get this done,” said Rep. Paul Marquart, a Dilworth, Minn., Democrat who helped negotiate the measure. “These local units of government have had these expenses dealing with the COVID-19 pandemic.”

The money can be used to cover unplanned expenditures related to the COVID-19 pandemic, which includes direct health expenditures as well as things like paying worker compensation for emergency responders who get COVID-19. Counties must also spend at least 10 percent of their money on direct relief for businesses and individuals, and can spend more on direct relief if they choose.

Any money that’s not spent by late 2020 has to be returned to the state to be used for statewide coronavirus relief, with the exception of unspent money in Hennepin and Ramsey counties, which would instead be redirected to Hennepin Healthcare and Regions Hospital.

Gov. Tim Walz has not formally signed off on the bill, though Revenue Commissioner Cynthia Bauerly has been working with lawmakers on details of the proposal “to make sure it will be administered correctly,” she told a Senate committee Monday.

The Walz administration had previously pushed to hold some of the money back temporarily, in case local governments need extra assistance later in the year. But legislative Democrats agreed to distribute all the money right away in a compromise with Republicans.

In exchange, city governments in Hennepin and Ramsey counties will get direct funding under the bill, rather than relying on what their counties passed on from the money they got directly from the federal government.

Walz “remains committed to working with the legislature to get funding for local governments out the door as quickly as possible,” spokesperson Teddy Tschann said.

Lawmakers also considered a system that awarded more money to places with worse outbreaks, but settled on evenly distributing the money based on population. Lobbyists for local governments backed a per capita distribution as fairer, and even lawmakers who liked the idea of distributing money based on need admitted it would be more complicated to administer.

“I don’t care if you are little Martin County and you only have (20,000) people in that county, it’s still a strain on the services that you’re providing,” said Sen. Julie Rosen, R-Vernon Center, another of the bill’s chief negotiators. “Everyone has gotten prepared.”

If lawmakers pass the bill this week as planned, the money will be distributed to local governments by June 30.