The COVID-19 pandemic has brought into focus many weaknesses in the state’s economy that need to be addressed before it can even start to return to pre-pandemic levels.
Those issues were highlighted Monday to the House Workforce and Business Development Finance and Policy Committee.
“This has been an unprecedented and challenging year for both workers and businesses,” said Steve Grove, commissioner of the Department of Employment and Economic Development, during a budget presentation.
Several items in Gov. Tim Walz’s budget are crucial to helping both workers and businesses not just weather the pandemic, but to grow and thrive when the pandemic eases, he said. These include:
The $50 million in forgivable loans would support the cultural, entertainment, and hospitality industries that have been hardest hit by the pandemic, Grove said. The program also includes set-asides for businesses with fewer than six employees, minority-owned businesses, and ethnic malls.
The Paid Family and Medical Leave Insurance program would be structured like the state’s Unemployment Insurance program, which is self-funded through payroll taxes on workers and employers.
However, to get the program started, Grove said the governor’s budget includes a one-time appropriation of $11.4 million from the General Fund in fiscal year 2022.
Although the pandemic has exposed some shortcomings in the state’s economy, Grove said it has also revealed how the state can be an active partner with both workers and private businesses to achieve shared goals.
“It is in times of great challenge that government needs to step in and help an economy survive and thrive,” he said.
Fortunately, Grove said the state has a very diverse economy that will help it recover more quickly than other states with less economic diversity.
The committee took no action, but will do so later when DEED funding bills are heard by the committee in the coming weeks, said Rep. Mohamud Noor (DFL-Mpls), the committee chair.