It takes money to make money.
The omnibus employment and economic development bill would spend $1.6 billion on programs ranging from helping businesses recover from COVID-19 restrictions and civil unrest to subsidizing child care so new parents can work.
Rep. Mohamud Noor (DFL-Mpls), who sponsors the bill with Sen. Eric Pratt (R-Prior Lake), says spending the money will boost Minnesota’s economy, which means higher tax collections for the state. He said the bill has something for workers and businesses alike.
“The time to invest, the time to develop an economy that works for all, is now,” Noor said. “…If we dream big we can achieve big.”
The two-year budget bill would spend 11.3% above the base amount in the 2022-23 biennium.
It would set budgets and policies for the Department of Employment and Economic Development, the Department of Labor and Industry, the Bureau of Mediation Services, and Workers’ Compensation Court of Appeals.Of the $1.6 billion proposed, $424.1 million would come from the General Fund in the 2022-23 biennium, $130 million from the workforce development fund, and $117.1 million from the workers’ compensation fund.
And this budget cycle, there’s a larger than usual amount of money from the federal government: $694.3 million to be exact.
On the topic of federal funds, the bill contains a provision requiring the Department of Employment and Economic Development to apply for $70 million from the American Rescue Plan Act of 2021 to fund the department’s Border-to-Border Broadband Development Grant Program that expands broadband service in Greater Minnesota.
[MORE: View the spreadsheet]
Two new economic revitalization programs
Much of the increase over base is a $150 million appropriation to fund the Main Street Economic Revitalization Program with $80 million, and the Main Street COVID-19 Relief Grant Program with $70 million. Both programs are funded by one-time General Fund appropriations in fiscal year 2022.
“This bill will help revitalize our main streets,” Noor said.
“But we know this amount is not enough,” he added, explaining that he hopes the state’s $150 million investment becomes “a call for public, private, and non-profit partnerships to rebuild our economy.”
However, Rep. Barb Haley (R-Red Wing) said the bill would not be able to accomplish its objectives
“Minnesota’s economic recovery is lagging behind 41 other states,” Haley said. “And this is a jobs bill and it doesn’t do enough to get us back on the road to recovery.”
The revitalization program would distribute $80 million in grants and guaranteed loans for projects that “address the greatest economic development and redevelopment needs” of a community that have arisen since March 15, 2020, meaning that business damaged by last year’s civil unrest would be eligible.
However, provisions in the bill would require grants and loans to be proportionally distributed between the metro area and Greater Minnesota. But beginning in fiscal year 2024, remaining grant and loan funds could be distributed anywhere in the state without regard to geographic balance.
Grants would be limited to $750,000 and could be used to finance no more than 30% of an eligible rebuilding or replacement project. Guaranteed loans would be no more than $2 million and have a term of no more than 15 years.
The Main Street COVID-19 Relief Grant Program would distribute $70 million to assist businesses affected by the pandemic. Minnesota businesses employing fewer than the equivalent of 200 full-time workers would be eligible for grants, and priority would be given to businesses that did not receive previous state assistance under certain other economic relief programs.
Grant funds would need to be used for working capital to support payroll expenses, rent or mortgage payments, utility bills, and other similar expenses.
What’s in the bill
In addition to funding the two Main Street programs, other provisions in the bill would appropriate:
Some notable policy provisions would:
House provisions left out of the bill
Several House-sponsored policy and appropriations provisions sent to the omnibus employment and economic development conference committee in April did not make the final bill, including:
There were more than a dozen amendments offered to the bill, almost all by Republicans. But the only amendment adopted was offered by Rep. Dave Lislegard (DFL-Aurora), which supporters say would improve worker safety at petroleum refineries. It was adopted by a vote of 73-57
Republican amendments that were not adopted include one proposal that would have given $2,000 to unemployed workers currently collecting state unemployment insurance benefits who get jobs, stop requesting benefit payments and remain with their employers for at least 90 days. It was defeated on a voice vote.
Another, which was ruled out of order, would have provided a sales tax exemption for many hospitality businesses.