Feb. 18, 2022
It turns out, $73 billion has a way of changing the way you look at things.
During a hearing on Feb. 17 on federal COVID-19 relief funds received by the state, Sen. Michelle Benson noticed a difference in the slides presented by Minnesota Management and Budget. Rather than the last three digits being left off to shorten the numbers, the last six digits were removed in order to simplify the explanation of how money flowed to Minnesota in COVID-19 relief.
“The amount of money has gotten so big, we’re used to seeing in the upper corner the notation that the numbers are in thousands,” the Ham Lake Republican said. “On this slide, the notations are in millions. This is how big these numbers have gotten.”
The slide included one big number in particular, showing how much total federal money — in both direct grants to state and local governments and in grants to individuals — Minnesota benefited from in less than two years: $72.7 billion.
In addition to some smaller allotments from Congress, the money primarily came from three big federal laws: the CARES Act of March 2020; the Coronavirus Response and Relief Act of December 2020; and the American Rescue Plan Act of March 2021. The total value of those three acts was $5.3 trillion.
The state was given $11.5 billion, with nearly $900 million for housing aid; $720 million in child care assistance; and $1.7 billion in health and human services enhancements. Of that money, $3.86 billion were “flexible funds,” and could be spent as the state wished as long as it was related to responding to the public health, economic and social impacts of the pandemic.
In addition, local governments were given $3.3 billion, the health care system received $3.3 billion, and transportation systems — including airports and transit agencies — received $1.3 billion.
The biggest amount went not to the state but directly to residents in the form of extra unemployment compensation, stimulus checks and business grants and loans. That amount totaled $51 billion. All of that money is the best explanation for why the state economy, and state tax collections, not only didn’t fall as much as feared but actually grew during the pandemic.
Rather than facing a once-predicted deficit, the state has a record-high budget surplus of $7.75 billion, plus more than $1 billion in money still unspent from ARPA.
“Staggering. Staggering,” said Senate Finance Committee Chair Julie Rosen, R-Fairmont. “It really hits you when you see it on paper. It makes my knees crumble.”
“That is more than our two-year budget, $52 billion,” said Senate Taxes Committee Chair Carla Nelson, R-Rochester. “So there’s just an incredible, unprecedented, impossible to even imagine amount of money that has been sent to this state.”
Nelson said the surplus that flowed from that money means the 2022 Legislature can both “take care of those COVID-related additional spending things and provide permanent ongoing tax relief.”
Ahna Minge, the state’s budget director, told the Finance Committee that the state used about a quarter of its direct funds for education-related programs. It spent money on health care, testing, vaccination programs, business relief and food programs.
“I don’t think any of this is particularly surprising given the areas that the state has needed to respond to the COVID-19 pandemic,” Minge said.
Federal money was even used to reimburse the state for more than half of the $755 million state lawmakers had set aside for public health in the spring of 2020 and for business grants that December.
The state relies on estimates from the Federal Funds Information for States for how much each state’s residents received directly. Of the $51 billion total, $13.75 billion went to residents via three rounds of stimulus checks. The value of unemployment compensation over and above the $2.7 billion paid out from the state’s trust fund was $9.8 billion. And state businesses received $16.7 billion in forgivable loans via two rounds of the paycheck protection program.
Written by Peter Callaghan. Walker Orenstein contributed to this story. This story was originally published on MinnPost on Feb. 18, 2022.
MinnPost is a nonprofit, nonpartisan media organization whose mission is to provide high-quality journalism for people who care about Minnesota.
Eden Prairie schools, city have received $24.5 million in COVID funds
Eden Prairie Schools and the City of Eden Prairie have received more than $24.5 million in CARES and American Rescue Plan since March 2020, and the city expects even more.
Schools: $16 million
Eden Prairie Schools (EPS) has spent about $7.5 million of the approximately $16 million in COVID-19 stimulus funding it has received since March 2020, according to Jason Mutzenberger, executive director of business services for the district.
The remaining funds must be spent by September 2024, he said.
Initially, the funds were used to purchase personal protective equipment, cleaning supplies and equipment, and increased mechanical unit filtration and airflow, Mutzenberger said.
Other funds were used to boost mental health supports for students, increase access to preschool and other youth enrichment programs, he said.
Some money was spent on reading supports for students, greater supports for students impacted by homelessness, more resources for ESL students, greater access to technology for all students and staff, and additional math, reading, and science resources for students struggling in those areas, Mutzenberger said.
At the same time, the pandemic created an increased need for mental health supports, social-emotional supports, and learning resources and recovery from distance learning, he said.
“We’ve seen greater needs in childcare for essential workers and food needs for families,” Mutzenberger said. “The school district has and continues to experience challenges in staffing and supply chain issues.”
Use of COVID-19 funds provided under the Coronavirus Aid, Relief and Economic Security (CARES) Act and the Coronavirus Relief Fund (CRF – which is part of the CARES Act) and the American Rescue Plan Act (ARPA) is restricted primarily to pandemic-related expenses.
Those funds can’t be used for normal operating expenses in the district’s general fund – 87% of which consists of employee salaries and benefits, Mutzenberger told the school board in March 2021.
“At this point we are not aware of any additional funds coming our way,” Mutzenberger told EPLN.
The district did experience some revenue loss thanks to the pandemic.
“I can say that generally speaking we experienced minimal loss of revenue in the general fund,” Mutzenberger said. “There was a little enrollment loss, gate ticket/athletic revenue loss, along with some other small revenue losses.”
But the biggest impact was in food service and community service programs.
“Both of those programs are fee-based, meaning we need participation in order to generate revenue,” he said. “As both of those programs were closed or minimized during the pandemic, they unfortunately incurred deep impacts to staffing and exhausted their fund balances. We’ve been rebuilding these programs this year and are seeing positive growth again.”
City of Eden Prairie: $8.5 million ($3.72 million more expected)
In 2020, the City of Eden Prairie received $4.78 million as part of the CARES Act, which primarily was used for public safety costs, according to the city’s Communications Manager Joyce Lorenz.
The city also used these funds to support the Eden Prairie Community Foundation ($27,799) and the Eden Prairie Chamber of Commerce ($59,850).
The CARES Act fund was designed to provide funding to specifically address unforeseen financial needs and risks created by the COVID-19 public health emergency, not including revenue loss.
In 2021, the city received $3,723,700 through ARPA and will receive an additional $3,723,700 in spring 2022.
Cities are permitted to use ARPA funds for revenue loss, in addition to expenses specific to the pandemic.
The city, in 2021, incurred a revenue loss of approximately $2 million in what it calls charges for services, or fees, mainly with Parks and Recreation Department programs and the Eden Prairie Community Center, due to program cancellations and closures of various facilities. The city is using the ARPA money to cover the revenue shortfall.
It has until 2025 to spend the remaining ARPA money and anticipates continuing to fill in the gaps of revenue losses, according to Lorenz.
Charges for services for the next couple of years are projected to be below pre-pandemic amounts. Community Center memberships are still steadily rebuilding, she said, as the city continues to navigate the ups and downs of the pandemic, but it may be a couple of years before the city’s revenues fully recover.
Jim Bayer and Mark Weber contributed to this story.
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