Minnesota Governor Delivers COVID-19 Recovery Budget

Bipartisan budget includes Governor’s priorities to invest in small businesses and drive economic recovery, ensure students catch up on learning to succeed for years to come, and support essential workers and working families

ST. PAUL, MN (STL.News) Governor Tim Walz has signed the final bills in Minnesota’s COVID-19 Recovery Budget—Minnesota’s state budget for the next biennium.  As Minnesota emerges from the COVID-19 pandemic, the bipartisan budget includes Governor Walz’s priorities to invest in small businesses and drive economic recovery, ensure students catch up on learning to succeed for years to come, and support essential workers and working families.

Highlights of Minnesota’s COVID-19 Recovery Budget include:

  • A historic investment in education—$1.2 billion over four years, the largest formula increase in 15 years;
  • $70 million in COVID-19 relief for small businesses across the state that have borne the brunt of this pandemic to protect their communities and save lives;
  • $80 million in statewide grants to address the greatest economic development and redevelopment needs;
  • $597 million to support child care businesses and increase access to affordable, quality child care; and
  • $250 million in direct financial support to Minnesota’s essential workers on the frontlines of the COVID-19 pandemic.

“Minnesotans got through this pandemic the way we get through all hardships in life—with grit and resilience.  We banded together and looked out for one another.  Together, we made it through this pandemic, we got the vaccine, and now, with Minnesota’s COVID-19 Recovery Budget, we are on our way back, stronger than ever,” said Governor Walz.  “Thank you, Minnesota.”

“The investments in Minnesota’s COVID-19 Recovery Budget are historic,” said Lieutenant Governor Peggy Flanagan.  “We are taking care of our students, our small businesses, and our essential workers who kept our economy going through the most difficult period in our lifetime. The accomplishments in this budget reflect the best of Minnesota and create a strong foundation that we must continue to build upon.”

Minnesota’s COVID-19 Recovery Budget invests in small businesses and drives our economic recovery, supports essential workers and working families, and ensures students catch up on learning and have the opportunity to succeed.

ENSURING OUR STUDENTS CATCH UP ON LEARNING TO SUCCEED FOR YEARS TO COME

Every child deserves a high-quality education, no matter their race or zip code.  As schools reopen to in-person learning, Governor Walz is focused on making sure every student has the opportunity to succeed.  Minnesota’s COVID-19 Recovery Budget includes $1.2 billion for education over four years, including the largest formula increase in 15 years.  The budget also includes funding to make sure that the youngest Minnesotans do not lose access to high-quality, free prekindergarten by making sure that 4,000 seats—that would have otherwise been eliminated—continue.

Additionally, Governor Walz developed a plan to fund enhanced summer learning programs in Minnesota to help students recover from the learning challenges of the COVID-19 pandemic.  The Governor allocated $75 million of the state’s flexible American Rescue Plan funds to provide academic enrichment and mental health support this summer and beyond for Minnesota’s students, families, educators, communities, and schools.

Governor Walz also knows that the mental and social-emotional well-being of students is critical to their success both in and out of the classroom.  That is why his budget includes funding to make evidenced-based suicide prevention training available statewide to K-12 educators and school administrators, and he has dedicated federal funds for school-linked mental health services for students and school staff.  Governor Walz’s budget also includes $2.5 million to support mental health awareness and services at colleges and universities across Minnesota.

The budget also includes over $35 million for efforts to put more teachers of color and American Indian teachers in classrooms, and to keep them there.  When students see themselves reflected in their teachers, it can have a profound impact.  This historic investment to help diversify the teaching workforce is a promising strategy to reduce the achievement gap and increase educational outcomes for students of color and American Indian students.

INVESTING IN SMALL BUSINESSES AND DRIVING ECONOMIC RECOVERY

Minnesota’s small businesses and workers bore a large burden of the COVID-19 pandemic in order to protect their entire community amid restrictions that saved lives.  By supporting small businesses and driving economic recovery, Governor Walz’s budget ensures that communities across Minnesota aren’t just surviving, they are thriving.

The Governor’s budget invests $80 million through statewide grants to address the greatest economic development and redevelopment needs that have developed over the past year.  Funds will be available as grants and loan guarantees and awards will prioritize projects that will have the greatest regional economic impact including increasing the local tax base and leveraging non-state funds.

Additionally, by investing $70 million for businesses impacted by COVID-19, with $10 million set aside for minority-owned businesses, Governor Walz’s budget ensures that communities across Minnesota aren’t just surviving, they are thriving.

SUPPORTING ESSENTIAL WORKERS AND WORKING FAMILIES

Many working families lost everything due to the COVID-19 pandemic.  Minnesotans know that we all do better when we all do better—and a lot of our neighbors need help.  Governor Walz’s budget ensures that those who have been hit hardest by the COVID-19 pandemic, and those who kept working to keep our economy going every day, have the resources they need to survive.

Minnesota’s COVID-19 Recovery Budget includes $250 million in direct financial support to Minnesota’s essential workers on the front lines of the COVID-19 pandemic, including long-term care workers.  A nine-member working group will make recommendations about who is eligible for this support by September 6, 2021.

Minnesota’s COVID-19 Recovery Budget also invests $597 million to support child care providers and increase access to child care across the state.  The Governor’s budget updates the maximum child care assistance rates for child care providers, which increases access to affordable, quality child care and reduces out-of-pocket costs for families.  Additionally, the budget includes over $304 million for direct payments to child care providers to help stabilize their businesses and $22.5 million for revitalization grants for child care facilities.  $6 million in the budget will be used for technical assistance to help providers reopen or start up, as well as business training to help providers retool after the pandemic.  Innovation grants totaling $200,000 will test strategies to help family child care providers collectively achieve economies of scale.  The Governor’s budget also includes $6 million for training, higher education, and retention grants to help individuals obtain the professional development they need to enter and stay in the child care field.  The budget also includes $8 million in child care investments through the Department of Employment and Economic Development Local Community Child Care Grant Program, including $5 million for the existing program and an additional $3 million for the Minnesota Investment Foundations to use for its regional work in developing additional child care options.

Families living in poverty have experienced the severest impacts of the COVID-19 pandemic.  They need resources to address the significant challenges the coronavirus has put before them.  Minnesota’s COVID-19 Recovery Budget includes a one-time Minnesota Family Investment Program (MFIP) payment of up to $435 to support about 32,000 families, including 64,000 children.  The Governor’s budget also includes a permanent MFIP cost of living adjustment, ensuring families’ benefits will continue to support them even as costs rise.

BUILDING A BRIGHTER FUTURE

Minnesota’s COVID-19 Recovery Budget also includes strong investments to build a brighter future for all Minnesotans.

Minnesota’s more than 312,000 Veterans are supported through the Governor’s budget.  An operating adjustment of $8.2 million will ensure that Minnesota continues to serve those who have served our country.  Also, $1.65 million will support a state-wide initiative for Veteran Suicide Prevention, and $6.3 million will support Veteran homelessness efforts.  Finally, the Governor’s budget includes the Veterans Restorative Justice Act—landmark legislation that provides a specialized sentencing structure for Veterans who are found to have committed criminal offenses as a result of a service-related condition.

Minnesota’s COVID-19 Recovery Budget also includes public safety measures such as restrictions on the use of no-knock warrants, increasing mental health response in crisis calls, reforming civil asset forfeiture by law enforcement, and provides body cameras for law enforcement at the Department of Public Safety and the Department of Natural Resources.  The bill establishes a Missing and Murdered Indigenous Relatives Office and a Youth Justice Office as well as overhauls how Minnesota enforces safety standards and reforms use of force guidelines in Minnesota jails and prisons.

Minnesota’s COVID-19 Recovery Budget also makes significant new investments in connecting people to the outdoors, mitigating climate change, proactively managing natural resources, and addressing agency operations.  It provides an extra $2 million for state parks and recreation areas, which will ensure the Department of Natural Resources can continue to provide high quality outdoor experiences Minnesotans across the state.

Additionally, due to climate change, Minnesota now has the second most extreme weather events in the country—second only to California. Extreme weather events have increased insurance premiums by 366% since 1998.  Extreme weather events also mean farmers and manufacturers cannot get their goods to market.  To help communities prepare for extreme weather, Governor Walz’s budget includes $1.98 million to better manage local stormwater, which will prevent roads from being washed out and sewers from backing up into homes and businesses.