Local lawmakers deliberate over $2.2 billion COVID-19 funding

By Gabriel D. Lagarde

June 03, 2020 at 3:00 AM

As the Congressional battle over COVID-19 relief funds continues to simmer on Capitol Hill, similar arguments look to factor between Republicans in the Minnesota State Senate and their colleagues in the Minnesota House and executive branch.

One key issue of contention? Who will decide how the state allocates its slice of the $150 billion Coronavirus Relief Fund, and how that money should be distributed.

According to the Governor’s Office, Minnesota will receive $2.187 billion as its share of a $150 billion fund. Of that total, $1.2 billion goes directly to the state and $984 million will be distributed to local governments.

According to an analysis by the National Conference of State Legislatures, the money from the Coronavirus Relief Fund can cover expenses incurred due to the pandemic and the revenue declines that will result from the economic impacts. These expenses are not allowed to be included in each state’s most recently adopted budget, which — in the case of Minnesota — is the May 2019 two-year budget.

In addition to the money from the Coronavirus Relief Fund, money will flow directly to colleges, public school districts and transit agencies from different sources as appropriated in the federal law. Money will also be distributed to emergency management, food shelves, child welfare services, National Guard deployments and both state and local public health agencies.

Aside from state government, the two local entities eligible for direct aid from the federal government — which is not subject to state level determination like the Coronavirus Relief Fund — were Hennepin and Ramsey counties, which received $212 million and $96 million respectively from the federal government, as they contain the core of the Twin Cities metropolitan area. County officials for both Ramsey and Hennepin have argued they should receive some of the Coronavirus Relief Fund monies as well to combat the health-related and economic fallout from COVID-19.

As of now, much of that authority rests with Gov. Tim Walz in determining where those funds are allocated, while Republicans have argued the state Legislature should have a role in the decision-making process.

As for Senate Majority Leader Paul Gazelka, R-Nisswa, he said Ramsey and Hennepin counties should make do with what they already have, or the alternative would be to shortchange the other 85 counties, many of which are in dire financial straits evidenced in flagging tax revenue and laid-off workers.

Gazelka said the $2.2 billion should be distributed on a per capita basis that gives to each county as much as the fund can afford based on population.

“All that money should be dispersed based on a per capita basis. Ramsey and Hennepin counties already got their funding and the rest of the counties should get based on a per capita basis,” Gazelka said. “That is the struggle, but the Senate position is that all counties should be treated fairly.”

While not expressing as definitive a stance on how these allocations should be distributed, other Republicans in central Minnesota — which include state Sen. Carrie Ruud, R-Breezy Point, as well as state Reps. Josh Heintzeman, R-Nisswa, and Dale Lueck, R-Aitkin — agreed the state Legislature should enjoy an active role in the process.

Lueck warned that misplacement of these funds would be likely if the state opts to concentrate so much power and authority in Walz’s hands.

“That’s an example of a big picture item that needs to be dealt with,” Lueck said. “To simply drop that kind of money on the executive branch, with some general federal guidelines — that's not appropriate. It just sets up everything for a bad situation. The Legislature needs to be directly involved in where those funds go and what they're used for.”

In an email, Heintzeman seemed to point to ongoing friction between Republican lawmakers and the governor. Heintzeman has repeatedly declined to comment other than by email, citing a discomfort with face-to-face or phone interviews and expressed sensitivity with how prior statements were presented in the Dispatch.

“Once again, the legislature should be a partner, a co-equal branch, in the process of allocating the federal dollars coming into our state,” Heintzeman stated in his email response.

Likewise, Ruud advocated for stronger, more cooperative partnerships between the Walz administration and Republicans in the state Legislature — especially for the issue of federal COVID-19 funding, but also a litany of issues on the table.

“The Legislature should have a say in how it's spent, and I think that that's the important piece that we forget to talk about — the governor should not have full rein to spend $2 billion on anything he wants to spend it or wherever he wants to spend it,” Ruud said. “What is the right formula? I don’t know that, because we haven't had those conversations. All we're really looking for is input and cooperation and working with the Legislature on that issue — all issues really.”