Notes from the Capitol – Special session edition

The first of what could be several special legislative sessions was held last week and into the weekend. Unfortunately, there was little agreement reached between the Republican-controlled Senate, the DFL-controlled House, and Governor Walz on most of the big-ticket items. As a result, it is likely that another special session will be called soon, possibly even within the next couple of weeks.

Accomplishments: Small business relief, child care assistance

Despite the incomplete finish to the special session, the Legislature was able to accomplish a few things.

Most notably, the Legislature passed — and Gov. Walz signed — a bill that created a small business relief grant program. As we have mentioned before, the program provides $60.3 million in grants to small businesses impacted by the COVID-19 pandemic. Half of the money will go to businesses in Greater Minnesota.

You can learn more about the grant program at https://mn.gov/deed/business/financing-business/deed-programs/relief/. DEED will also be holding several informational webinars about the program. You can see the list of webinars and how to join here (to the “webinars” tab). We encourage you to share this information with businesses in your area. Applications for the grant program will be accepted through July 2. It is expected that there will be more requests for funding than available funds, so it is likely that a lottery will be used to allocate the funds.

Passed in the final hours of the special session was an increase in funding for the state’s Child Care Assistance Program (CCAP), which currently helps cover child care costs for more than 30,000 low-income children across the state. Before this bill, Minnesota faced losing to up $5.5 million in federal funding for children because our CCAP reimbursement rates were below the federal requirement of 25% of a recent market analysis. Minnesota’s CCAP rates are currently 16.3% for in-home providers and 23% for centers.

The new investment, $85 million in total, will come from two federal sources. Most of the money, $65 million, will come from unspent funds in the state’s federal block grant for child care programs that was previously inaccessible because Minnesota’s reimbursement rates were below the federally required 25%. The remaining amount, $20 million, will come from the state’s CARES Act fund for aid to the child care industry. This MinnPost article does a good job describing the agreement.

What remains? 

The major lingering issues can be divided into three buckets:

  • Items not resolved from the regular session (bonding bill)
  • Issues related to COVID-19 (including the distribution of federal coronavirus relief funds to local governments)
  • Police and criminal justice reforms

Capital Investment (Bonding Bill) – Legislative leaders have stated that there is agreement on the size of the bill at $1.35 billion. The Senate introduced a new bill and held one hearing on it during the special session, but it did not reflect the supposed $1.35 billion agreement. The House did not release a bill or hold any Capital Investment Committee hearings during the special session. At this point, it appears that any negotiations on the bonding bill will take place behind closed doors. The most likely scenario is that the bill will be unveiled if and when there is an agreement that can pass in both the House and Senate.

CARES Act Funding – The state has received approximately $1.8 billion in federal coronavirus relief funds (aka the “CARES Act”), of which the federal government recommends 45% be distributed to local governments. At one point during the special session, the leaders of all four caucuses reached an agreement on a formula to distribute $841 million to cities, counties and townships. The Senate passed a bill that reflected this agreement. However, the House chose to send the bill to the Ways and Means Committee, where additional budget items were added to it. Republicans argued that these additional items went against the original agreement.

Since the House and Senate were unable to come to a final agreement on the CARES Act distribution, the decision will now likely be up to Governor Walz. He has the authority to allocate the dollars through the Legislative Advisory Commission. At this point, the Governor’s plans for the money remain unclear.

Police Reforms – The death of George Floyd on Memorial Day caused a renewed interest in police reforms, an issue that was previously discussed as a major priority for any special session plans. As the special session dragged into Friday and Saturday morning, Republicans and Democrats each offered various police reform proposals, but they were unable to come an agreement before the Senate opted to adjourn early Saturday morning. This issue will likely remain a major sticking point heading into the next special session and upcoming November elections.

What does it mean for GMNP priorities?

It is important to continue to press your legislators and Governor Walz to pass a bonding bill as soon as possible. Due to the pandemic and subsequent economic downturn, a bonding bill is needed more than ever to help create jobs and advance critical infrastructure projects. The GMNP’s top priorities for the bonding bill include funding for child care facilities, the Greater Minnesota Business Development Public Infrastructure Grant Program, and roads and bridges. In addition, there are numerous projects for colleges and universities and individual cities in Greater Minnesota. It is vital that the Legislature come together to pass a bonding bill right away!

If you  have any questions, please contact GMNP Executive Director Dan Dorman at dan@gmnp.org.