As part of the Biden Administration’s American Rescue Plan, Minnesota is set to receive $2.8 billion in federal money. While staff were busy Monday going over the issued guidance for how it can be spent on pandemic recovery, lawmakers in St. Paul have a daunting week ahead.
Sorting out the 150-page report on top of the budget negotiations with a deadline in seven days is the task facing legislators. Gov. Tim Walz said Monday the additional $200 million than originally expected is welcome news, but the complexities of earmarking the money makes the timing challenging.
“It’s going to be hard with seven days,” he said. “We're xchanging offers at a faster pace right now at the level of setting those target numbers. I would hope, maybe, in the next day or so we get to that. I do think you need to keep deadlines because it goes on indefinitely if you don’t.”
Republicans have been pushing for a tax break for businesses who received PPP loans, as well as unemployment insurance tax conformity. In a statement, Republican Senate Majority Leader Paul Gazelka said “There are zero reasons, absolutely none, to ask for more money from Minnesotans.”
Walz says discussions are focused more on dollar amounts than policy at this point, but they’ll be guided by a review of the Treasury Department’s outline.
“I’m not going to negotiate with myself again,” Walz said. “We have made unemployment insurance a priority of the tax conformity. We’d like to see them do that. We have made clear that we think most of those PPP loans would be a part of that and that’s the proposal we put out there. The ones above $350,000 it gets pretty expensive. I think the question is if we’ve got industries that made massive amounts of money, amde massive CEO salary bumps on that, I think I would like to see us use that money for childcare development. At this point in time we’re still negotiating that.”
Citing the need for early learning to address opportunity gaps, wait lines for childcare spots and a lack of options in some parts of Greater Minnesota, Walz and DFL legislators want a higher reimbursement rate so more centers are incentivized to stay open. Lt. Governor Peggy Flanagan said the federal money is right there.
“If a rate increase doesn’t pass this session, as the governor mentioned, the state could face a penalty and reduction in federal funds for childcare,” Flanagan said. “We simply cannot afford that. It would mean that dollars from federal taxes, paid by Minnesotans, would be sent to other states.”
Working single mom and college student Shawnice Walls says not paying full-price for her 6- and 3-year-old to attend the Wilder Child Development Center in St. Paul is crucial to her elevating her life.
“If you don’t have any stable place to bring your kids to daycare you’re not going to be able to do your job well. You’re not going to be able to do your homework or go to class because you’re going to be worried, ‘Are my kids OK?’,” she said.
