Minnesota got $73 billion in pandemic aid. Where did it go? – Twin Cities

Minnesota got nearly $73 billion in federal aid during the coronavirus pandemic — roughly $12,800 for each of the state’s more than 5.7 million residents.

It’s easily the largest influx of federal cash in state history. For many who were unable to work during long stretches of the pandemic, it was a lifeline.

The vast majority of the money that came to Minnesota, more than $52 billion, was economic assistance in the form of stimulus payments, enhanced unemployment benefits or aid to businesses.

In fact, only a small portion of the federal aid, which came in five waves over the course of more than a year, was meant to directly combat the coronavirus. Minnesota got about $4 billion in federal aid for health and human services programs.

Instead, much of the federal money was aimed at addressing the fallout from the steps governments took to slow the spread of SARS-CoV-2, the coronavirus that causes COVID-19.

In Minnesota, for instance:

  • $3.4 billion for schools to operate online and then reopen safely.
  • $2.7 billion to combat food insecurity.
  • $1 billion for missed mortgage and rent payments.
  • $7.2 billion in “flexible funds” state officials could dedicate toward pandemic-related priorities.

All told, the U.S. Congress, President Donald Trump and President Joe Biden approved more than $5.7 trillion to battle the coronavirus pandemic, and much of it went to the states. Minnesota still has more than $1 billion left in its coffers that lawmakers are expected to decide how to spend this legislative session.

“This is absolutely unprecedented,” said Mark Haveman, executive director of the Minnesota Center for Fiscal Excellence, a financial watchdog. “Nothing like this has happened in state history.”

FEDERAL CASH

Minnesota is no stranger to federal cash. Each year, billions in federal funds pass through the state to help pay for programs like Medicaid, welfare and supplemental nutrition assistance.

Before the pandemic, Minnesota received about $22 billion in federal money during the 2018-19 biennium, according to Ahna Minge, state budget director.

For the 2020-21 budget cycle, that rose to about $30 billion and is projected to increase even more by the end of the current biennium. To put that in context, the two-year budget lawmakers approved last June was about $52 billion in state spending.

Minnesota officials typically have limited control over how federal money is spent and that’s no different with coronavirus aid. Of the billions that came to the state, only about $7.2 billion were “flexible funds” that state and local leaders had some control over.

Here’s a rough breakdown of how that $7.2 billion was divided:

  • $3.3 billion went to local governments such as cities and counties.
  • $1.2 billion was designated as state revenue replacement.
  • $1 billion was part of the 2021 deal to finalize the current two-year state budget.
  • $1.7 billion was designated for the state’s immediate and ongoing COVID-19 response, including testing and vaccine distribution, health care stabilization, child care aid, relief for businesses and other needs.

Not all of these flexible funds have been spent. State leaders have roughly $1 billion left in federal aid that state lawmakers are expected to allocate during the current legislative session that ends in May.

MINNESOTA’S OVERSIGHT

The flood of federal cash that came to Minnesota and other states has many wondering what is the best way to oversee how the money is spent and monitor for fraud.

State officials have set up several websites where residents can explore how money from the American Rescue Plan and the state’s Coronavirus Relief Fund is being spent.

Minge, the state budget director, says because Minnesota routinely receives funding from the federal government, there is already a lot of state oversight in place. Local governments and school districts have to stipulate how they will spend federal dollars and state agencies are responsible for monitoring grants to nongovernmental organizations.

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