Ewald at the Capitol | September 24

Minnesota in Federal Debt

Minnesota owes the federal government about $7 billion for supplementing our unemployment trust fund for unemployment benefits in 2020. We are one of ten states with an outstanding balance. Four states repaid their loans in full earlier this month to avoid a longer-term repayment plan because of the 2.27 percent interest rate on the loan.

Without a change in state or federal law, employers could see an increase in unemployment insurance taxes of up to 14 percent to repay the federal government. During legislative session, some legislators discussed using $600 million of Minnesota’s American Rescue Plan (ARP) funding for repayment, which is something that other states are doing. Sen. Eric Pratt, chair of the Senate Jobs and Economic Growth Committee, would prefer to use all the state’s remaining ARP funding to repay the debt.

“To take a significant chunk out of the trust fund deficit would be good for the Minnesota economy. It would help employers feel good about going out and hiring people and it would help them with their cash flow,” says Pratt.

Childcare Stabilization Grants

Today, applications close for a $300 million grant program for childcare providers. Each full-time early educator in the state is eligible to benefit from the program, and at least 70 percent of awarded grants must be used for compensation.

The childcare industry has suffered greatly during the pandemic. Childcare in Minnesota was never subject to governor-mandated closures and has remained open since the beginning of the pandemic. The funds could help retain Minnesota’s childcare workforce and keep Minnesota moving forward.
These grants will act as a short-term supplement in an attempt to keep businesses afloat. In the case of providers who have employees, the grants could be the difference between maintaining staff and losing them to higher-paying jobs that are also less risky for direct COVID-19 exposure.

As stated by Minnesota Department of Human Services Commissioner Jodi Harpstead, Minnesota’s economy depends on the availability of childcare.

Retirements

Legislative retirement announcements continue to slowly trickle in. Most recently, Rep. Ami Wazlawik (DFL-White Bear Township) announced that she will not seek re-election at the end of her current term. Rep. Wazlawik won by only 100 votes in the last election and would likely experience another hotly contested race in 2022.

So far, four legislators have announced retirement. Retirements will continue to be announced throughout session. You can follow legislative retirement announcements in real time on the Minnesota Reference Library’s website.