In advance of Friday’s special session, Gov. Mark Dayton and legislative leaders put their signatures to a set of written terms and a spreadsheet for disaster relief for northern Minnesota.
Following a couple of weeks of scrutinizing the proposed financing, lawmakers agreed to $167 million for flood and wind damage in northern Minnesota, a figure that falls $27 million short of Dayton’s initial proposal. Sen. Roger Reinert, DFL-Duluth, said he’s hoping that lawmakers will offset some of the reduction with interagency transfers.
“All of the departments have been scrubbing past disaster dollars and other programs they already have without having to borrow or dip into the reserves,” Reinert said.
The bill was destined to pass on Friday in special session after press time.
As part of the agreement, the governor and GOP leaders agreed that any alterations to the bill in the special session would kill the deal.
After the floods in June, President Barack Obama declared a disaster emergency. That allows the Federal Emergency Management Agency (FEMA) to pick up 75 percent of the cost of repairing public infrastructure, which has been estimated at $108 million. The state’s match for FEMA assistance is roughly $26 million and comes from the state Department of Public Safety’s portion of the bill.
FEMA, however, denied the state’s request to declare the damaged area a disaster for purposes of relief funding to individuals and businesses. So a portion of the $167 million state tab is aimed at individuals and businesses in the absence of federal support.
Individual, business assistance
Much of the aid to individuals will come from the Minnesota Housing Finance Agency. The $12.7 million proposed by Dayton and accepted by the Legislature will go principally toward low-interest loans to help people rebuild their homes. There will also be homelessness prevention money to provide temporary housing until people’s homes are rebuilt or they find permanent replacement housing.
The Minnesota Investment Fund in the state Department of Employment and Economic Development (DEED), which is slated to receive $15 million (down from $20 million in the initial proposal) will provide some of the assistance to help businesses rebuild.
Despite Reinert’s faith that much of the gap between the $167 million bill and the $195 million Dayton proposal will be made up by agencies poring through their budgets to find extra dollars, it’s unclear how much can be made up internally. A spokesman for DEED said the agency doesn’t have any money to make up the $5 million reduction to Minnesota Investment Fund’s proposal.
In other cases, agencies wrung out savings. Kent Lokkesmoe, capital investment director for the state Department of Natural Resources, said bids to fix damage on the Willard Munger State Trail came in less than the initially estimated $8 million, which was one reason they were able to lower their spending request.
Republican lawmakers were surprised at the price tag that Dayton’s administration presented to them. Key legislators who oversee fiscal matters, like House Ways and Means Chair Mary Liz Holberg, R-Lakeville, met with agency officials to determine the validity and timeliness of the damage estimates reflected in the bill.
The process irked Dayton, a DFLer who accused Republicans of not working in concert with the administration when a working group of stakeholders formed in July.
“If these issues that have been raised are appropriate issues, then they should have been raised shortly after that time,” Dayton said. “And we would have had time to resolve all this and not go through the political theatrics of the last week.”
$45 million from reserve
Funding sources will include $26.4 million that’s currently sitting on the state’s bottom line. The bill will also take $45 million from the budget reserve, $10 million less than proposed in the administration’s initial bill. But the bill offers $10 million more than originally proposed in bonding money from previous disaster appropriations that remain unspent at the Minnesota Department of Transportation (MnDOT).
With regard to the use of the reserve, the agreement addresses concerns that the bill would result in less money in the near future for buying back the school aid shift that was part of lawmakers’ 2011 budget agreement.
Dayton and the leaders agreed on a one-time exception to the state law that dictates any general fund surpluses must be placed in the budget reserve, instead stipulating that future surpluses up to the $45 million currently being spent go first toward shift repayment.
Earlier this summer, lawmakers floated the possibility that the session could include relief money for Sartell, where a Memorial Day explosion damaged the Verso paper company plant and killed one worker. But The St. Cloud Times has reported that area lawmakers aren’t likely to raise the Verso issue in the special session because the company subsequently closed the plant, and the workers’ benefits have been determined.
The only legislation other than the disaster-relief bill that will be allowed is a technical corrections bill related to it. The technical bill is a vehicle to deal with any needed changes that come to light in the run-up to the special session. House Transportation Committee Chair Michael Beard, R-Shakopee, said legislators and MnDOT officials are probably going to need to make some sort of fix to address Highland Drive in Duluth, which was originally believed to be eligible for 80 percent reimbursement from the Federal Highway Administration. As it turns out, local units of government are on the hook for the full cost for road, which is considered a “collector” street rather than a major thoroughfare. That will change the amount of bonding money needed for local roads and bridges.