Minnesota cities, townships, and counties are facing a tough balancing act.
Day in and day out, the pandemic has forced community leaders to make hundreds of hard choices to keep budgets balanced while still providing the services necessary to keep our communities running.
As state auditor, I oversee over $40 billion in local government spending, so I have witnessed the strain the COVID-19 pandemic put on local governments. That strain affects all of us; we rely on our local governments to run our schools and our libraries, to keep us safe and healthy, and so much more.
Fortunately, help is here Minnesota. President Joe Biden’s American Rescue Plan is set to deliver $2 billion in economic relief to local governments in every corner of our great state.
A need for ongoing stimulus
When our office crunched the numbers for our 2021 State of Main Street analysis, one key finding was that local governments have a strong need for ongoing stimulus. The services our towns and cities provide to Minnesotans are primarily financed by property taxes, and there is often a delay in how economic disruption affects those taxes. This means it’s likely that the effects of COVID-19 will be felt by local governments long after other recovery efforts from the pandemic are over.
The American Rescue Plan will ensure cities, townships, and counties have the resources to thrive, even during economic aftershocks caused by the pandemic.
To make matters better — and what a great feeling it is to finally be able to write that — the American Rescue Plan includes a key component that local governments have been begging for for a while now: increased flexibility.
The economic aid packages passed during the previous administration came with strings attached: They often required local governments to use the money specifically on COVID19-related expenses. That may sound like a good idea, but local governments needed and still need more flexibility. Furloughed first-responders can’t be hired back with resources earmarked for PPE. Budget shortfalls created by the pandemic can’t be filled with resources that can only be spent fighting COVID-19.
Local problems, local solutions
President Biden listened to the needs of mayors, city councils, and county commissioners. The American Rescue Plan gives local governments the flexibility to spend the relief funds in the best way possible for their communities. Although there are limitations and parameters on what the funds can be used for, the American Rescue Plan recognizes the pandemic’s far-reaching impact on community health. Local governments can use the ARP funds on services ranging from supporting local businesses to investing in health care to keeping communities safe.
The Biden administration isn’t trying to use a 1,000-mile-long screwdriver to tinker with how communities across Minnesota respond to and recover from the COVID-19 pandemic. They understand that local problems require local solutions.
On top of the $2 billion in relief for Minnesota’s local governments, the American Rescue Plan is delivering another $1.4 billion to classrooms across our state to ensure our youngest Minnesotans are set up to succeed.
The investments that Biden’s American Rescue Plan is making in Minnesota will help our state emerge from this pandemic stronger than ever. I’m tremendously grateful to the president and Democrats in Congress who saw the need for relief and acted to put money in pockets, shots in arms, and resources in the hands of the local governments that do so much to keep Minnesota the greatest state in the nation.
Julie Blaha is Minnesota’s 19th state auditor. The Office of the State Auditor is the constitutional office that oversees nearly $40 billion in local government finances for Minnesota taxpayers. It helps to ensure financial integrity and accountability in local government financial activities.
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