Feds, state begin assessing Minnesota flood damage

The flood waters pouring across 34 counties in Minnesota have washed away the antagonism Minnesota Gov. Tim Pawlenty typically shows toward the federal government.

In fact, not only will the feds likely pick up 75 percent of the flood-damage costs, the 25 percent paid by the financially strapped state also likely will come from re-directed federal funds.

How all of this will break down will become clearer in coming weeks. 

At a news conference this morning, Pawlenty and state legislative leaders announced that federal and state employees today have begun the process of assessing how much damage has been caused by the widespread floods caused by the heavy rains of last week.

Following those initial assessments, it will be decided whether the impacted counties will be declared disastor areas by the feds. It’s assumed that designation will come and with it, a flood of federal money in the form of grants and low-interest loans.

Additionally, Pawlenty and legislative leaders agreed that a special session will be needed to create legislation needed to send state money into area. That session, likely needing less than a day, will be held early next month.

Pawlenty lauded “the team spirit’’ shown by DFL and Republican legislative leaders in wanting to get aid to the flooded areas as quickly as possible.

But how does a state with a red-ink budget come up with emergency money?

Here’s where the feds come in. The state was scheduled to receive $235 million, paid on a monthly basis beginning in January and running through the end of the legislative year. That money was to be used for medical assistance.

The hope of the governor and the Legislature had been that those dollars would replace money currently being spent by the state for the medical assistance programs, thus freeing and equal amount of state money to be set aside as a reserve to deal with major cash-flow problems the state faces in future months.

Instead, it’s likely most of those funds will head to the flooded areas, to rebuild such public things as roads, sewers, bridges and schools. The aid will come both in the form of cash grants and bonding.

How much will that amount to?

Too soon to know, the governor said. But the state spent roughly $200 million in the so-called Rushford flood of 2007, $65 million of that in cash, the rest in bonding.
Overall, the state covers 25 per cent of the cost of rebuilding public infrastructure; the feds come up with the rest. A variety of other public programs — low-interest loans and grants — will help homeowners, most of whom do not have flood insurance, and small businesses recover. Separate government programs will come to the aid of farmers, though Pawlenty said he believes most farmers have crop insurance.

What was interesting politically in this is not once did the governor make negative comments about either federal or state spending.

The public’s role in all of this was understated by Pawlenty. The governor praised the “spirit of Minnesotans.’’

“People’s homes are their safe havens,’’ the governor said. “… This is incredibly traumatic. The good news is Minnesotans rally to support each other. These communities will be rebuilt.’’

Over and over, the governor praised the “spirit of Minnesotans’’ working together to rebuild. As sort of an afterthought, he added that government will do what it can to support those efforts.

The governor minimized the impact state emergency funding will have on the overall dreary Minnesota budget picture, saying “I don’t think it will materially affect’’ the cash-flow problem the state already is facing.

But House Speaker Margaret Anderson Kelliher and House Majority Leader Tony Sertich said those cash-flow problems aren’t marginal. There’s no question, they said, that the state’s financial problems have become more difficult because of the flooding. They also added that there’s no question the state must step in and help.

Senate Republican Minority Leader Dave Senjem said he was buoyed by the “bipartisan spirit’’ shown at today’s meeting with the governor. He noted that the publicly financed flood-control projects done in Rochester in the 1980s prevented this from being an  even greater disaster. Those projects, he said, have spared Rochester from “at least three or four floods.’’

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Comments (1)

  1. Submitted by Mohammed Ali Bin Shah on 09/28/2010 - 08:44 am.

    As long as State and Federal funds are used to pay for rebuilding state/federal infrastructure, All is well.

    Please do not give one dime of my tax dollars in “government charity” to people who did not protect their own assets by buying insurance. Their poor choices should not cost me a penny.

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