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Minnesota lawmakers split over using state money to help Minneapolis recover from Floyd riots

Gov. Tim Walz wants to authorize $150 million in bonds to help redevelop parts of Minneapolis and St. Paul. A GOP proposal, meanwhile, would bar any state disaster aid from paying for repairs to public infrastructure damaged in the riots. 

Debris remains on the site after the building where Gandhi Mahal was located was destroyed, as owner Ruhel Islam awaits permits.
MinnPost photo by Henry Pan
A plan from Gov. Tim Walz would authorize $150 million in bonds to help redevelop parts of Minneapolis and St. Paul that were damaged in riots. Another plan from state Sen. Julie Rosen would exclude local governments from using state money dedicated for disaster aid to repair public infrastructure damaged in a riot.
Ever since people burned down buildings and looted stores in the aftermath of police killing George Floyd in Minneapolis last year, debates have raged over who should pay for the estimated $500 million in damage.

Do taxpayers across the state need to pitch in to help a community rebuild, or should city and county governments in the metro area alone shoulder the burden?

That question has been revived by two proposals at the Minnesota Legislature this week. One plan from Gov. Tim Walz would authorize $150 million in bonds to help redevelop parts of Minneapolis and St. Paul that were damaged in riots. But another, from Republican state Sen. Julie Rosen, would exclude local governments from using state money dedicated for disaster aid to repair public infrastructure damaged in a riot.

Both have been contentious, inflaming tensions over government response to the Floyd homicide and the political differences between Greater Minnesota and the metro area. 

“I’ve heard over and over again from Greater Minnesota, from my constituents, that ‘Please, do not pay for this out of our taxpayer dollars,’” said Rosen, who is from Fairmont, during a Senate hearing for her bill.

How disaster funding was reserved for Minneapolis and Hennepin County

When a disaster strikes, governments can apply for federal help for certain costs, such as damaged public infrastructure. 

In the wake of the riots, the Federal Emergency Management Agency (FEMA) conducted an assessment of damage in the Twin Cities metro area to see what costs might qualify for assistance.

Gov. Tim Walz
Christine T. Nguyen/MPR News/Pool
Gov. Tim Walz
Joe Kelly, Minnesota’s emergency management director, said the feds narrowed down eligible aid to damage tied to fires during the riots. Walz asked then-President Donald Trump to approve aid for more than $15 million in eligible damages, but the request and appeals were rejected.

Minnesota has its own disaster assistance fund for when federal help isn’t available. The Legislature periodically puts money in a reserve account that the governor can approve to help governments deal with natural catastrophes, such as tornadoes and blizzards, as well as fires, floods and explosions of any cause.

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The fund was created by lawmakers in 2014 so the Legislature wouldn’t have to convene a special session each time there was a disaster. Rosen said those special sessions would get bogged down by other political issues and stretch on too long. It has so far been used largely for disasters outside of the seven-county Twin Cities metro area.

State Sen. Julie Rosen
Walz approved roughly $12 million from Minnesota’s disaster account to help Hennepin County and Minneapolis reimburse about $15.6 million in costs. Barret Lane, director of the office of emergency management in Minneapolis, said reimbursable expenses included roughly $950,000 for debris removal, $101,000 in first responder costs that go beyond normal needs, and $13.1 million for damage to public buildings and equipment. (The bulk of the money is associated with the uninsured Third Precinct police building that was destroyed.)

Kelly said Hennepin County’s reimbursable costs were for insurance deductibles to public buildings like a library. The cash is currently in a second reserve account as the city and county work on meeting documentation requirements.

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The disaster money, however, is not intended for damage to private buildings. Walz in July said nearly 1,500 businesses in the Twin Cities were damaged by vandalism, fire or looting and estimated total damages at more than $500 million.

Democratic plans for recovery aid

Last year, Democrats in the state House approved a bill that had $167 million for aid to small businesses and $125 million for people and businesses specifically to help with uninsured property loss. The measure was not passed by the Republican-led Senate.

Walz on Tuesday proposed $150 million in bonds to help redevelop Twin Cities areas damaged during riots. His administration says it would help people hurt by systemic racism and poverty and keep businesses run by people of color and Indigenous people.

Allison Sharkey, executive director of the economic development nonprofit Lake Street Council, said individual donors, corporations and nonprofit foundations have all chipped in to help businesses in the area. One campaign led by the council drew about 80,000 donors. To date, they have distributed $5.5 million in emergency business support. On Thursday, the group will decide how to allocate up to $1.5 million in additional money for property owners who want to rebuild on destroyed property, or renters who lost their space and want to buy a building on Lake Street. 

The City of Minneapolis has also offered some financial help to businesses and has promised to help with rubble removal.

Sharkey said hundreds of businesses have made repairs, replaced equipment and are beginning to reopen. Some properties completely burned, typically with bigger corporate tenants, have begun construction on new buildings. But there are still smaller business owners, many of which are run by people of color and immigrants, that need help. Especially when insurance often covered only a “fraction of the cost” of damage, Sharkey said. She said Walz’s proposal was exciting, even though she said it would be challenging to get approval in the House and Senate.

“The scope of what’s needed is just really tremendous and really goes beyond what a local government alone can handle, particularly during COVID,” Sharkey said. “There’s a huge need for state and federal governments to play a role.”

Walz’s budget plan also includes $35 million to help local police pay for help from other law enforcement agencies, which Minneapolis had to do last year, and roughly $4.2 million for the state patrol, Department of Natural Resources police and other Minnesota agencies respond to anticipated civil unrest during and after former officer Derek Chauvin’s trial in March. Chauvin, who knelt on Floyd’s neck as Floyd called for help, is facing second-degree murder and manslaughter charges.

GOP tries to exclude ‘civil unrest’ from disaster funds

In a press conference Tuesday after Walz released his budget plan, Senate Majority Leader Paul Gazelka, R-East Gull Lake, said when Minneapolis cuts police officers and then asks for state help “it creates some real dynamics for us to work through.” (The city council proposed cutting officers last year, but ultimately voted to reduce only the force’s budget.)

Gazelka said the Legislature needs to discuss how to respond to “potential future riots” during and after Chauvin’s trial. “Many of us don’t think that the entire state should be responsible for some of the costs Minneapolis is asking for,” Gazelka said.

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Rosen’s bill would bar local governments from receiving money from the state’s disaster aid fund after “civil unrest.” The Legislature could still approve money to help with public infrastructure costs after civil unrest, but the governor couldn’t draw down the money without new legislative approval like he can from the current account.

In a hearing before the Senate’s Judiciary and Public Safety Finance and Policy Committee on Monday Rosen said the disaster reserve was originally intended for natural catastrophes, and that a faster and better response to problems in Minneapolis by Mayor Jacob Frey and Walz could have prevented fires and damage. Lawmakers should object to the “governor using the (disaster) account to basically usurp our authority as a Legislature and have the right to debate the appropriateness of this expense,” Rosen said.

State Sen. Bill Ingebrigtsen
State Sen. Bill Ingebrigtsen
At the same hearing, Sen. Bill Ingebrigtsen, a Republican from Alexandria, said Minneapolis and Hennepin County could raise taxes on their own to pay for recovery efforts. He said he understands disaster aid for some human-made destruction like bombs that is unpreventable or unpredictable. “Civil unrest that consistently goes on for days is way different than somebody who sets a bomb in an area where obviously nobody knows about it,” Ingebrigtsen said.

Many Democrats reacted with frustration to the GOP proposal. Sen. Ron Latz, a St. Louis Park DFLer, noted people from around the state were arrested in connection to the riots, not just locals. A man from Staples pleaded guilty in November to helping light the Third Precinct building on fire, for instance.

Several DFLers also said the Twin Cities helps out when there are disasters in Greater Minnesota that could potentially have been avoided, such as flooding along the Red River in northwestern Minnesota. “I would make the case of those who don’t care what happens to their neighbors, that’s a dangerous road to go down,” Walz said Tuesday in a call with reporters from Greater Minnesota. “You’re going to start saying then don’t build by a river, you knew it was going to flood? We always try to protect Fargo-Moorhead or whatever it would be. Those are things that we do together.”

State Rep. Cedric Frazier
State Rep. Cedric Frazier
State Rep. Cedric Frazier, a DFLer from New Hope, said during a House hearing on Wednesday that state policy and lack of investment in people of color contributed to long-standing problems that gave rise to the Floyd homicide and the subsequent protests and riots. Not helping those neighborhoods would only make issues worse, he said. “I couldn’t fathom the thought of not supplying disaster relief to Greater Minnesota when a tornado comes down, a major snowstorm has an impact on those communities,” Frazier said. “I don’t think that we’d be having the conversation if this was a situation that happened in Greater Minnesota in some of those communities.”

Dewey Johnson, president of the Association of Minnesota Emergency Managers, told lawmakers at Rosen’s hearing that smaller communities in northern Minnesota are dealing with demonstrations against Enbridge’s Line 3 pipeline and hope state disaster money would be available if protests escalate.

So far, Walz’s administration opposes Rosen’s bill. Rosen said there “should be a good discussion” about Walz’s bonding proposal. On her own plan, Rosen said: “I want to be sure that the taxpayers of Minnesota are not paying for something that perhaps by the actions of our executive branch and the mayor of Minneapolis perhaps were exacerbated.”