Minnesota's expiring COVID-19 money a 'looming problem'

Minnesota has $65 million left in its coronavirus response fund and four days to spend it.

The Legislature created the $200 million COVID-19 Minnesota Fund in March and set a May 11 deadline to use up the money. Budget officials are now seeking an extension, and want to add another $200 million or $300 million to continue the pandemic response.

The fund's expiration date is a "looming problem" and the remaining millions will not all be spent by then, Minnesota Management and Budget Commissioner Myron Frans warned. That's not because of a lack of demand for the aid.

It can take several days for spending requests to come together, said Frans, who is seeking the additional money and an extension of the fund until June 30, 2021.

Any dollars left in the pot that have not been approved Monday by a legislative oversight commission will return to Minnesota's general fund.

A continuation of the COVID-19 assistance fund is possible, but it is a "tight timeline" to get that done by Monday, said House Ways and Means Chairman Lyndon Carlson, DFL-Crystal, who added a bill extending the fund to his committee's Friday agenda.

"If we didn't get it done by Monday, there would be a window there where they wouldn't be able to make any purchases from the fund," he said.

Carlson said he never supported the "artificial deadline" of May 11. That was part of the deal made with Republicans, he said, as legislators quickly drew up an agreement to create the $200 million fund as the coronavirus started to hit the state in March.

Rep. Pat Garofalo, R-Farmington, said the deadline is "like having a 30-day evaluation at a new job."

"This way the executive branch doesn't have a blank check," he said.

The state is getting 10 to 20 times more requests for aid than what they have available, said Garofalo, who is on the commission that oversees the spending. He supports extending the use of the fund and adding money to it. But with the state facing a possible $2.4 billion budget deficit, he said Walz's administration needs to make it "crystal clear" where the additional dollars would come from.

So far much of the cash has gone to critical care equipment and machines, such as gloves, masks and ventilators. It also has been used for COVID-19 testing contracts with Mayo Clinic and the University of Minnesota. More than $10 million was recently needed to dispose of dead animals that couldn't be used for food due to processing plant shutdowns.

Lawmakers said a lapse in the fund could hinder the state's response to whatever challenge emerges next.

"We want to make sure that they have the ability to spend dollars quickly," said House Speaker Melissa Hortman, DFL-Brooklyn Park. "We do know that the [personal protective equipment] market is a little bit like the Wild Wild West right now, and that having the ability to move quickly on an opportunity can be the difference between getting the PPE and not getting the PPE."

The COVID-19 Minnesota Fund is not the only source of cash for emergency demands. While Gov. Tim Walz's administration could use federal relief money for some needs, Hortman said the state fund allows Minnesota officials to act faster and leverage different sources of money.

The legislative commission that oversees the state fund has just 24 hours to sign off on a proposal to use some of the money, but the approval process to spend federal funding can take up to 10 days. And for certain expenses — like the disposal of animal carcasses — Minnesota might only be able to qualify for reimbursement from the Federal Emergency Management Agency if it uses its own state dollars, Hortman said.

Jessie Van Berkel • 651-925-5044