A balanced approach to solving a mess (debt and surplus) - Strib editorial
One of the many lingering effects of the pandemic is the damage done to Minnesota's once-brimming unemployment trust fund. The near complete shutdown of much of the state's economy during the depths of the pandemic sent unemployment levels soaring, exhausting the fund. The state then started borrowing from the federal government, as many states did, to continue unemployment benefits. Now the $1 billion bill has come due.
Dozens of states in similar straits relied on federal pandemic relief to restore their unemployment funds, a use which was specifically allowed by the federal government. Minnesota was among a handful that did not, hoping instead that the feds might eventually forgive the outstanding debt. But House Majority Leader Ryan Winkler told an editorial writer that the state's recent news of a $7.7 billion projected surplus makes that option extremely unlikely.
Unless the Legislature takes action, the burden for replenishing the barren trust fund will fall on businesses still coping with labor issues, supply chain problems, nervous customers and the highest inflation rate in 40 years. Notices of the increases needed to rebuild the fund are already going out to businesses across the state, payable in the spring.
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There's another debt the state owes — as we noted in a previous editorial — to send $250 million in "hero bonuses" to front-line COVID-19 workers. Legislators have fought for months over who should get the money and how much. A major sticking point has been GOP insistence on giving a "meaningful" amount to a smaller pool of eligible workers, while Democrats have pushed for a larger pool that would include grocery, retail, child care, meat-packing and other workers who risked daily exposure to perform work that could not be done remotely. Winkler pointed out to an editorial writer that adding the higher amount Republicans want to the larger number Democrats prefer nets out to about $1 billion.
This has the potential to be a serious win-win. Minnesota is awash in surplus funds. Sending substantial bonuses (about $1,500) to about 650,000 of the hardest-working Minnesotans who took some of the biggest risks is an appropriate use of that money. So too is giving businesses what would amount to $1 billion of tax relief.
Winkler said that while the trust fund is paid into by employers, "we recognize that some businesses, small businesses in particular, are struggling and should have some relief. But, if you are among those corporations who had a better year, I'm not super sympathetic. Not every business needs this level of relief."
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It's clear that there is bipartisan support for relief to help both businesses and workers. The state has the means and the knowledge that most of the money would quickly flow back into the economy. All that remains now is the political will
https://www.startribune.com/a-balanced-approach-to-solving-a-mess/600128690/
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I fully agree and already expressed it to my rep and senator. Both, thankfully, are Democrats.
