Through the American Rescue Plan, the federal government allocated $2.8 billion towards Minnesota in fiscal recovery funds, direct cash the state could use for its COVID-19 response. Add an additional $73 billion in CARES funds and that’s a healthy sum. After the most recent legislative session, Gov. Tim Walz was given permission to decide how a chunk of that money, $500 million, would be spent to address immediate needs during the pandemic.
Health equity programs Gov. Walz funded using $500 million in immediate COVID relief, by sector
Source: Minnesota Management and Budget
Much of the funding went towards organizations working on income inequality, housing crises, a lack of access to reliable transportation, poor access to education and food insecurity, all factors which heighten the pandemic’s impacts on people experiencing systemic disparities.
COVID testing and vaccination programs
The Minnesota Department of Health (MDH) received $40 million in January 2022 to support its community COVID testing throughout the state, which includes long-term care, group homes, residential facilities, homeless shelters and corrections, schools and child care facilities. So far, $25.33 million of that has been spent.
The request took place as the omicron variant hit Minnesota and MDH reported more than 46,000 positive COVID cases within a week. In the request, MDH said the funding would cover the costs of operating testing distribution sites, testing supplies, shipping and staffing costs.
Before that, in December, MDH received two separate rounds of $2.5 million to fund the state’s testing program, with an emphasis on providing more rapid over-the-counter tests, operating distribution sites, covering testing supplies, shipping and staffing expenses. Those funds have been used.
MDH also received $12.2 million to re-launch its vaccine incentive program, with hopes of controlling COVID cases as students returned to in-person school. So far, nearly half of the funds have been used, targeting eligible youth, ages 12-17, in hopes of offsetting the costs of lower-income families. MDH also created a drawing for youth who complete their vaccine series with rewards like scholarships; up to $100,000.
While MDH received funding from the American Rescues Plan, it also received more than $678 million in Epidemiology and Laboratory Capacity COVID-19 funding through the CDC and around $10 million in CDC supplement grants.
“That’s where a lot of our funding is coming from on an equity side. Those are pretty stable,” said Devin Henry, the deputy communications director for MDH.
The Minnesota Department of Education (MDE) received $75 million to fund summer programs to help kids who fell behind during the pandemic. That funding went towards mental health supports for schools and districts, providing summer preschool programs, expanding tutoring access and increasing adult basic education funding, among other things.
The Education Partnership Coalition (EPC), a statewide network of locally-controlled, public-private partnerships focused on eliminating Minnesota’s inequity gaps, received $4 million to distribute to various education partnerships. In February and March of 2022, the Northside Achievement Zone, Wilder Amherst Foundation, Austin Aspires Inc., Northfield Healthy Community, Red Wing Youth Outreach, Rochester Area Foundation, United Way of Central MN and Greater Twin Cities United Way were selected and contracted for the funds.
MDE received $1.5 million to support two early learning programs which support early language, communication and literacy skills. One program, Reach Out and Read, incorporates literacy support into child healthcare visits. The other program, ParentChild + is a home visiting program that brings trained early learning specialists into homes of underserved communities.
The Girl Scouts received $1 million to expand its ConnectZ program. According to the request, the program provides leadership programming and life coaching skills to 3,000 underserved and under-resourced girls from low-income communities in the Twin Cities and southern Minnesota.
DHS received $6 million to increase mental health staff at schools to treat more students and families, increase parent and teacher support and provide substance use education and support to students regardless of insurance status. The funds were contracted out in October 2021 and will be available until June 30, 2023, according to DHS.
Higher education aid
The Minnesota Office of Higher Education (OHE) received $35 million to fund a college financial aid program that offers grants to Minnesota residents without bachelor’s degrees who are pursuing a high-need career area and attending Minnesota State University, the University of Minnesota and starting in the fall, tribal colleges.
“The money comes to OHE, but then we have to provide it to the systems. So we provide the money to the University of Minnesota system at the Minnesota State system, and then they disperse it to their campuses and then that gets dispersed to the students,” said Keith Hovis, the director of communications for OHE.
So far, 1,317 people have received grants through the program, and OHE anticipates running it until the funds run out or 2024.
“Minnesota State really stepped up and wanted to find a way to provide some of those grants this spring,” said Hovis. “They were able to get that 1,300 out the door and provide that for students already.”
The Walz administration also gave OHE $3.4 million with the goal of recruiting and training 1,000 certified nursing assistants. The funding covered training, tuition, books, uniforms and certification exams for students at Minnesota state colleges for 1,300 people.
In the midst of the pandemic, Minnesota received more than $672 million to go towards housing support in federal dollars through federal CARES Act allocations, the COVID relief act, and American Rescue Plan.
Separate from that funding, as a part of Walz’s $500 million spending chunk, the Minnesota Housing Finance Agency (MHFA) received $7 million in October of 2021 to help staff and fund RentHelpMN, its COVID-19 rental assistance program.
The following month, MHFA received $20 million to provide emergency rental assistance for renters who have exhausted the 18 months of assistance allowed under federal law. The request stated that up to 3 million of those funds would be used for administrative costs to process applications and payments.
At the time, MHFA estimated that more than 7,000 households were at risk of exhausting their benefits by March 2022. As of March 31, the RentHelpMN program received more than 100,000 applications and has paid around $425 million in assistance.
Around 70 percent of its applicants make below their area median income – 30 percent below – and two-thirds of applicants who provided race/ethnicity identify as Black, households of color, or Indigenous households. The program closed to applications in January, but the $20 million has not been fully spent yet and will go towards the remaining requests, according to MHFA. Though the program ended, housing advocates are calling on the Legislature to relaunch the safety-net program.
The Minnesota Attorney General’s office received $3.6 million to cover estimated costs for pandemic responses. Although the funds haven’t been fully used, some have gone to support legal work protecting people who experienced COVID-related scams and vulnerable tenants during the pandemic.
The Department of Human Services (DHS) received $15 million to run programs and services that help community shelters prevent transmission of COVID-19. In the request, DHS cited that among people who contract COVID-19, those residing in shelters are four and a half times more likely to end up hospitalized and three times more likely to require intensive care.
Contracts for the funding are in process, and construction of additional homeless shelters will begin in May, according to DHS.
Prior to that, DHS received $10 million to create a homeless shelter emergency response team. People identifying as Black or Native American are overrepresented in Minnesota’s homeless population, according to a 2018 Wilder Amherst Foundation study.
The Minnesota Department of Veteran Affairs (MDVA) received $200,000 to set up programming and management services for the Operation OVER program, which connects former service members with homeless services. The funding specifically went towards finding veterans permanent housing with mental or chemical health support, financial or employment support and long-term health care services.
DHS received $14 million to support immediate household food needs and administrative costs of emergency food response organizations, like the Supplemental Nutrition Assistance (SNAP) program. Its request cited a 24 percent statewide increase in the number of people participating in that program between February 2020 and June 2021.
The funds have not been used yet, as DHS is in the process of creating contracts with food banks, Tribal nations, food shelves and on-site meal programs. Those organizations then will purchase, produce and process food, buy hygiene supplies and technology to support food distribution, and increase outreach to connect eligible people to food benefits.
The Minnesota Department of Agriculture (MDA) received $3 million to combat food insecurity. Funds will be sent to Second Harvest Heartland and The Food Group, which would then purchase food for distribution to different shelf partners across Minnesota. The funds have yet to be used, but MDA predicts distribution will begin in June.
A couple of weeks after that, MDA received another $3 million to fill the high demand for food support due to the public health and economic impacts of COVID-19. The request cited that an estimated five percent of Minnesota households are reporting food insufficiency.
According to the request, the funding would go towards preparing 1.5 million meals, targeted to populations such as the unhoused, adults 18-60 and individuals with disabilities.
“The strongest component is that we really want these meals to be incremental to meals that community-based organizations may already be serving. And then also that the meals that are being served are also appropriate for the communities that they’re serving,” said Ashley Bress, the grants supervisor for MDA. “We really want people to have access to meals that they’re accustomed to, and that fit their dietary needs and preferences.”
MDA expects community organizations to start serving these meals this summer, predicting that all the funds will be used in June 2023.
“I think everybody is well aware that time really is of the essence here and that as soon as we can get the meals out to folks, the better, but knowing that there’s also a process for getting those allocations made,” Bress said.
The Minnesota Department of Administration (ADM) received $3.2 million for workers’ compensation for people who contracted COVID-19 while working in occupations like licensed peace officers, firefighters, paramedics, emergency medical technicians, nurses, health care providers and workers, assistive employees in health care settings and corrections officers. Around $983,000 of the funds have been used, with another $2 million in pending reimbursement transactions through March of 2022.
Healthcare facility spending
DHS received $50 million to hire and retain vaccinated workers in skilled nursing facilities. In its request, DHS said staffing shortages, mainly due to vaccination requirements, impact the facilities’ ability to discharge patients into post-acute care, especially in rural areas.
So far, $49.9 million of those funds have been used. It will go through an audit which could lead to the recovery of some funds.
DHS also received $2.86 million to address the limited capacity in three children’s psychiatric residential treatment facilities by adding full-time staff who can transition children from emergency departments to appropriate levels of care. Around $4,000 has been spent. The remaining funding will go towards increasing staffing and support in those facilities.
To fill a staffing shortage in nursing facilities, MDH received $2.5 million. The increased staffing allowed nursing facilities to add beds for those who no longer needed hospital-level care and freed up hospital beds.
MDH received $1.3 million to support the crisis care coordination center, which oversees hospital bed availability. The funding would go toward future surge needs for hiring intensivists, people who help determine bed availability, MDH said.
The Minnesota Department of Human Rights (MDHR) received $500,000 to support its COVID response, specifically updating technological infrastructure and tracking intake calls, especially relating to bias, discrimination and hate.
Where was the rest of the money spent?
The remaining state fiscal recovery funds, around $2.3 million, were allocated for long-term pandemic recovery and revenue replacement.
So far, Minnesota’s state government has received only $1.4 billion from the American Rescue Plan. The second half is expected to come to Minnesota in May.
As for the remainder of the American Rescue Plan funding, Walz and legislative leaders agreed to set aside $1.15 billion to address long-term needs as part of the COVID-19 pandemic response.
These funds will be part of the supplemental budget process during the 2022 Legislative Session and are also eligible to replace lost revenue due to the pandemic.