The Federal Coronavirus Aid, Relief, and Economic Security Act (CARES) provides an estimated $2 trillion to battle the harmful effects of the COVID-19 pandemic. It is expected Minnesota will receive more than $2.187 billion in funds through the $150 billion Coronavirus Relief Fund — and millions more from a variety of other accounts. Of that total, $1.2 billion goes directly to the state, and $984 million will be distributed to local governments.
The money directed to the state can cover expenses incurred because of the pandemic, including revenue declines that will result from the economic impacts of being shut down. In addition to the Coronavirus Relief Fund, the money will be directly appropriated to most Minnesotans through stimulus checks, colleges, public schools, and several agencies. There are also specific actions in the bill funding emergency management, child welfare services, National Guard, food shelves, and public health agencies.
Most households with incomes under $150,000 ($75,000 for singles) will receive $1,200 per adult and $500 per child from the Department of Treasury. Payments will phase out for those with incomes between $150,000 and $198,000 for couples (the phase-out starts at $75,000 for singles). Couples whose incomes exceed $198,000 will not be eligible for payments. The funds are expected to arrive automatically via mail or direct deposit in the coming weeks and will go to those who filed a tax return for tax years 2018 or 2019, according to the U.S. Treasury. For more information about receiving your check, go to the IRS website irs.gov/coronavirus. Just a note of caution, the IRS and Treasury are going to develop online portals to deposit checks, please watch out for scam attempts from bad actors asking for your bank account information to send your stimulus checks to.
Workers receiving unemployment benefits will get the normal weekly benefit plus an additional $600 per week, until the end of July. Together, this is enough to replace 100% of lost wages for a large portion of workers, especially lower-income workers. The length of time workers can receive unemployment benefits is increased by an additional 13 weeks. Although the funds come from the federal government, they are passed on to Minnesota to administer. It’s important to note, the unemployment benefits may take some time to administer, but this additional funding will likely happen as the first component of the federal UI changes.
Unemployment insurance has been expanded to cover part-time workers, the self-employed, and workers who aren’t eligible for traditional unemployment insurance. Congress authorized a new Pandemic Unemployment Assistance (PUA) program that covers those who do not qualify for regular UI benefits. The program was authorized but must be created by the states (each state must build such a program). The program is based on one that Minnesota has run before, the Disaster Unemployment Assistance program, but we are still waiting for federal guidance on some of the nuance of the program including who will qualify for the benefits and how those benefits will be calculated. Benefits will be backdated to eligibility. This is likely to happen as the second component of the federal UI changes.
Help for small businesses
The federal stimulus package’s Paycheck Protection Program pays for up to two months of employee wages for small businesses that keep workers employed or rehire those who have been laid off. It also provides funding for rent, utilities, and similar expenses. These funds do not need to be paid back if employees are kept on the payroll or rehired. Under the stimulus package, the Small Business Administration can provide small businesses with up to $10,000 in grants (usually on the day of application) that don’t need to be repaid, plus provide additional access to loans for businesses in need of funding. Small businesses with existing SBA loans will receive up to six months of forgiveness of their current loans, including principal, interest, and fees. This forgiveness is also available for borrowers to take certain new SBA loans in the next six months. For businesses that don’t use the Paycheck Protection Program, the law provides employee retention tax credits to support a portion of an employer’s payroll expenses for certain workers. Small businesses can apply for loans here.
There will be additional federal funds to support Minnesota’s 17 community health centers deliver care at over 70 sites across the state. It also extends federal funding for Minnesota’s Certified Community Behavioral Health Centers (CCBHCs) and provides regulatory flexibility to expand access to telehealth services, protecting both patients and providers during this period of social distancing.
Minnesota will receive a total of $365 million for E-12 education. The Governor’s Emergency Education Relief fund receives $43.58 million. An additional $140 million will go to the Elementary and Secondary School Emergency Relief fund to be used for coronavirus-response activities, such as planning for and coordinating during long-term school closures, purchasing educational technology to support online learning for all students served by the local educational agency, and additional activities authorized by federal elementary and secondary education laws.
Help for Higher Education
The Higher Education Emergency Relief Fund will receive $181.52 million, of which at least 50% of the funds are targeted to provide emergency financial aid grants to students to cover eligible expenses related to the student’s cost of attendance such as food, housing, course materials, technology, health care, and childcare. Remaining institutional funds may be used to defray expenses for IHEs, such as lost revenue and technology costs associated with a transition to distance education.
Federally held student loan payments are suspended through September 30. No interest will accrue during this time. Borrowers on income-driven repayment plans or those working towards Public Service Loan Forgiveness will still be able to count the suspension time towards progress under those programs.
A few additional highlights of what’s included in the federal package include:
- Funding to pay for the deployment of the National Guard for the next six months to support state and local response efforts.
- Money for transit systems that would be distributed through existing formulas including the Urbanized Area Formula Grants, Formula Grants for Rural Areas, State of Good Repair Formula Grants and Growing and High-Density States Formula Grants using the fiscal year 2020 apportionment formulas.
- Money to ensure our elections are safe, secure, and accessible during the 2020 federal election cycle.
Minnesota should receive the funds within the next 30 days, which could help our state mitigate the expected budgetary deficit as state tax revenues decrease from the expected recession. These federal funds could help Minnesota keep up with expected additional responses Minnesota will face. Minnesota has allocated $550 million so far to respond to the COVID-19 needs since the pandemic began.