Federal aid for states is needed — even in Minnesota

Minnesota took many of the right steps to weather the crisis it now faces.

The public health system, while still lacking, was more robust than in many states. Fiscally, the state filled its budget reserves when times were good and had ample unemployment insurance reserves, along with record-low unemployment that helped ease the demand on services.

Then the pandemic hit, triggering a public health and fiscal crisis and further exposing deep racial inequalities that have added civil unrest to the mix.

Minnesota now has a $2.4 billion deficit projected for the current budget period and a staggering $4.7 billion in the next two-year budget cycle, not counting inflation. It has paid out record amounts of unemployment to offset the worst of the COVID-triggered recession. It enters fall with an infection rate slightly higher than the U.S. as a whole.

All the precautions Minnesota took against a rainy day were not enough. The state needs the kind of help that only the federal government can provide in these times, primarily because states can't run a deficit and the U.S. government can.

Congressional gridlock on this issue is unconscionable and must end, before states are forced to make deep cuts to the very services people are depending on in this crisis.

Gov. Tim Walz, in talking to an editorial writer, said, "Minnesota will have to make some tough fiscal choices" to tame the deficit, but he noted that even if he eliminated every state employee, it would barely make a dent.

"One thing we hope policymakers learn from that time is to focus on what is needed for people to get through these tough times and get the economy back on track," she said. Aid to states that support such services is an integral part of both economic recovery and aiding people through the pandemic.

If Minnesota is forced to cut what it sends to service providers and vendors, Madden said, "that's all a drag on the economy." Conversely, she noted, "aid to the states has a multiplier, stimulative effect."

The House passed its federal aid "Heroes Act" package for states months ago, while Senate Majority Leader Mitch McConnell at one point briefly suggested that states perhaps should just go bankrupt.

Madden said time is running out for states to get the aid they need to promote public health, prepare for an expected uptick in transmission rates and keep teachers and other public workers on the job. Part of that is reinstating expanded federal unemployment insurance and keeping the larger federal match on Medicaid that has helped so many.