State officials reveal how much total COVID relief money Minnesota — and Minnesotans — got from the feds: $73 billion

It turns out, $73 billion has a way of changing the way you look at things.

State Sen. Michelle Benson

During a hearing on Thursday on federal COVID relief funds received by the state, Sen. Michelle Benson noticed a difference in the slides presented by Minnesota Management and Budget. Rather than the last three digits being left off to shorten the numbers, the last six digits were removed in order to simplify the explanation of how money flowed to Minnesota in COVID relief.

“The amount of money has gotten so big, we’re used to seeing in the upper corner the notation that the numbers are in thousands,” the Ham Lake Republican said. “On this slide, the notations are in millions. This is how big these numbers have gotten.”

The slide included one big number in particular, showing how much total federal money — in both direct grants to state and local governments and in grants to individuals — Minnesota benefited from in less than two years: $72.7 billion.

In addition to some smaller allotments from Congress, the money primarily came from three big federal laws: the CARES Act of March 2020; the Coronavirus Response and Relief Act of December 2020; and the American Rescue Plan Act of March 2021. The total value of those three acts was $5.3 trillion.

Source: Federal Funds Information for States (FFIS), as of Feb. 1, 2022

Federal Funding for COVID Response ($ millions)

The state was given $11.5 billion, with nearly $900 million for housing aide; $720 million in child care assistance; and $1.7 billion in health and human services enhancements. Of that money, $3.86 billion were “flexible funds,” and could be spent as the state wished as long as it was related to responding to the public health, economic and social impacts of the pandemic.

Minnesota Management and Budget

$11.5B in State-Administered COVID Response Funds ($ thousands)

In addition, local governments were given $3.3 billion, the health care system received $3.3 billion, and transportation systems — including airports and transit agencies — received $1.3 billion.

The biggest amount went not to the state but directly to residents in the form of extra unemployment compensation, stimulus checks and business grants and loans. That amount totaled $51 billion. All of that money is the best explanation for why the state economy, and state tax collections, not only didn’t fall as much as feared but actually grew during the pandemic.

Federal Funds Information for States

Rather than facing a once-predicted deficit, the state has a record-high budget surplus of $7.75 billion, plus more than $1 billion in money still unspent from ARPA.

State Sen. Julie Rosen

“Staggering. Staggering,” said Senate Finance Committee Chair Julie Rosen, R-Fairmont. “It really hits you when you see it on paper. It makes my knees crumble.”

“That is more than our two-year budget, $52 billion,” said Senate Taxes Committee Chair Carla Nelson, R-Rochester. “So there’s just an incredible, unprecedented, impossible to even imagine amount of money that has been sent to this state.”

Nelson said the surplus that flowed from that money means the 2022 Legislature can both “take care of those COVID-related additional spending things and provide permanent ongoing tax relief.”

Ahna Minge, the state’s budget director, told the Finance Committee that the state used about a quarter of its direct funds for education-related programs. It spent money on health care, testing, vaccination programs, business relief and food programs.

“I don’t think any of this is particularly surprising given the areas that the state has needed to respond to the COVID-19 pandemic,” Minge said.

State Sen. Carla Nelson

Federal money was even used to reimburse the state for more than half of the $755 million state lawmakers had set aside for public health in the spring of 2020 and for business grants that December.

The state relies on estimates from the Federal Funds Information for States for how much each state’s residents received directly. Of the $51 billion total, $13.75 billion went to residents via three rounds of stimulus checks. The value of unemployment compensation over and above the $2.7 billion paid out from the state’s trust fund was $9.8 billion. And state businesses received $16.7 billion in forgivable loans via two rounds of the paycheck protection program.

Walker Orenstein contributed to this story.