This article was written by Minnesota Budget Project’s Laura Mortenson, communications director, and originally published in the Summer 2022 special legislative issue of Nonprofit News. Read the full issue.
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Nonprofits create strong, thriving communities across the state. Through the work nonprofits do, we understand the importance of funding the things our people and communities need, like affordable housing to feel safe, child care so we can work, full pantries to feed us, clean lakes and prairies, and all the other ways we ensure our collective well-being. And we expect policymakers to make funding those things a priority as well.
In the 2022 legislative session, state policymakers had urgent needs to address. After two years of a pandemic and economic disruption, too many of our neighbors continue to struggle to put food on the table and a roof over their heads.
With a historic projected $9.3 billion surplus in FY 2022- 23 as well as federal ARP dollars, we had the resources to address the challenges that Minnesotans face and build a stronger, more equitable recovery.
The House and Senate took very different approaches to the surplus. The House proposed using the majority of the surplus for investments in things like education, child care, housing, and paid family leave. Their tax bill included funding for local services and expanding tax credits for low- and middle-income Minnesotans focused on bringing down the cost of raising a family and keeping a home.
In contrast, the Senate prioritized large, permanent, and unfair tax cuts that gave the biggest benefits to high-income Minnesotans. Devoting so much of the surplus to tax cuts meant they proposed much smaller investments in public services.
Policymakers were unable to bridge the divide between these approaches, and ultimately only agreed to allocate about one-quarter of the surplus.
Game-changing proposals to expand tax refunds for renters, make child care more affordable, and address barriers to affordable health care were left as unfinished business. The bills that passed largely were not strongly focused on Minnesotans hardest hit by the pandemic or targeted approaches to build a more equitable future.
By far the bill with the greatest fiscal impact that passed this session was the Unemployment Insurance (UI) Trust Fund/ frontline workers bill. This bill allocated $2.7 billion to the state’s UI Trust Fund, which had been drawn down to pay jobless benefits during the pandemic. Rather than refill that fund gradually over time through additional UI taxes and assessments on employers, this action provides an untargeted benefit to all employers that pay into the Trust Fund, regardless of whether they are small and struggling or large and highly profitable.
More positively, the bill also allocates $500 million for onetime “hero pay” benefits to approximately 667,000 frontline workers who stayed on the job during the pandemic. Many of these front-line workers are lower-income and workers of color, who were harder hit by the pandemic and had less resources to get through it.
The second largest bill that passed this session costs $717 million over 3 years for reinsurance, which provides payments to health insurance companies with the goal of holding down premiums in the individual insurance market. Unfortunately, the Legislature did not pass other proposals focused on Minnesotans who currently fall through the gaps and struggle to afford the care they need.
The Legislature passed a few other supplemental budget bills into law. One bright spot was a last-minute compromise bill that allocated $93 million over three years to start to address the crisis in Minnesota’s behavioral health system.
Minnesotans needed bold policy action, and nonprofits raised their voices. Many of you signed letters, sent emails, or talked directly to your legislators, highlighting the needs and issues important to your missions and communities. Policymakers received nearly 700 emails in support of the Nonprofit Relief Fund through an MCN action alertWe have more work ahead of us. Much is at stake in the upcoming 2022 statewide elections. In 2023, policymakers will set the full state budget for the next two years, and will likely have a projected surplus to work with.
Once again, we will have critical decisions as well as resources to meet the challenges before us. Nonprofit leaders, organizers, board members, volunteers, and supporters should continue to use the tools and avenues available to ensure policymakers hear our solutions to build the kind of future we want to see.