Minnesota’s policymakers respond to natural disasters in special session

On Friday, August 24, the Minnesota Legislature passed and Governor Mark Dayton signed legislation to respond to the needs of Minnesota communities after recent floods in northeast Minnesota and storms in the western and south central parts of the state.

One provision that caught my attention involved how a future surplus would be allocated. That issue comes up because the bill includes a $45 million transfer from the state’s budget reserves.

Regular readers of Minnesota Budget Bites have heard us say that future state surplus dollars are used first to fill the budget reserves to their prescribed level, then to reverse the school funding shifts. The disaster relief bill states that for the upcoming November 2012 forecast, any positive balance will go toward reversing the school funding shift, instead of refilling the budget reserves.

The disaster relief legislation includes:

$79 million for transportation reconstruction and repairs;
$26 million to match federal FEMA assistance, debris removal and other long-term recovery needs in the flood areas and $6 million for state and local assistance in the windstorm disaster area;
$19 million to the Department of Natural Resources for facility and natural resource repairs and flood mitigation;
$15 million for employment and economic development business loans;
$13 million to the Minnesota Housing Finance Agency, primarily for loans of up to $30,000 to homeowners who sustained damage in the floods;
$13 million to the Board of Water and Soil Resources, largely for erosion and water quality projects;
$6 million for grants to local governments to address damage to public facilities and infrastructure; and
Smaller funding amounts for addressing damage to historical structures, agricultural assistance, assistance to school districts, public health, aid to cities that lose more than five percent of their tax base as a result of the 2012 floods, and reforestation.

Funding sources are:

$75 million from the general fund, including $45 million from the state’s budget reserves;
$57 million in general fund and state transportation fund bonds;
$35 million in trunk highway bonds;
$14 million from trunk highway fund; and
$13 million in transfers and reductions, including the cancellation of unspent funding from disaster relief legislation passed in 2007 and 2010.

More information is available: