Flood relief dilemma: Cash or credit?

Gov. Pawlenty
Gov. Tim Pawlenty has appropriated $32 million in state aid to assist with the flood damage in southeastern Minnesota.
MPR Photo/Tom Scheck

Gov. Pawlenty says the $32 million will help fix up homes and apartments, businesses and any infrastructure that was damaged by the flooding. Pawlenty says the state funding will help fill any gaps in the assistance already made available by the federal government.

"This is simply a step that we believe will be helpful in providing additional relief to the region."

Sen. Larry Pogemiller
DFL Senate Majority Leader Larry Pogemiller says he won't support a borrowing plan for flood relief since the state has money available in the general fund.
MPR Photo/Tom Scheck

About half of the $32 million comes from the Minnesota Housing Finance Agency. Five other state agencies will also kick in to provide relief.

Even with the extra money, Pawlenty said a special session is necessary for flood relief. But he has several demands before he calls one.

He wants the session to focus only on flood relief, and last only one day. The governor said he isn't willing to call a special session without a pre-agreement because too many other unrelated issues could come up. The governor is the only one who can call a special session but without prior agreement the Legislature determines when it will end. Pawlenty said the people of southeastern Minnesota deserve quick action.

"They need to see their state leaders and their legislators work together to solve their problems cooperatively, positively, constructively, efficiently and if we don't have some sort of parameters around this session," Pawlenty said. "I think there would be a fair likelihood that it will go off in a bad direction."

Pawlenty says he's close to calling a session, but wants to know how much money will be spent on the flood-relief package. He also wants an agreement to loosen state regulations so more damaged businesses can get assistance. And he wants a bonding bill so the state can borrow to rebuild any infrastructure that was damaged by the flood and to help rebuild the I-35W bridge.

That final demand is unacceptable to DFL Senate Majority Leader Larry Pogemiller, who says there's money available without borrowing it.

"What we heard from southern Minnesota legislators is that they need money on the ground now," Pogemiller said. "The way to do that is with cash, not to bond. You don't need to take out your credit card when you have cash."

Pogemiller and DFL House Speaker Margaret Kelliher have been urging Pawlenty to call an immediate special session to deal with the flood. They dropped their demands to consider a comprehensive transportation package and a tax bill that includes money for local governments so the session would focus only on flood relief.

"This is not a game," said Pogemiller. "This affects people's lives. It is time to act."

The ongoing political stalemate in St. Paul is causing even more frustration in the flooded areas. Lee Humble, the president of the Rushford Area Chamber of Commerce, says more than half of the 95 businesses in his organization suffered significant losses due to the flooding.

On MPR's Midday program on Friday, Humble singled out Gov. Pawlenty for not following through on pledges of help.

"This has been several weeks now. We're in our 19th day of recovery," Humble said. "These promises are sounding like hollow rhetoric. No state aid has been coming during this period."

Initial federal estimates say the flood caused $67 million in damage. Pawlenty said the number could be more than $100 million.

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