MN Senate passes $2.7 billion bill to refill unemployment fund

The Minnesota Capitol is blanketed with a fresh coating of snow
A fast-tracked bill to prevent business tax increases by refilling the state’s COVID-19-drained unemployment insurance trust fund cleared the Senate Monday.
Andrew Krueger | MPR News file

The Minnesota Senate passed a bill Monday that refills Minnesota's depleted unemployment insurance trust fund with more than $1 billion and pays back more than $1 billion the state owes to the federal government for unemployment benefits.

The Republican majority in the Senate put the bill on a fast track because if the state doesn’t step in to refill the trust fund that was emptied by layoffs during the early days of the COVID-19 pandemic, taxes on business will have to go up to make up the shortfall. 

"The deficit was not caused by employers, and every dollar that was paid out of the unemployment system went to Minnesota workers who lost their job at no fault of their own,” said Sen. Eric Pratt, of Prior Lake.

The bill has bipartisan support, and Gov. Tim Walz has included $2.7 billion in his supplemental budget to pay for the effort.

The vote in the Senate was 55-11, but not before some Democrats argued that majority Republicans should also follow through on promises to pay bonuses to those who worked on the front lines during the pandemic.

The Legislature agreed to $250 million in bonuses last year, but the payments got hung up when a bipartisan commission was unable to reach agreement on how many workers should get the bonus payments and how much each payment should total. 

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Democrats have proposed upping the amount for bonuses to $1 billion so that more workers would qualify.  

''Our small businesses and our frontline workers kept our state going even when it meant their own health — even when it meant that their own safety was at stake," Minority Leader Melisa López Franzen, DFL-Edina, said. 

An attempt to link worker bonuses to the unemployment fund repayment failed in the Senate. 

In the House, majority Democrats say they also want the two issues to move together. They have not yet scheduled a vote.