Politics and Government

Tentative deal at Capitol on hero pay, unemployment fund

Melissa Hortman and Jeremy Miller
House Speaker Melissa Hortman, DFL-Brooklyn Park and Senate Majority Leader Jeremy Miller, R-Winona after a negotiating session with Gov. Tim Walz at the Capitol on March 8, 2022.
Brian Bakst | MPR News

Updated 1:55 p.m.

A long-stalled deal to repair the state’s unemployment insurance fund and deliver hero checks to some frontline pandemic workers has been struck by top leaders at the Minnesota Capitol. 

The agreement would clear the way for bonuses to as many as 667,000 workers that have been held up since House and Senate negotiators deadlocked on a plan last summer.

Refilling the unemployment insurance trust fund that was depleted during the early months of the COVID-19 pandemic and paying back a debt to the federal government would take businesses off the hook of having to pay higher taxes to resolve the problem.

House Speaker Melissa Hortman, DFL-Brooklyn Park, offered a brief sketch of the agreement during a MinnPost-sponsored forum Thursday morning.

“The tentative agreement is $500 million for frontline workers, $2.7 billion for unemployment insurance and allowing the governor to have $190 million to spend on COVID-related management costs,” she said

Each worker eligible for the bonuses would get a payment averaging $750, Hortman said.

House Majority Leader Ryan Winkler, DFL-Golden Valley, said in an interview that checks will be distributed per house bill qualification list. He says they’ll range from $500 to $1,000 depending on how many eligible people apply. State agencies have been working on the processing plan.

“It is a recognition that some people's service was extraordinary,” Winkler said. “It is akin to recognizing soldiers coming home from a war. These people were on the front lines. They deserve a hero's welcome and that hero's welcome should include these checks.”

Senate Majority Leader Jeremy Miller, R-Winona, confirmed at the MinnPost event that the deal was struck with Gov. Tim Walz on Wednesday. 

“Been working very hard on it, and we’re happy we’ve come to a compromise agreement that’s good for the people of Minnesota,” Miller said.

Sen. Karin Housley, R-Stillwater, was Winkler’s counterpart on a task force last year that was trying to fashion a bonus system. That group had $250 million to split up and agreement proved elusive.

“We heard so many testifiers come before us from long term caregivers or nursing homes or assisted living or nurses, the food people in our hospitals and in our long-term care facilities,” Housley said. “We heard from MnDOT drivers and school bus drivers. We heard from so many people that that wanted in.”

Now, she said, most of those critical workers will be.

“This is a really big ‘thank you’ for all of those Minnesotans,” Housley said.

Gov. Tim Walz said the agreement shows a divided Legislature can come together to get things done for the state.

“I am proud of this bipartisan agreement to provide hazard pay to frontline workers and relief for small businesses owners, both of whom sacrificed a great deal during the pandemic to keep their communities safe and our economy strong,” Walz said in a statement.

The Legislature faces an April 30 deadline to pass an unemployment fix because that’s when businesses pay their first unemployment tax installments. 

“We’re very relieved it got done. But it basically gets business to even. It is not a tax cut; it is preventing a tax increase,” said Laura Bordelon, senior vice president for advocacy at the Minnesota Chamber of Commerce.

It’ll take two or three months for employers who already sent in first-quarter payments to see that extra money reimbursed.

“This is an unprecedented task for our department,” said Minnesota Department of Employment and Economic Development Commissioner Steve Grove, who advises businesses to pay what they were assessed now and expect they’ll be made whole.

“We are prepared to do it. And we know how urgent it is for small businesses,” Grove said of returning money to businesses that have already paid the higher rate. “This is money they could be spending on a whole host of other things, whether it's increased pay, whether it's employee benefits, whether it's capital investment. These are real dollars.”

DEED, which administers the program, has seen fewer payments than usual come in by this point. That suggests businesses were waiting on clarity from lawmakers ahead of the deadline. 

Grove said the unemployment fund fix and frontline worker deal provide a one-two lift for Minnesota’s economy.

“There are countless workers who suffered and sacrificed throughout the pandemic that deserve some dollars,” he said. “And I'll tell you from the economic standpoint, this is money that will go into their pockets, and then they will spend in our economy and it will continue to empower our recovery.”