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Minnesota Legislature Reaches Deal Replenishing Jobless Claims Fund And Sending $500M To Frontline Workers

ST. PAUL, Minn. (WCCO) — Legislative leaders on Thursday announced a long-awaited deal on frontline worker bonus checks and replenishing the state's jobless claims fund to spare businesses tax increases, ending a political stalemate that lasted for months.

The agreement doubles the $250 million previously set aside for frontline workers to $500 million and it fully pays back debts owed to the federal government and refills the unemployment trust fund to pre-pandemic levels, which has a price tag of $2.7 billion.

The deal also includes $190 million for Gov. Tim Walz's ongoing response to COVID-19.

"We came to a resolution that we feel is really quite good for the people of Minnesota," Miller said.

An estimated 667,000 workers in Minnesota would qualify for the bonuses and there would be an application process through the Department of Labor and Industry.

If every single eligible worker applied, the checks would be $750, but that amount could increase depending on the interest.

The Minnesota Senate is poised to vote on legislation Thursday night and it could go to Walz's desk for signature as early as Friday. DFL House Speaker Melissa Hortman, GOP Senate Majority Leader Jeremy Miller and Walz spent months in meetings trying to find compromise.

"Our highest priority was ensuring that workers who were on the front lines of COVID receive the bonuses they were promised nearly a year ago," Hortman said.

Democrats previously passed $1 billion for frontline workers but ultimately compromised with Republicans to get the checks moving since they were promised last summer.

Hortman didn't hide her disappointment.

"Absolutely I'm frustrated. I don't know how Senate Republicans can look at our frontline workers and say they don't deserve a $1,500 bonus," Hortman said, mentioning the size of the check if the plan was $1 billion.

Those who work in health care, long-term care, child care, school workers, food service workers, janitorial staff, and many more would qualify.

"Our goal is to get those checks out and in the pockets of frontline workers as soon as possible," Miller said.

But that's likely to take several months. A spokesperson at the Department of Labor and Industry said the agency would start to build an online application as quickly as possible once legislation is approved, but it doesn't have a specific timeline yet of when Minnesotans can apply.

Too late for payroll taxes to get adjusted, but businesses will see credit or refund

As for businesses, this deal is still too close April 30 -- when taxes are due -- to reverse course.

Any adjustments to tax assessments will happen after that deadline, a spokeswoman from the Minnesota Department of Employment and Economic Development said by email.

Businesses will see a credit on their account for future quarterly tax payments on unemployment insurance or they can apply for a refund. Refunds are more complex, the agency said, and DEED will provide instructions on how businesses can make that request.

Without action replenishing the unemployment trust fund, businesses were facing an average tax increase of 30%, according to data from DEED.

Minnesota owes the federal government more than $1.2 billion it borrowed during the pandemic to keep the fund afloat when it faced a surge of people who were out of work due to COVID-19. The $2.7 billion lawmakers agreed on would pay back the debt and refill the account and spare businesses a tax increase.

The Minnesota Chamber of Commerce welcomed action by lawmakers but said it should have happened sooner.

"Lawmakers finally using available funds to replenish pandemic-induced unemployment debt is welcome but long-overdue news," Doug Loon, the chamber's president and CEO, wrote in a statement. "Economic recovery cannot wait for partisan politics, and employers face real challenges now, including historic inflation and worker shortages."

Steve Grove, the agency's commissioner, hoped lawmakers would pass a proposal by March 15 but they didn't move on it.

Who will qualify for bonus checks?

Here is a list of all the qualifying sectors for worker bonuses, according to previous House language that is expected to make it in the final bill. Eligible workers are also subject to income limitations:

  • long-term care and home care
  • health care
  • emergency responders
  • public health, social service, and regulatory service
  • courts and corrections
  • child care
  • schools, including charter schools, state schools, and higher education
  • food service, including production, processing, preparation, sale, and delivery
  • retail, including sales, fulfillment, distribution, and delivery
  • temporary shelters and hotels
  • building services, including maintenance, janitorial, and security
  • public transit
  • ground and air transportation services
  • manufacturing
  • vocational rehabilitation
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