Posted on by John Edwards

Minneapolis Has 81 Cases of Covid-19; City Budget Shortfall Projected at $100 to $200 Million

Mayor Frey announced Friday that Minneapolis has 81 confirmed cases of Covid-19. When compared to total confirmed infections in Hennepin County (235 at the time the Mayor spoke Friday morning), the city’s rate of positive test results is proportional to the city’s share of the county population.

On March 23, I asked the Minnesota Department of Health to release numbers for Minneapolis and St. Paul. A spokesperson said they don’t have the staff time to do this (though easy enough to provide it to the Mayor of Minneapolis on request) and that releasing city data is not relevant to the risk it poses, because the virus is everywhere.

The Mayor announced a proposal for $5 million in city funding to fill in the gaps not covered by state and federal assistance. $3 million would go to rental housing assistance targeted at low income households; and $2 million in forgivable small business loans targeted at areas of concentrated poverty, in amounts of $5,000 or $10,000. An existing small business loan program at the city will be shifted from a 2% interest rate to 0%.

Council Members Cam Gordon and Jeremy Schroeder objected to the geographic limitation on eligibility for the forgivable loans, saying there are lots of deserving businesses outside the borders who could go under.

Council Member Lisa Goodman cautioned, as she did last week, that the city council is approaching the point where they have to choose between cutting staff or spending money. If there’s only $2 million to spend and $10,000 each, then only 200 businesses get a loan. “The need is so much greater than what we have.”

Council President Lisa Bender said, “We know it’s not enough.” She says cities on their own can’t possibly fill in the gaps of all the debt that’s owed by residents. It will require federal and state action. She hopes the next round from the state includes rental assistance.

Council Member Steve Fletcher suggested supporting people with money not tied to housing so they have choices about how to meet their most urgent needs.

Council Member Jeremiah Ellison said it’s time to get creative — the money for assistance will run out. He spoke of an effort involving St. Paul and suburban communities to request a rent and mortgage freeze enacted at the state level. He wants banks and landlords take on some of the burden in a crisis that’s squeezing everyone.

Council Member Phillipe Cunningham said the geographic targeting “is what an equity analysis looks like.” Redlining is still a real issue when it comes to small business loans. Small business ownership is critical to building wealth for families of color. Areas like his ward in North Minneapolis are excluded from access to business capital. Businesses run by people color tend to hire people of color. If these businesses fall apart, that deepens an unemployment crisis for people of color.

Mayor Frey concluded by saying the city is in a “dire financial situation” with an expected revenue shortfall of $100-200 million (double the shortfall projection of $45 to 120 million announced by budget director Micah Intermill on March 25). This means a hiring freeze at the city and exploring cost cutting options for 2020 and 2021.