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State-by-State Analysis Shows Minnesota Doesn’t Need Federal Bailout

May 20, 2020 by AFP

Grassroots group calls on senators to reject $3 trillion spending package

St. Paul, MN – Americans for Prosperity-Minnesota (AFP-MN) released a report detailing the nearly $2 trillion in federal assistance already available to state and local governments, including more than $1.1 trillion that has been provided in the wake of the outbreak of COVID-19.

The analysis, conducted by AFP Policy Manager Matthew Dickerson and AFP Senior Fellow Alison Winters, also calculates the flexible federal assistance available to each state. The report suggests that this unprecedented amount of federal funding combined with responsible decisions at the state and local level should allow state and local governments to maintain necessary services without expediting a massive bailout bill from Congress.

Click Here to Read: Federal Budget Assistance for State and Local Governments

AFP-MN State Director Jason Flohrs issued the following statement on the report’s findings:

“With our budget reserves and prior federal aid, a massive federal bailout is unnecessary and would only fuel the reckless spending and misguided fiscal policies that characterize other states’ poorly run finances. Forcing Minnesotans to pay for the mistakes of other states’ politicians is wrong.

Lawmakers should instead focus on how we can safely reopen the economy and empower businesses to innovate and adapt to public safety guidelines so we can come out of this stronger than before. Our lawmakers also need to prioritize spending and focus on what is most necessary. Senators Klobuchar and Smith need to reject any calls for federal bailouts to local and state governments, which will only fuel reckless spending and misguided fiscal policies.

Summary of Key Findings:

  • The federal government will be providing at least $1.9 trillion in total assistance to state and local governments this year. That includes $790.7 billion in grants to state and local governments in pre-COVID funding, plus $1.1 trillion in additional support for state and local governments in response to COVID-19.
  • Instead of pushing for more funding, state and local policymakers should illustrate how they are utilizing the currently available federal funds to make the responsible decisions that will prioritize necessary services for their residents.
  • State and local policy makers should also enact reforms and spending reductions to address state budget challenges, many of which are the result of fiscal mismanagement prior to the COVID-19 crisis.

Background:

Last week, AFP-MN released a plan to help guide lawmakers with fiscally responsible steps to stem the tide of the fiscal and economic crisis our state is in due to COVID-19 and business shut downs.

Americans for Prosperity recently released, Recover Stronger: A Starting Point to Build An Economy that Works for All, a set of principles and recommendations that offers lawmakers a starting point to build a stronger economy as the country recovers from COVID-19. As Congress considers additional massive spending bills, the guidance is intended to present better alternatives to help the economy recover – and ultimately create a new, stronger economy.