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Don Davis, Forum News Service, Published August 16 2012

Minnesota proposes $190M in aid for disaster recovery

ST. PAUL – Individuals and small businesses recovering from summer storms would share in a disaster recovery bill lawmakers are discussing.

The Federal Emergency Management Agency rejected Minnesota’s request to help home and business owners, but a proposed nearly $190 million funding package from the Dayton administration includes more than $30 million of individual aid.

Republicans a week ago said they had sticker shock over the proposal; they had expected something closer to $27 million. But when a legislative committee met Thursday, Republicans seemed more willing to fund a higher amount.

Sen. John Carlson, R-Bemidji, predicted lawmakers meeting in special session, perhaps a week from today, will approve spending $150 million to $200 million.

Lourey and Rep. Bill Hilty, DFL-Finlayson, said more than $30 million will be available for individuals and businesses that sustained damage in June floods, mostly in northeast and southeast Minnesota.

Most of the individual aid is likely to come in low-interest loans. Some of the loans may not need to be repaid if state-imposed conditions are met.

The individual aid comes as good news to some after the federal government denied the state’s request for such relief. The Small Business Administration is expected to offer some low-interest loans, but if people affected by floods cannot get that help, they would be able to turn to the state.

The disaster relief plan also includes help for northern Minnesota areas affected by an early July windstorm. It is not clear how much damage the winds caused because, in part, some townships apparently have not reported all of their damage. So far the state has received information about $6.4 million of damage.

There also is a question about how much flood damage will total.

The official estimate is $108 million, mostly in northeastern Minnesota. However, officials say they expect that to top $150 million just for public infrastructure such as roads.

Carlson and other Republicans said some funding requests could be pushed back to next year’s regular legislative session if it does not appear the money would be needed immediately.

Senate Minority Leader Tom Bakk, DFL-Cook, warned such a delay would be “very risky.” With a new budget deficit expected and other pressures on state funding, disaster relief could have a more difficult time passing in 2013, he said.

Legislative leaders and Gov. Mark Dayton are to meet today. Dayton said his goal is to sign an agreement that would set the session for Aug. 24 and limit debate to the disaster-relief bill.

On Thursday, lawmakers attending the relief-bill hearing said they were optimistic that not only would they agree to something similar to Dayton’s plan but they would do it in a week.

The $190 million plan includes funds that the federal government eventually will pay the state, leaving it unclear just how much the proposal would cost Minnesota. Some money would come from the state’s budget reserves, while other would be obtained by the state selling bonds.