In the time since our March update, Minnesota’s legislative leaders called for more clarity on the state’s economic situation to inform their work. However, the state’s budget remains unclear in large part because the U.S. economic outlook continues to be profoundly negative.
In February, the state budget forecast projected a $1.5 billion state budget surplus by the end of the current 2020-2021 biennium, but the global economic outlook changed drastically since Minnesota Management and Budget (MMB) prepared the February report. Revenue collections are beginning to fall below the February forecast, and the remaining positive budget balance could quickly disappear. Moreover, the Legislature already allocated over $550 million in general fund resources to respond to the pandemic.
At a hearing of the state Senate COVID Working Group, MMB Commissioner Myron Frans told Senators that his agency would likely take the unusual step of preparing an interim state budget forecast to adjust official state projections for the rapidly weakening economy. MMB is expected to release estimated budget figures next week to inform legislative action in the final weeks before adjournment.
Three weeks remain until the Minnesota Legislature is scheduled to adjourn sine die. Minnesota legislators came into the 2020 session with big expectations. Like everything else, their efforts shifted to address COVID-19. Here is a list of their efforts to date:
MAA connected with the state’s fiscal leaders regarding tax policy items that will aid innovation during the COVID-19 pandemic. Many of our community’s tax requests made it into the Senate’s COVID-19 Economic Recovery Bill. The bill removes the sunset on the Angel Tax Credit Program (ATCP), fully conforms to Section 179, delays estimated tax payments for individuals and businesses, and extends the due date for the state general levy.
Bobby Patrick VI, Vice President of Strategic Growth and Policy at MAA, testified in support of this bill. His testimony emphasized that programs like the ATCP are important to supporting entrepreneurs throughout the state. He told legislators that we are already seeing a reduction in access to capital for our startup community and that funding the ATCP will not only ease this tightening, but also send a strong message that Minnesota understands the key role the startup community plays in our economy. He also thanked the committee for including the other tax provisions that will help with cash flow, which is critical to keeping employees paid and employers afloat during this challenging time.
After more than a year of legislative hearings, the final version of the emergency insulin program bill came together in private talks. Throughout the process, all negotiators agreed a program was necessary, but differed on eligibility requirements, the extent of the supply for patients who qualify, and the role of drug manufacturers in the program. Legislators reached a compromise just as the COVID-19 crisis forced them to work remotely. They agreed on the following terms:
The Minnesota Senate passed the bill unanimously after it cleared the Minnesota House 111-22. Gov. Walz signed the bill into law mid-April.
A group of over 50 entrepreneurs, startup executives, and investors from the Medical Alley community sent a letter of support to congressional leadership in support of the New Business Preservation Act. The New Business Preservation Act would increase private investment capacity and startup formation in states and regions like ours that are currently underrepresented by investment firms in relation to their underlying innovation capacity. We are grateful to our signatories for their support of legislation that will drive economic activity, innovation, and job growth in critical industries in the wake of the COVID-19 pandemic and the economic downturn.
Governor Tim Walz, Mayo Clinic, and the University of Minnesota announced an agreement to coordinate and expand COVID-19 testing capacity in the state. Gov. Walz shared the emerging partnership will allow the state to conduct up to 20,000 tests per day and test anyone who has COVID-19 symptoms. The Governor also said leveraging the state’s healthcare system means Minnesota could have the largest testing capacity in the nation.
Last week, Gov. Walz announced he is dialing back the state’s stay-at-home order, allowing some 80,000 to 100,000 workers to return to work on Monday through EO-40. Prior to loosening restrictions for a given setting, businesses must:
Last week, the Minnesota Department of Employment and Economic Development (DEED) announced $247,000 in Launch Minnesota Innovation Grants to 11 of the state’s most promising, innovative, and scalable technology startups.
Launch Minnesota was created with bipartisan support during the 2019 legislative session as a statewide collaborative effort to accelerate growth of startups and elevate Minnesota as a national leader in innovation. Our association worked closely with legislators and DEED throughout the 2019 legislative session to help get this idea across the finish line.
Six of the awards announced in this third round are focused on medical device, pharmaceuticals, or other health and wellness technology. Five MAA members received the awards. It is programs like these that make our region The Global Epicenter of Health Innovation and Care™.