CHICAGO — Minnesota will draw from reserves and bond proceeds to help fund a $167.5 million relief package approved by lawmakers Friday for Duluth and other northeastern and central areas of the state hard hit by June storms and flooding.
The package overwhelmingly won approval from lawmakers during a special session Friday called by Gov. Mark Dayton. The governor was expected to sign the legislation quickly.
The session was convened after several weeks of discussions during which Dayton and legislative leaders settled on the $167.5 million aid figure and agreed to limit debate during the special session to the appropriation bill. Dayton originally wanted $190 million in assistance.
The aid would help cover the local portion of public safety costs, road repairs, and funding to repair infrastructure, and public buildings in the 15 counties and three tribal lands declared federal disaster zones.
The funds will help cover the local portion of qualified expenses reimbursed by the federal government which pays for 75% of those costs. The package also would provide direct help for homeowners with low-interest loans and cover temporary housing expenses.
About $74 million would come from the general fund ending balance and reserves, another $26 million from general fund supported borrowing and $35 million from GO truck highway supported bonding, with transportation related funds covering the remainder.
The state recently sold $658 million of new-money for capital spending. Ahead of the sale, all three rating agencies affirmed the state's high double-A ratings. Fitch Ratings and Standard & Poor's assign a stable outlook to the credit while Moody's Investors Service assigns a negative outlook.
The latest revenue figures show Minnesota closed out 2012 ending June 30 with $336 million more than predicted when the annual February forecast was released, and the state expects this year to rebuild its reserves with $1 billion in its rainy-day fund.
