5/25/2023 3:52:51 PM
Acting Commissioner Kevin McKinnon
The 2023 legislative session is one for the history books. The budget forecast in February included a $17.5 billion surplus, and the Legislature went on to pass historic investments in legislative priorities – some of which have been in the works for years.
Governor Tim Walz and Lieutenant Governor Peggy Flanagan have signed into law budget items that will bring more jobs, workers, and opportunity to our state. This funding for DEED's work – approximately $1.8 billion in total – will bolster small businesses, help Minnesota's flourishing economy compete globally and strengthen our resilient workforce. This is roughly 10 times more funding than our agency typically receives. We are committed to making information, programs and request for proposals (RFPs) available in a timely manner. We're in the process of rolling out the new programs and will continue to share details across various DEED channels.
On the list for DEED is funding for numerous existing DEED programs that people across the state already depend on. New items include passage of the Drive for Five workforce program; the Minnesota Forward Fund; a state Paid Family and Medical Leave program; the creation of the Office of New Americans; and changes to Unemployment Insurance eligibility during the summer for some education workers.
Following are some key DEED items from the 2023 legislative session:
There are numerous historic items in the Jobs bill tied to economic development. The creation of an Office of Child Care Partnerships, support for Small Business Development Centers, additional funding for civil unrest rebuilding efforts, and investments in small business supports are some of the highlights. The bill also makes a significant investment in state matching funds for federal resources to help Minnesota attract and grow companies in high-tech and green industries by creating the Minnesota Forward Fund and investing a record amount to leverage CHIPS Act, IRA and DOD federal funds.
The Employment and Training Program investments are also historic, with a significant focus on supporting targeted populations with job skills training around in-demand jobs with family-sustaining wages. The bill creates three new programs in the Employment and Training space: the Targeted Populations Workforce Grants, the Drive for Five Initiative and the Clean Economy Equitable Workforce grant program. The bill also creates the Office of New Americans and doubles the state's funding in youth programs.
The Legislature made significant investments in programs that support Minnesotans with disabilities – including increased funding for State Services for the Blind and Individual Placement Services – and the creation of a new Reasonable Accommodation Fund, which will help employers make reasonable accommodations for workers with disabilities.
After many years of significant work, Governor Walz signed a bill establishing Paid Family and Medical Leave into law. DEED is excited to help provide financial stability and peace of mind to new parents starting a family or individuals providing care to sick relatives. This program will create a new division at DEED tasked with the program's development and initial IT build, program administration and outreach ahead of its launch date in January 2026.
There is still a need for state funding for broadband outside of several existing sources of federal funding. The House, Senate and Governor agreed to spend $100 million in state general funds on broadband infrastructure. Of this, it will be $60 million for the Border-to-Border Broadband Grant Program, and $40 million for the Low Population Density Grant Program. Additionally, the Border-to-Border Broadband Grant Program maximum award amount will go from $5 million to $10 million.
Another bill with significant ramifications is the legalization of adult-use cannabis. Most notable to DEED is $6 million in annual funding for three programs that provide financing for workforce development, small business loans and technical assistance related to cannabis businesses and workforce.
The Tax bill funded the Angel Tax Credit at $10 million in FY24-25. This program has already resulted in over $500 million in private investment in Minnesota startups – as well as the Film Tax Credit. The bill also includes two appropriations: one for the city of Windom and the other for the city of Minneapolis.
The Capital Investment bill made many investments in public infrastructure, including funding for three of DEED's existing programs and a new program tied to child care. This bill also funds more than 100 projects – for local governments and nonprofits – that DEED will administer.
This is a critical time for these investments in economic expansion and to build on the progress we've made in creating a durable, inclusive economic future. At DEED, our mission is to empower the growth of the Minnesota economy, for everyone. The DEED items passed in the One Minnesota Budget will have a lasting impact on workers, employers and communities across Minnesota for decades to come.
