ST. PAUL — What happens when you get unexpected money?
Do you treat yourself to something new? Buy something for your friends? Or add that money to what you already pay for or owe?
Minnesota State Auditor Julie Blaha said local governments that used one-time COVID-19 relief money to add to work they were already doing had the most success.
“They already had the infrastructure for it, and it was something that they already knew was working in their communities,” Blaha said.
Blaha joined the April 26 KAXE Morning Show to talk about how the federal dollars were spent in communities across the state.
In Duluth, when the first round of the CARES Act — or Coronavirus Aid, Relief, and Economic Security Act — money was disbursed, city officials dreamed big. But not everything fit within CARES restrictions, Blaha explained. So when more federal funding came through the American Rescue Plan Act, they were ready.
“They planned for the end right at the start.”State Auditor Julie Blaha
“When places kept their plans, they were more successful,” she said. “So even if you don’t know if that one-time money is coming, it helps to prepare for it.”
Collaboration was key as well. Blaha said working with organizations and accepting input from places like the League of Minnesota Cities or the Association of Minnesota Counties, made plans easier to create. And infrastructure with the larger organizations made communicating with the federal government easier.
“I think the most important thing people did, though, was they planned for the money to run out right away,” Blaha said. “They planned for the end right at the start.”
In doing this initial planning, city, county and township governments were less likely to use reserves or incur debt. There’s now infrastructure to be in a better position when one-time money comes along again, like the budget surplus in Minnesota, she said.
“One key takeaway is we’ve got to maintain ongoing funding streams so we have something to build on in a crisis,” Blaha said.
Each year, the Office of the State Auditor uses data to share a picture of local government finances. Blaha goes on a listening tour around the state to learn how local governments are doing as part of the report. The “State of Main Street” is “designed to help decision-makers with choices to help keep local governments strong,” the office states on its website.
Along with understanding how local governments used one-time money from the federal government, the State of Main Street also addressed how grantors can make it easier for small governments to apply.
Advice to the Minnesota Legislature about the budget surplus was “make sure that it has long timelines — long enough to both plan and implement properly.”
She said the government and funders should be clear about what money can be used for, but also flexible so it can be customized to a local government. Local governments can miss funding opportunities that aren’t clear or easy to report.
“You gotta report enough so that we can all trust that everyone’s doing it right. But you want to make it simple enough that you get that data easily and quickly,” Blaha said.
Marijuana legalization
The KAXE conversation took place during the week the Minnesota House and Senate passed different bills legalizing recreational marijuana.
When asked her opinion, Blaha said, “The impact of marijuana use is felt locally so the benefits of marijuana use should also be felt locally.
“When you have a legal product that’s out there, you end up having better financial structures because you can avail yourself of banking.”
Blaha said she appreciates legalization because it will make the marijuana industry more transparent and more resistant to fraud.
