American Rescue Plan Act Phase 1

Council Adopted, Summary

Phase 1: Rescue and Restart

On July 2nd the City Council Adopted a series of proposals to be funded with American Rescue Plan Act dollars in the first phase of decision-making. The final financial schedule showing spending by Department and year can be found here. A record of the public comments collected as a part of this decision-making can be found here.


Tension exists between getting support funding into the community quickly and conducting robust engagement with residents and other jurisdictions. To balance those two interests Minneapolis is engaging in two phases of decision-making on ARP spending. Proposals in the first phase will focus on solving the following problems:

  • Housing instability;
  • Business closures and financial stress in small businesses;
  • Business, non-profit, and public organization's capacity and preparation for the lifting of social distancing measures; and
  • Responding to the nationwide increase in violent crime.

These proposals were authorized through a budget decision-making process that began with a Mayor recommendation in early June that utilized the work done by the subject matter experts and included input from Council and staff, and then went to City Council for amendments and adoption. A total of $101.966 million was approved to be spent in 2021-2024 in phase 1, less than half of the $271 million awarded to the City of Minneapolis. Spending in 2022-2024 is related to staffing costs associated with implementing programs funded in phase 1.


Total Council Adopted ARP Budget, Phase 1

2021 Spending by City Department

Below you will find summaries of proposals by goal area as well as links to proposal details.

Housing and Homelessness

Federal guidance determines that the Coronavirus State and Local Fiscal Recovery Funds may be used to respond to the public health emergency or its negative economic impacts. These funds may be used to serve communities that were disproportionately impacted by the COVID-19 pandemic, specifically through the development of affordable housing and support for individuals experiencing homelessness.


The Council approved spending $28.325 million to increase the availability of affordable housing, increase BIPOC homeownership, and house people experiencing homelessness through innovative and cross departmental programing.


Link to details about each of the Council adopted proposals

Economic Rebuilding

Federal guidance determines that the Coronavirus State and Local Fiscal Recovery Funds may be used to respond to the public health emergency or its negative economic impacts. Support for workers, businesses and nonprofits who have been harmed by the economic downturn is authorized.


The Council approved spending $37.12 million on support for small businesses, activation of the City's Cultural Districts through events and targeted services, job training for unemployed and low-income residents and financial support for arts organizations.


Link to details about each of the Council adopted proposals

Public Safety

Federal guidance determines that the Coronavirus State and Local Fiscal Recovery Funds may be used to respond to the public health emergency or its negative economic impacts. These funds may be used to serve communities that were disproportionately impacted by the COVID-19 pandemic through evidence-based violence intervention programs.


In 2020 the entire country, including Minneapolis, saw a steep increase in crime. The Council approved spending $10.983 million on violence prevention through funding for additional violence interrupters, trauma response, expanded group violence intervention programming, law enforcement support and grant funds for youth and community public safety programs.


Link to details about each of the Council adopted proposals

Climate and Public Health

Federal guidance determines that the Coronavirus State and Local Fiscal Recovery Funds may be used to respond to the public health emergency. These funds may be used to serve communities that were disproportionately impacted by the COVID-19 pandemic through programs or services that facilitate access to health and social services.


The Council approved spending $6.8 million to begin a plan to eliminate childhood lead poisoning, meet community food needs, end human trafficking, and support school and community access to health and mental health care.


Link to details about each of the Council adopted proposals

City Capacity and Performance

Federal guidance determines that the Coronavirus State and Local Fiscal Recovery Funds may be used to address workers that were negatively economically impacted workers, and improve the efficacy of public health or economic relief program.


The Council approved spending $7.015 million to hire staff temporarily to implement ARP funded programs in several city departments, to provide relief from required pay cuts to city employees, to fund a Truth and Reconciliation Commission, and to support our business community and the Minneapolis Convention Center through events incentives and communication campaigns.


Link to details about each of the Council adopted proposals

Total Council Adopted ARP Budget, Phase 1

2021 Spending by Goal

Total 2021 Spending By Goal, Phase 1

Minneapolis Revenue Loss in 2020

Minneapolis Revenue Loss in 2020

When large events were cancelled and many businesses shifted to working from home in March of 2020, Minneapolis sales taxes sharply declined. Over the remaining months of 2020 the City saw declines in its permitting and fee revenues as well.


The American Rescue Plan gives a clear formula for cities to use to calculate their revenue loss, not simply compared to the prior year, but compared to where revenues were expected to be pre-pandemic.


Across all of the City's qualifying ARP revenue sources, the City has experienced 9% annual growth over the past 3 years - growth which supports the City's core functions and services.


Between potential growth and actual receipts, the City missed $281M in revenue in 2020.


Budget Cuts In Response

In the summer of 2020 the Mayor and City Council approved reductions in spending to manage the sharp downturn in revenues. Actions included:

  • Reducing budgets across the City by over $80 million for the second half of 2020;
  • Using over $50 million in cash reserves; and
  • Refinancing of debt and shifting cash spending on capital projects to debt financing.

In the 2021 adopted budget over 300 positions are held vacant to lower spending in the City in response to the ongoing economic recession.


Minneapolis will recieve $271 million through the American Rescue Plan

Minneapolis has been allocated a total of $271 million through the Coronavirus State and Local Fiscal Recovery Fund section of the American Rescue Plan. The City has received $135.5 million from the federal government and will receive an equal amount in May 2022. Council adopted $90.243 million in phase 1 spending in 2021 with a total of $101.966 million approved to be spent in 2021-2024. Spending in 2022-2024 is related to staffing costs associated with implementing 2021 funded proposals.

Looking ahead

In June the City Council held a public hearing on the Mayor's Recommendations for phase 1 of ARP resources. Later that month the City Council amended and adopted spending proposals.


Now that phase 1 is adopted, the City will turn to the annual budget process for 2022. The City will build out a public engagement plan to collect feedback on priorities for spending in phase 2 and work with our partners in neighboring jurisdictions to coordinate investments. The Mayor will make recommendations on spending for the remaining $170 million of ARP funding in late fall and Council will amend and adopt shortly after.