American Rescue Plan Act Phase 1

Mayor's Recommendations, Summary

Phase 1: Rescue and Restart

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 planning to move forward with two phases of decision-making on ARP spending. Proposals in the first phase will focus on solving the following problems:

  • Housing instability;
  • Small business closures and financial stress;
  • 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 will be authorized through a budget decision-making process that begins with a Mayor recommendation in early June that utilizes the work done by the subject matter experts and includes input from Council and staff, and then goes to City Council for amendments and adoption. The total amount spent in this first phase will be $90 million, a smaller piece of the full amount awarded to the City of Minneapolis.


Total Mayor's Recommended ARP Budget, Phase 1

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 Mayor recommends spending $28 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 Mayor's recommended 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 Mayor recommends spending $37 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 Mayor's recommended 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 Mayor recommends spending $12 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 Mayor's recommended 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 Mayor recommends spending $5 million to begin a plan to eliminate childhood lead poisoning, meet community food needs, and support school and community access to health and mental health care.


Link to details about each of the Mayor's recommended 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 Mayor recommends spending $7 million to hire staff temporarily to implement ARP funded programs in several city departments, to provide relief from required pay cuts to city employees, and to support our business community and the Minneapolis Convention Center through events incentives and communication campaigns.


Link to details about each of the Mayor's recommended proposals


Total Mayor's Recommended ARP Budget, Phase 1

Spending by Goal

Total 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 ARP allocation is $271 million, Phase 1 spending is $90 million.

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.


Looking ahead

Women at a farmers market

In June the City Council will hold a public hearing on the Mayor's Recommendations for Phase 1 of ARP resources. Later in the month the City Council will amend and adopt spending proposals.


After 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 $180 million of ARP funding in late fall and Council will amend and adopt shortly after.