The Minnesota Legislature late Monday night approved a COVID-19 relief package, providing aid to struggling businesses and extending unemployment insurance to workers whose benefits could dry up after the holidays.

The $242 million deal will funnel grants directly to bars, restaurants and entertainment venues that Gov. Tim Walz ordered closed for four weeks in mid-November as a second wave of COVID-19 cases hit the state.

It now goes to Walz, who said he supports the aid package.

Local governments will direct some funding to businesses in their communities hit hardest by the pandemic, while Minnesotans on unemployment insurance will see those benefits extended for another 13 weeks into April.

Up to 125,000 Minnesotans, some of whom have been out of work since the pandemic hit in March, were facing their last unemployment checks by Dec. 26.

Lawmakers described the deal as a “bridge” into the new year for Minnesotans while a federal stimulus package remains in limbo in Washington, D.C. “We do not want to wait for Congress to decide what it’s going to do,” said House Majority Leader Ryan Winkler, DFL-Golden Valley. “We want Minnesotans who are unemployed to know, especially at this time of year, that it’s going to continue.”

The proposal easily passed Monday through the Republican-led Senate and DFL-controlled House, as legislators gathered for the seventh special session of the year. The session was automatically called after Walz extended his emergency powers for another 30 days to respond to the pandemic.

The deal includes $88 million in grants for restaurants, bars, bowling alleys and other businesses that have seen reduced sales of at least 30% from last year, as well as $14 million for some movie theaters and convention centers that have been forced to close.

The largest amount, $114 million, will go to counties to direct to businesses in their communities. The bill also waives some regulations and fees for businesses forced to shut down.

Bar and restaurant owners said they’re thankful state lawmakers stepped in while there’s still so much uncertainty around the federal relief package. “I’m grateful that this is being done because it’s taking awhile on a federal level, and that is definitely where it’s going to make the most amount of impact, not only to our country but to our industry as a whole,” said Ann Kim, chef and co-owner of Vestalia Hospitality, which includes the popular Minneapolis restaurants Pizzeria Lola and Young Joni. “This is a really good step forward in the right direction.”

Negotiations on a package have been ongoing for weeks since Walz’s order closing bars, restaurants, entertainment venues and fitness centers on Nov. 20. The governor is expected to announce this week whether that pause will continue beyond Friday, when it is set to expire.

Even as lawmakers came together on COVID-19 relief, Republicans said they’re frustrated by the ongoing shutdowns and lack of clarity on whether Walz’s closure of bars and restaurants will continue. It’s the second closure of bars and restaurants since March.

“We should have been ready for this without shutting down our local economies again,” said Sen. Eric Pratt, R-Prior Lake, author of the relief bill in the Senate. “These businesses are your neighbors. They are people you go to church with.”

Senate Republicans and some Democrats made another attempt Monday to end Walz’s emergency powers, which allow him to order the closure of businesses. The Senate voted 40-25 to end the emergency powers, but House Democrats declined to take a similar vote. Both chambers must approve the measure to remove the governor’s powers.

Pressure intensified for a relief package after Minnesota’s December economic forecast, which showed a projected $2.4 billion budget deficit had turned into a $641 million surplus for this budgeting year.

But the final deal did not include everything that everyone wanted, including aid for child care providers, cash assistance for low-income families and housing relief that Democrats had proposed.

Lawmakers also struck down an amendment to let bars and restaurants sell double the amount of beer and wine with takeout food orders and premade cocktails to go, which industry leaders say represents huge untapped revenue potential for them during the pandemic.

“It’s been amazing, the support people have had for local places, but it’s not enough,” said Robb Jones, co-owner of Meteor Bar in Minneapolis. “Even when we were open, we weren’t making enough to even pay ourselves.”

Staff writers Jessie Van Berkel and Sharyn Jackson contributed to this report.

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