This is an analysis of the Governor’s budget proposal as it relates to the ALANA (African American & African immigrant, Latino Asian and Native American) communities in Minnesota. The $1.4 Trillion ALANA economy includes the diverse economic presence from the ALANA workforce to the cultural malls, ethnic chambers, businesses, homeowners, renters and developers all across Minnesota.
In summary – We need to move from Good to Great. This is a good budget proposal with its intentional focus on inclusion and allocation of resources to various needs of the ALANA communities. It needs to become a “Great” budget proposal by investing in long term funding for wealth building in the ALANA communities.
In analyzing the proposed budget, I focus on four dimensions – breadth and depth, cultural intelligence, resources allocated, and a focus on outcomes and accountability.
This analysis is also rooted in the historic prevalence of racial discrimination in Minnesota documented in the redlining and racial covenants in real estate transactions across the state.
The consequences of living in economic prisons is well demonstrated in the Big Data analysis of the Harvard economist, Raj Shetty. His research shows that living in resource poor neighborhoods prevent long term economic mobility for those residents.
We also need to operate with cultural intelligence as this data from the cultural profiles of Minnesota Compass shows – great diversity of experience within and between ALANA groups.
The proposed budget has an intentional focus on equity – perhaps the first time in Minnesota history where every new budget area has an “equity” impact statement.
The proposed budget allocates a significant amount of resources to the ALANA communities across a wide range of areas – Housing, Business Development, E-12 education and health and human services.
How Minnesota Can Go From Good to Great in Closing the ALANA Disparity Gaps
We have a once in a lifetime opportunity in Minnesota to address the large racial disparity gaps in Minnesota with long term funding and with depth in our strategies around inclusion.
While the proposed budget increases spending in a significant way across many departments, critical large departments appear not to show much progress.
The Department of Transportation spends millions of ALANA and other tax payer money on construction of roads and bridges – yet has a very poor track record on inclusion of ALANA businesses and workforce as documented by the recent report of the Legislative Auditor. The current budget proposed for MNDOT does not report clear ALANA outcomes. There is some good work happening at MNDOT but not at the scale needed in terms of it being a huge engine for economic growth. Specially relevant when the construction of roads had in the past destroyed ALANA communities such as the African American community in Rondo.
One does not also find the scale of inclusion in how the state spends its ALANA and other taxpayer dollars in goods, services and construction projects. The record of ALANA utilization has hovered around 2 percent for decades. This has been in spite of some key developments recently such as central certification.
We need to remember that the mechanism of racial discrimination operates through poor infrastructure, health, education, cultural assets and business development spending.
The denial of human value is the bedrock of racism as it converts a human being into an object. Consequently there has been a lack of investment in ALANA cultural assets. It is very difficult to find data on investment in ALANA cultural assets such as on the State Arts Board website.
Capital Investments
There is a separate package of $3.3 billion in infrastructure funding known as the Bonding bill. The good news is that $200 million, for perhaps the first time in Minnesota history is allocated for “equity” projects. This is about 6 percent of the total package. However ALANA communities spread out all across Minnesota make up 20 percent of the population and so in relative terms it is an underinvestment in ALANA infrastructure.
Other areas that take up significant resources are the Paid Family Leave proposal, making Cannabis legal, and tax credits and rebates.
Paid Family Leave will benefit ALANA essential workers.
Cannabis – the priority here is the expungement of criminal records because of the racial patterns in sentencing on drug offenses. From the experience of other states, the business of Cannabis will not benefit ALANA businesses as they do not have the muscle power to break into the established economy with entrenched economic interests. More worrying is the impact on ALANA children and youth – already under severe mental stress in the presence of easily available “gummies.”
Child Tax Credits and Rebates. A priority this session that could help the ALANA communities break out of poverty is the “benefits cliff” – at a certain income level the drop in benefits is significantly larger than the gain in income. Fortunately there is a lot of research including at the National Council of State Legislatures and the Federal Reserve Bank as well as with local organizations with solutions. I particularly like the “savings accounts” which allow the increase in income build up as savings without the benefits cliff penalty kicking in right away. This allows the family to build some wealth.
What is needed – Two Year Budget Cycle Investments Plus Long Term Funding
Apart from ensuring that departments like MNDOT and overall state spending help grow ALANA businesses, there is another very important strategy.
A two year budget cycle spending is very short term focused and will not address long term racial disparities in Minnesota. That is why we need with this one time budget surplus to establish long term funds in the following key areas:
Restoration Fund $300 million – There is a strong case to invest in a long term fund with a specific focus on those communities hurt most by racial discrimination in the past – African Americans, Native Americans and Migrant workers.
Land Banks $500 million Fund – economic prisons constructed through redlining deprived ALANA communities from building equity through real estate ownership. The establishment of a $250 million Land Bank Fund can help build wealth through the popular cultural malls and neighborhood businesses, land for ALANA farmers and site control for ALANA developers.
Flexible Capital – 250 million fund- such as revolving loan funds, microloans and microgrants for startups, alternative finance such as profit sharing models, working capital, loan guarantees and supporting equity funds.
Workforce Development $200 million fund – In many key sectors of the Minnesotan economy the number of workers approaching retirement is over 25 percent of that sector. At the same time ALANA workers are younger and can fill that labor gap. We need investments in career pathways, youth paid internships and apprenticeships and capacity building of workforce organizations.
ALANA Women Fund $100 million – In addition the presence of gender barriers and more intensely for ALANA women calls for a long term fund for ALANA women to facilitate wealth building such as business development and supporting ALANA female developers.
ALANA Cultural Assets Fund – $10 million – every legislative session ALANA communities testify on the need for dedicated funding for building their cultural assets and at the end of the sessions there is very little investments. We need a long term ALANA cultural assets fund that will invest at least a million dollars every year on ALANA cultural assets in addition to making the State Arts Board and the Cultural Heritage Fund more inclusive in funding.
Data Used in Analysis
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Hello Dr. Bruce,
I always admire your depth knowledge about ALANA communities especially your work about the African immigrant community and your work has given us the opportunity to see what our potentials are. You took this experience and research to the next and highest level. I personally support your work and will do my part to contribute. Thank you so much!