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The DFL and GOP in the Minnesota Legislature have reached a tentative agreement to end the wrangle over replenishing the state's unemployment insurance trust fund while providing bonus checks to COVID-19 frontline workers.

Both parties for months had been in agreement that the unemployment insurance fund, which felt into $1.3 billion deficit during the pandemic, needed to be replenished, with first the GOP-led Senate and eventually the DFL-led House approving $2.7 billion of funding ahead of the April 30 1st quarter tax deadline.

But there remained disagreement over how much should be dedicated to so-called "hero pay" for Minnesota's pandemic frontline workers.

Senate Republicans wanted to handle the two issues separately and passed a standalone $2.7 billion unemployment insurance bill in February. DFLers however linked hero pay with unemployment insurance in the House bill passed earlier this week, meaning negotiations had to continue.

The GOP had wanted to spend $250 million to provide $1,200 checks to around 200,000 workers including nurses, long-term care workers, hospice staff, first responders, and corrections officers.

The DFL however wanted to spend $1 billion to provide payments of up to $1,500 for a larger pool of 667,000 frontline workers, which would include all those mentioned in the Senate GOP's plan, plus meatpacking plant workers, grocery workers, janitorial staff, and daycare workers.

The tentative agreement reached Thursday, if approved in both House and Senate, includes $2.7 billion for the UI fund and will see $500 million spent on hero pay, with checks of $750 going to the 667,000 workers in the House DFL plan.

The agreement struck between the GOP and DFL was revealed during a MinnPost public discussion, and will also see another $190 million in federal COVID-19 funding appropriated for use by Gov. Tim Walz for COVID-19 purposes.

Businesses that received payroll tax bills that reflected the increased UI rates prior to the deal being struck will get a refund on the difference if they've already paid them. Many have held off on paying however, assuming that a deal would be reached by the deadline.

Not included in the agreement is a House DFL plan that would allow hourly school workers to claim unemployment insurance during school breaks. This DFL intends to pursue this separately.

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