Minnesota Should Pay Businesses for COVID-19 Lockdown Losses, State Lawmaker Says

A Minnesota state representative says pandemic recovery will take longer for some than others. And he thinks business owners should be compensated for losses from state-mandated lockdowns.

Minnesota National Guard personnel assist residents at a COVID-19 testing facility in the Stillwater Armory National Guard Center in Stillwater, Minn., on Dec. 10, 2020. Stephen Maturen/Getty Images

The recovery from the COVID-19 pandemic will take longer in Minnesota for some businesses than others, and a state lawmaker thinks that business owners should be compensated for their losses from state-mandated lockdowns.

“If [state officials] are going to force you to close, they ought to have to cover the revenue you are losing,” Rep. Shane Mekeland, a Republican, told The Epoch Times.

He’s growing more optimistic about the prospects for success of legislation that he’s introduced. But his record indicates there may be some tough sledding.

Mr. Mekeland introduced legislation in 2020 and 2021, respectively, that called for the state to pay business owners who lost money as a result of Gov. Tim Walz’s executive orders. However, officials who deemed the businesses “nonessential” don’t want to cover the cost of their orders, according to Mr. Mekeland.

“[My bills] didn’t even get a hearing,” he said.

Minnesota Gov. Tim Walz speaks during a briefing in St. Paul, Minn., on April 19, 2021. Stephen Maturen/Getty Images

He introduced the bills after Mr. Walz issued executive orders meant to stop COVID-19 that listed so-called essential businesses while ordering others to reduce their operating hours or close entirely.

The orders hit some independently owned bars and restaurants especially hard, forcing some to permanently close.

Several owners who defied the orders in a last-ditch effort to save their businesses now face thousands of dollars in fines, bankruptcy, and legal problems, The Epoch Times previously reported.

Some have gone to jail.

Mr. Mekeland says the situation seems similar to the legal concept of eminent domain.

Lisa Hanson, the former Interchange Wine and Coffee Bistro owner, in Albert Lea, Minn., on June 21, 2023. Ms. Hanson lost her business and served 60 days of a 90-day jail sentence due to state-imposed COVID-19 lockdown policies. Michael Clements/The Epoch Times

According to the Cornell Law School Legal Information Institute website, eminent domain “refers to the power of the government to take private property and convert it into public use, referred to as a taking. The Fifth Amendment provides that the government may only exercise this power if they provide just compensation to the property owners.”

If the government must pay property owners for land taken for a public purpose, it ought to reimburse business owners for revenue lost to a government order, Mr. Mekeland said. He said he spoke with an attorney considered an expert in eminent domain, who was intrigued by the idea.

The lawyer helped Mr. Mekeland draft the proposals that he introduced in the Legislature.

Under the measures, a business owner whose establishment is closed by government order could sue in district court for loss of income. The plaintiff would have to prove the loss was due to the order, and also have to document the amount of the loss and whether it was money, real property, or some other form. They could also seek legal fees, court costs, and other expenses.

Any lawsuit would have to be filed within one year of the expiration of the executive order.

Mr. Mekeland’s first proposal, HF 4651 Inverse Condemnation; Peacetime Emergency; Compensation, was introduced in April 2020. While it was referred to the Government Operations Committee on May 9, 2020, it didn’t advance out of committee.

He tried again in the next legislative session.

On Feb. 1, 2021, he introduced HF 556, which contained the same language. It was promptly referred to the Rules and Legislative Administration Committee, where it quietly was rejected.

That committee also rejected another bill introduced by Mr. Mekeland. HF 1545, the Reopening of Businesses for Safe Operation During the COVID-19 Pandemic, was meant to provide a path to reopening.

That measure would have allowed businesses with an approved COVID-19 Preparedness Plan to reopen without being subject to “any additional penalties for a violation of the governor’s emergency executive orders.”

Bill Called for COVID-19 Plans

Under the proposed law, businesses would have to “provide site-specific best practices for the business including ... health and wellness; social distancing; cleaning, sanitation, and protection; and operations and communications for employees and members of the public.”

The plan must be written following “recommendations and guidance provided by the Minnesota Department of Health and The Centers for Disease Control and Prevention.”

According to Hospitality Minnesota, which refers to itself as a lodging, restaurant, resort, and campground association, the bill was shelved at a time when many businesses would have welcomed the help. The group provides several economic data snapshots each year to update its membership on the state of the hospitality industry in Minnesota.

Its economic data snapshot for the fall of 2020 painted a grim picture.

“The National Federation of Independent Business indicates that one-in-five small businesses in America are likely to shutter in the coming months,“ the statement opens. ”While this number is shocking, the picture emerging for many hospitality businesses is even more challenging.”

More than half of the state’s restaurant and food service business owners were expected to be insolvent by the following February, the report stated. Almost 70 percent of those business owners anticipated revenue for that year to be significantly lower than the previous year.

According to the group’s winter 2022 snapshot—it’s the most recent—things were looking up, but business owners didn’t feel like they were quite out of the woods.

Hospitality Minnesota reported that the number of food service businesses concerned about solvency had dropped to 46 percent. Still, 64 percent of food service businesses reported first-quarter earnings that lagged the same quarter in 2019.

The entire hospitality industry—like many other industries—also is dealing with a workforce shortage.

Data on how many restaurants closed in Minnesota during the pandemic are difficult to find. Hospitality Minnesota didn’t respond to a request for comment for this story. But according to some in the industry, the picture wasn’t pretty.

Estimated 10,000 US Restaurants Closed

The National Restaurant Association estimated that at least 10,000 restaurants had closed nationwide by December 2020.

Mr. Mekeland doesn’t believe state officials were surprised by the numbers. He said that legislators gathered in May 2020 to be briefed on what officials expected to happen during the pandemic.

“They said, ‘We know we’re going to lose 60 percent of all small business in Minnesota,” Mr. Mekeland said.

He believes state officials used the pandemic to create rules and policies as precedents for the next emergency. Considering state officials’ apparent reluctance to assist small-business owners, Mr. Mekeland said he could only come to one conclusion.

Part of the Plan

“It was happening with governors across the nation. This was the plan,” he said.

Mr. Mekeland says he'll refile his legislation, since he believes support is growing. He said many Minnesotans of all political stripes are growing weary of state leaders’ heavy-handed tactics. He said the next election will be critical.

“I will refile if we can get the majority in the House,” Mr. Mekeland said. “I’ve been talking to many people of both parties, and they’re telling me that they’re done.

“I’m thinking there’s hope.”