With federal funds on the line, officials in Minneapolis and St. Paul are feeling the impact of Trump’s presidency

Minneapolis Chief Financial Officer Dushani Dye’s face lit up the morning of Feb. 7 when she received notice during a MinnPost interview that federal funding disbursements had officially appeared in the city’s bank account. 

“We have actually received the funding, so that’s only to say business as usual for the time being even with the chaos,” Dye said.

The funds came in about a week and a half after President Donald Trump signed an executive order to halt federal grant spending, with the reimbursement system scheduled to shut down Jan. 28, Dye said. Like many cities across the country, Minneapolis scrambled to submit its case for reimbursements at the deadline. A federal judge ultimately blocked Trump’s order, but questions about whether the funding would go through had lingered. 

“We did what we were supposed to do. We hit submit but we weren’t even sure if there were people working to process those claims. Just the logistics comparing how normally this would have happened — it was all unknown,” Dye said. 

Before Feb. 7, Dye said the city was “in a holding pattern because we don’t really know what’s happening.” 

In response to Trump’s announcement of the executive order, the city put together a team to figure out how much federal spending funnels into Minneapolis. The team identified about $54 million in federal spending in 2024 and an average monthly spend of $4.5 million. This number excluded American Rescue Plan dollars because that money was received “up front.” 

The federal funds were used for things like lead abatement for children in North Minneapolis and East Phillips, affordable housing, outreach, and rapid rehousing services for people experiencing homelessness, response to the opioid epidemic, violence prevention and safety services, emergency preparedness, security initiatives, and workforce development and employment training, according to the city. 

Before seeing the February disbursement of federal money in the bank “we were all on pins and needles,” Dye said. 

Dye remembers the first Trump presidency and, from a financial perspective, she says his second term  is different. 

“This time around, he has a mission. He has Project 2025, and it’s more about going down the list and just kind of doing what he said he would do,” Dye said. 

St. Paul also experienced federal funding uncertainty over the last two weeks. St. Paul Deputy Director of Finance Laura Logsdon and Grants Director Lindsay Bacher said that although the city  had prepared for changes with the incoming administration, the scope of Trump’s executive order was a surprise. 

“Just how broad it was was not something that I think was on anybody’s radar,” Bacher said. 

In December, St. Paul’s Finance Department conducted training for employees to try to anticipate how grant funding could change. This meant making sure all grants were updated and amended properly. The training also reinforced the need to be sure everything was properly documented, Logsdon said.

“We also gave people advice that things are going to move fast and they might move slow at the same time — to kind of anticipate the uncertainty,” Logsdon said. “I know people, like humans generally, have a hard time living with uncertainty. It’s hard to be like, here’s how you can prepare yourself for an ongoing period of not knowing what’s going to happen.” 

Federal grants make up about 20% to 30% of the city’s $27.6 million in annual federal revenue, Logsdon said. This includes CARES Act and American Rescue Plan dollars that have already been allocated. 

Federal money flows from agencies such as the Department of Housing and Urban Development (HUD) for housing and homelessness prevention. The city also receives funding for  capital infrastructure projects like bridges and roads as well as tax credits from the Inflation Reduction Act. Other city funding comes from winning competitive grants directly from the federal government or passed through the state or other entities organizations, including disaster relief funds and Justice Department programs like the COPS grant for law enforcement. 

“I don’t know if the average person knows how much federal funding impacts their daily life — the roads that we drive on, or the emergency personnel that come out when there’s been an accident or an emergency,” Logsdon said. 

On Feb. 1, the League of Minnesota Cities published a detailed breakdown of Trump’s executive orders and their impact on cities. 

The analysis is helpful because it’s hard to keep track of what’s happening with Trump’s executive orders from minute to minute, said Daniel Lightfoot, intergovernmental relations representative and manager of federal relations with the League of Minnesota Cities. 

“A lot of cities that are sort of halfway through a project process or request for proposals for something that are relying on federal funding or federal tax credits to help support those large capital projects were kind of left in the lurch,” Lightfoot said.

The Trump executive order came as a surprise, despite a general understanding that things would change under the new administration. Like officials in Minneapolis and St. Paul, the League of Minnesota Cities is continuing to try to anticipate what could come next. 

“It’s not necessarily uncommon for new administrations to temporarily pause federal funding for certain programs, but the breadth of that order was a surprise,” Lightfoot said.

Winter Keefer

Winter Keefer is MinnPost’s Metro reporter. Follow her on Twitter or email her at wkeefer@minnpost.com.

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