Government funding helped rural economies survive pandemic

·4 min read

Jul. 24—ST. CHARLES — When the city of St. Charles got its first round of CARES Act funding — $100,000 — it gave grants of $5,000 apiece to 20 different businesses.

"We disbursed those funds to those who really needed it, maybe someone who didn't have access to funding through some other programs," said City Administrator Nick Koverman.

The funding helped the city retain nearly every business through the COVID-related economic shutdown that kept businesses ranging from beauty salons to burger joints closed to customers.


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"Our residents, area residents, really worked to support those businesses to keep the doors open," Koverman said.

The effort to keep businesses open hasn't stopped.

U.S. Rep Angie Craig, who represents Minnesota's 2nd Congressional district, said the government owes it to those businesses that were closed by the government during the pandemic.

"A lot of the restaurants suffered serious financial consequences when we asked them to shut down last year," Craig said. "A lot of those businesses lost revenue from the prior year. I just think it's critically important if the government asks businesses to shut down that we take responsibility."

Craig is asking for a replenishment of the Restaurant Revitalization Act with an additional $60 billion. The fund is designed to support local bars and restaurants that were impacted by COVID-19. Craig said the U.S. Small Business Administration has told Congress that the fund received more than 362,000 applications requesting $75 billion in funding, a number far in excess of the $28.6 billion originally allocated to the fund.

Restaurants and bars are often the lifeblood of small-town economies, Craig said, providing jobs as well as a place for people to gather.

Craig said she's recently joined a committee of economic fairness and growth that looks at ways to create economic development in smaller communities and in the agriculture industry across the country. One of the ways she believes small towns can stay competitive is if they have the broadband infrastructure needed to compete.

"The question is how do we get entrepreneurs to come back to our small towns? How do we get farms handed down from one generation to the next or get health care providers to rural areas?" she asked.

In a way, Craig said, COVID-19 has forced small towns as well as state and federal agencies to look at rural issues more closely.

"To me, this is such a moment in time where we might have a once in a generation opportunity to address these things," Craig said.

Making sure rural communities have the amenities you'd find in a larger city is important, she said. That means everything from access to basic health care to those restaurants that provide quality of life options.

Brian Grudem, Zumbrota's city administrator, said one of the biggest downsides of the pandemic was the fact the community could not enjoy those quality of life options.

"We had some negativity, but a lot of it was the social impact of not being able to go to restaurants and bars," Grudem said.

As restrictions have been removed, the community is coming back out to enjoy the restaurants and shops in town, he said.

"The stores downtown did suffer during COVID, but everybody in our community worked to keep businesses afloat," he said. That included a lot of ordering out at restaurants and finding creative ways to patronize the shops in town. "We didn't lose any stores in that time period. We don't have any empty storefronts on Main Street."

Grudem said the recovery in Zumbrota has been quick, and he points to a couple of reasons. One, he said, was Craig, who fought for funding in her district.

A second, he said, was the business owners in town working together to support one another. The downtown businesses created the Zumbrota Independent Business Alliance and has found ways to sell merchandise online, make referrals to one another, and generally support each other.

"They're sending customers to each other," Grudem said. "They really helped themselves and helped each other out."

Grudem said there is still some impact of COVID-19 being felt in businesses, and he's glad the city will get some American Rescue Plan money, which the city will have four years to spend rather than the hurried three months or so of CARES Act funding.

Craig said helping rural communities isn't easy, and the federal government hasn't created a commission to look at rural economies since 1957.

"I don't think there's going to be a silver bullet answer," she said. "But there's an opportunity for us to take a fresh look at this."

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