Minneapolis could face quarter-billion-dollar budget crunch due to COVID-19 and recent unrest

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The city of Minneapolis is already facing a $165 million cost from lost revenue and unplanned expenses due to the COVID-19 pandemic. Now, recent unrest could add to that growing budget problem.

Minneapolis City Council member, Linea Palmisano, chairs the council's Budget Committee and she told 5 EYEWITNESS NEWS the damages, just to city-owned property, could reach $100-million which would put the city in a $265 million budget crunch.

"The facts are indisputable and they don't look good," said Palmisano. "We have to start acting now and these will be some very difficult decisions in the coming weeks."

Palmisano said none of the COVID-19, or civil unrest damages have been finalized but admitted the numbers are probably going to exceed $200-million and the possibility of laying off city employees is very real.

"I don't think we can avoid layoffs, but there are a lot of things you do before layoffs," said Palmisano. "Voluntary budget leave, furloughs all would happen before layoffs, but we need to find something to do at this point in time."

Palmisano said the city will look at every department for cost savings and it all has to be done quickly because the city must also approve its 2021 budget by the end of December.

When KSTP asked Palmisano if the city layoffs could be large in number, Palmisano responded, "I would say it could be significant."