Minnesota Democrats are calling for $200 million in taxpayer assistance after federal Immigration and Customs Enforcement (ICE) operations in Minneapolis disrupted local businesses that had relied heavily on migrant labor.
Minneapolis Mayor Jacob Frey said residents should not bear the financial burden of federal immigration enforcement actions.
“Minneapolis taxpayers should not be left to foot the bill for this situation that has been created by the federal government,” Frey said, arguing that the city’s financial stability has been shaken.
City Operations Officer Margaret Anderson Kelliher echoed that concern during a February 13 press conference, stating that federal actions have put the city’s economic footing at risk.
The financial impact claims follow ICE enforcement efforts that began in December, targeting illegal migrants, individuals accused of crimes, and others suspected of immigration violations. According to officials, more than 4,000 illegal migrants have been arrested in the broader Minnesota operation.
As enforcement intensified, many migrants reportedly stayed home from work out of fear of arrest. Some businesses reduced hours or scaled back operations due to staffing shortages. City leaders estimate that Minneapolis saw approximately $203 million in economic impact in January alone, including $10 million to $20 million in weekly losses for small businesses.
Frey said small businesses collectively lost more than $80 million in revenue, while hotel losses exceeded $5 million. He also cited rising food insecurity and service demands affecting tens of thousands of residents, including school-aged children.
The Minneapolis City Council has already approved $1 million to assist approximately 250 families with rent payments and allocated $500,000 for immigration-related legal services. Lawmakers are also considering an additional $5 million package to support small businesses affected by the enforcement actions.
Frey argued that the federal and state governments should provide relief, noting that Minneapolis contributes significantly to state revenue.
“I’m not too naive to think that we’re going to go to the state and federal legislatures and get the entire amount,” he said, “but Minneapolis is an economic engine for Minnesota.”
Minnesota Governor Tim Walz has also expressed support for financial assistance.
Critics, however, argue that the city’s long-standing “sanctuary” policies — designed to limit local cooperation with federal immigration enforcement — created an economy dependent on migrant labor and vulnerable to federal action. Supporters of enforcement contend that stricter immigration policies will ultimately benefit American workers through higher wages and reduced housing pressures.
Federal officials have indicated ICE operations will continue in Minnesota. Beyond arrests, enforcement efforts may include audits of employer hiring documentation and “no-match” notifications when discrepancies are found in worker records.
Business groups in other states have similarly voiced concerns about labor shortages tied to enforcement. Industry analysts note that tighter labor markets often result in increased wages as employers compete for available workers.
Democrats maintain that the immediate economic disruption requires intervention to stabilize families and small businesses. Opponents counter that federal immigration laws are being enforced as written and that local governments must adapt to shifting labor conditions rather than seek taxpayer compensation.
As negotiations continue over Department of Homeland Security funding and immigration policy nationwide, Minneapolis has become a focal point in the broader debate over enforcement, labor markets, and the role of sanctuary policies in major American cities.
