Self-Insured Minneapolis Will Tap City Budget to Pay Floyd Settlement

Minneapolis will have to look beyond its insurance fund to pay out the $27 million settlement to George Floyd’s family over his killing by police last year.

The settlement, one of the largest pre-trial payments for police misconduct ever, will come in part from the city’s general fund, according to a city spokesperson. The official said Minneapolis collected more revenue than expected in 2019 and planned to use the excess to prepare for budget shortfalls and these liabilities. Minneapolis also uses a self-insurance pool, which municipal agencies pay into, to finance workers’ compensation, accrued sick leave benefits and lawsuits against the city.

For fiscal 2021, the city budgeted $9.2 million for liability claims, more than four times the amount set aside for last year. Still, that amount won’t be enough to cover the cost of the civil litigation. Minneapolis already spends roughly a third of its general fund budget on policing, despite cutting nearly $30 million in the wake of protests against police brutality sparked by Floyd’s death.

Typically, higher profile police misconduct cases settle for $5 million or $6 million, said John Rappaport, a professor at the University of Chicago Law School. In this case, the video, egregious nature of former officer Derek Chauvin’s conduct and increased scrutiny likely motivated the pay-out agreement.

“The city is gaining something for not showing up in court,” Rappaport said. “It’s worth a lot to the city to not litigate the case.”

The payment to Floyd’s family marks the latest settlement of a high-profile police brutality case, and it comes just days into the proceedings for Chauvin’s murder trial. Breonna Taylor’s family settled with Louisville, Kentucky for $12 million in September, while also notching promised reforms to police policy.

In 2019, Minneapolis paid $20 million to the family of Justine Ruszczyk Damond, an unarmed White woman who was killed by police. That settlement was previously the largest paid by the city, and led to concerns about higher property taxes.

Cities are also facing suits from those brutalized during the police response to protests that came in the aftermath of Floyd and Taylor’s deaths.

“All of us can’t lose sight of the fact that the public is paying for this,” Rappaport said.