(C) Minnesota Reformer
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Gov. Walz identifies $2.7 billion in state infrastructure spending priorities

By:   ['Ricardo Lopez', 'More From Author', '- January'], Minnesota Reformer
Date: 2022-01

Gov. Tim Walz on Tuesday issued his opening offer in negotiations for an infrastructure and public-works proposal that would spend $2.7 billion to maintain the state’s assets, pay for housing and protect the environment.

The so-called bonding bill authorizes the state to borrow money in the form of general obligation bonds to pay for capital improvement projects throughout the state. Its passage requires a legislative supermajority, touching off a complicated process of wrangling votes from the four major legislative caucuses in a divided Legislature.

The $2.7 billion proposal is among the largest borrowing proposals to come from the governor’s office in recent years, but comes as Minnesota’s economic picture has improved dramatically since a year ago: The state budget office forecasts a surplus of $7.7 billion for the current two-year budget cycle. The state’s credit rating is also strong.

“The bonding bill is an investment,” Walz said. “Minnesota has one of the strongest credit ratings, so we get some of the best interest rates.”

The proposal includes $450 million for housing and homelessness; $560 million for infrastructure, which includes roads, bridges and water treatment systems. Walz is also proposing $262 million for environmental stewardship.

Walz and Lt. Gov. Peggy Flanagan toured the University of Minnesota’s under-construction Institute of Child Development, which received $29.2 million in bonding money in 2020. The center, in a building more than 100 years old, is being renovated and will more than double in size.

Under Walz’s plan, the U would receive $213 million in bonding money while the Minnesota State system would receive $261 million.

Despite the high price tag, Minnesota Management and Budget Commissioner Jim Schowalter said the bonding plan would maintain the state’s strong fiscal position.

“This recommendation is fiscally responsible,” Schowalter said.

It’s unclear how keen Capitol lawmakers are for a $2.7 billion bonding bill. In 2020, the legislature approved a $1.9 billion infrastructure package.

State Sen. Tom Bakk, an Indepedent from Cook who caucuses with Republicans, gave the governor’s plan a cool reception.

“It’s way bigger than we’ve ever done,” he said.

“The (House) should put the governor’s bill up for a vote,” Bakk said in remarks shared by the Senate GOP spokeswoman.

Bakk noted that state law requires that legislation authorizing borrowing must originate in the House.

“If it passes, the Senate will take it up for consideration in our committee,” he said. “If it doesn’t, we need to sit down bipartisanly and figure out what is the number that can pass the House.”

The House DFL, meanwhile, is considering an even larger bonding bill.

House Speaker Melissa Hortman, DFL-Brooklyn Park, said House Democrats want to propose a $3.5 billion bonding bill.
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