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Minnesota Legislature

Capital investment division releases $1.5 billion bonding bill

The House Capital Investment Division unveiled the omnibus capital investment finance bill, HF2529, during Tuesday’s hearing. House Photo by Paul Battaglia

After weeks spent listening to citizens and officials from around the state ask for financial assistance to help pay for more than 160 projects, both large and small, the House Capital Investment Division released a $1.5 billion funding package Tuesday that would grant many of those requests.

Members received a walk-through of a delete-all amendment to HF2529, sponsored by Rep. Mary Murphy (DFL-Hermantown), the division chair.

Roads, bridges and Minnesota’s colleges and universities are among the largest appropriation recipients in the bill, which would fund capital improvement projects largely through the sale of general obligation bonds.

The Department of Transportation would receive $200 million for grants to improve local roads and bridges, while the University of Minnesota and the Minnesota State system would each receive $150 million for asset preservation and replacement.

[MOREView the spreadsheet]

Murphy said her bill is not perfect and could be changed through additions or deletions, as long as it continues to hit the division’s $1.5 billion budget target. The included provisions reflect statewide priorities, would connect Minnesotans and fix ongoing problems, she said.

A member of the audience sorts through documents as the House Capital Investment Division begins discussion of HF2529, the omnibus capital investment finance bill. Photo by Paul Battaglia

“There’s no area of the state where people live that will be totally unaffected by the projects and the contents of the [delete-all amendment],” Murphy said. “Some people will be affected a lot more than others. There are a lot of problems in some areas more than others. I think they’ve been addressed as well as we could do in the first imperfect [version of the bill].”

Rep. Dean Urdahl (R-Grove City), a former capital investment chair, offered some praise for certain provisions of the bill, but questioned its cost. 

“In a general sense, obviously there are a lot of good things that you’ve put on this bill. The key, of course is, a lot,” Urdahl said. “Yes, we may have the [debt] capacity for $3 billion, but at $1.5 [billion] this year, I sense that’s also where we are going next year, being right at the very limit of what we can do.

[WATCH House Capital Investment Division hearing on the bill]

“In light of the other things, the tax increases and expenses the state is having, it puts us, I think, in a possibly precarious position as far as our voters are concerned because obviously they have to pay for all of this.”

Some of the major appropriations in the bill include:

  • $505.7 million – Department of Transportation
  • $150 million - University of Minnesota
  • $150 million – Minnesota State
  • $133.3 million – Metropolitan Council
  • $132.4 million – Department of Employment and Economic Development
  • $124.5 million – Public Facilities Authority
  • $120.7 million – Department of Natural Resources
  • $41.7 million – Department of Corrections
  • $40 million – Department of Agriculture
  • $30 million – Minnesota Housing Finance Agency
  • $29.2 million – Department of Human Services
  • $25 million – Minnesota Zoo
  • $17.1 million – Minnesota Historical Society

The capital investment division recessed Tuesday morning, but is expected to reconvene at 5 p.m. to take public testimony on the delete-all amendment. Final action on HF2529, which has no direct Senate companion, is not expected until later in the week. 

 

A bonding year?

Republican division members have argued since session began that a large bonding bill should wait until 2020.

The Legislature often uses even-numbered years – the second of each two-year budgetary cycle – to pass large bonding bills, although that pattern has not always held in recent years.

Rep. Paul Torkelson (R-Hanska), a former capital investment chair, has told the division that members of his caucus do not believe it is “appropriate” to pass a large bonding bill this year. And Rep. Nels Pierson (R-Stewartville) has said it’s likely a number of projects were not submitted for consideration this year because of the belief that 2020 would be the year when most bonding projects are funded.

However, DFLers have argued that with interest rates near historic lows and the state’s favorable credit rating, a large bonding bill makes more sense now and waiting will only increase future costs.

House leaders initially set a target of $1.6 billion for capital investment projects when they released their 2019 budget proposal in late March. That amount exceeds the $1.3 billion recommended by Gov. Tim Walz in his 2019 capital budget proposal


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