By Rep. Dean Urdahl
We face a projected $6.2 billion budget shortfall in the upcoming two-year budget cycle, so borrowing money to fund projects is a delicate matter.
First, we need to have a discussion regarding the definition of “capital investment.” We also should educate ourselves on the history of bonding and look to the standards that have been established by former state leaders. Furthermore, if the vote is to borrow more, we must place priority on projects that will serve as true capital-investment tools with tangible long-term benefits. We can support necessary funding for priorities like flood relief or public safety, but projects with little or no net value to the state should be shelved.
One way we can determine the value of bonding proposals is by conducting a return-on-investment analysis. A bill is being drafted in the Legislature this session to make that analysis a standardized part of the process. Computer programs make it a matter of plugging numbers into a formula to produce return-on-investment projections.
Gov. Mark Dayton recently proposed borrowing $1 billion to fund projects across the state and this return-on-investment analysis would help bring some transparency to the process. This system wouldn't accurately measure the value of all projects and the idea isn’t to set up qualification standards, per se. The idea is to have another tool at our disposal to help make the best use of our tax dollars.
It is important to spend some money on things like maintaining our key infrastructure even during economic downturns. But, remember, we already are working to erase a $6.2 billion budget shortfall. Higher taxes and irresponsible borrowing will not solve our structural budget challenges, so we are best served focusing on our priorities like revitalizing the small-business climate and helping people get back to work.
Interestingly, Minnesota already has approximately $2.6 billion in authorized, but unissued general-obligation bonds. It would be good to know what the hang-up is with those projects as we consider our budget. For all the talk about shovel-ready projects in recent years, it appears as if we’re a few shovels short.
Your input on this issue and others is greatly appreciated. I soon will be conducting a legislative survey to gather the opinions of local citizens. I also plan to schedule local town hall meetings so we can engage in face-to-face discussions. I'll pass along more information on those items when the details are in place.
Dean Urdahl represents District 18B in the Minnesota House of Representatives. The district includes most of Meeker County and a portion of Wright County. This is Urdahl’s fifth term in the Legislature after being elected in 2002, 2004, 2006, 2008 and 2010.