$2 billion bonding bill falls six votes short in House

A top priority of the 2020 legislative session will likely have to wait.

The $2 billion bonding bill, which would have funded hundreds of capital investment projects, potentially creating thousands of jobs around the state, needed 81 votes to pass when the House met in session Saturday.

It didn’t get them.

The House voted 75-58 in favor of HF2529, as amended, but that is six votes shy of the three-fifths majority it needed to pass.

Although all 75 DFL House members voted for the bill, no Republicans joined them, probably killing its chances for passage during the session, which ends Monday.

HF2529 would appropriate nearly $2.03 billion in general obligation bonds, and $495.9 million in additional appropriations, for a total of $2.52 billion. That money would have funded projects around Minnesota, ranging from water infrastructure to road and bridge repair to deferred building maintenance.

Republicans objected to the bill’s cost, with several saying it was financially irresponsible to add to the state’s budget deficit in the midst of the economic uncertainty brought on by the COVID-19 pandemic.

Rep. Mary Murphy (DFL-Hermantown), the bill sponsor, urged support during the nearly two-hour debate that preceded the vote. She said the House Capital Investment Division, which she chairs, received more than $5 billion in requests for bonding funds. Division members held 43 hearings during the  biennium and spent 17 days touring the state to see project sites for themselves.

“With over $5 billion of needs … when will we ever catch up?” Murphy said in response to calls for a smaller bill. She said the infrastructure problems around Minnesota require more help than a $750 million, or a $1 billion bonding bill can provide. “We have to be bolder than that,” she said. “And I thought we were going to be.”

But the fate of the bill became clear during remarks by Rep. Dean Urdahl (R-Grove City), not long into the debate.

The past capital investment committee chair spoke of the benefit of bonding, saying it creates jobs and serves the needs of Minnesotans. He said there are people drinking arsenic; defective wastewater systems; 60-year-old pipes under the streets; roads and bridges falling apart; a town that is cut off during floods; and buildings at the state’s colleges and universities in need of repair.

“This isn’t irresponsible spending. … It is our trust and obligation to the people,” Urdahl said. “Unfortunately, we can’t do it today.”

He thanked Murphy for her work, but said the bill spends too much money and legislative leaders need to provide a financial target he and Murphy can use to create a bill both sides can agree on.  

“This bill is higher than we on this side [of the aisle] can support,” Urdahl said. “We still have to pay for it. We need to be responsible and cognizant of that. … It is my fervent hope that an accommodation can be reached so that we can act on a bill in special session. Or tomorrow.”

House Minority Leader Kurt Daudt (R-Crown) indicated such a deal will eventually be reached. After criticizing the DFL for a bill the state could not afford and was “never” going to pass, he said members could pass the bill during an expected special session.

“I think everybody knows we’re going to be back here in three weeks, so it’s not the end of the world,” Daudt said. “And there will be a bonding bill, there absolutely will be. It won’t be this one, but there will be a bonding bill passed in this state.”

But House Majority Leader Ryan Winkler (DFL-Golden Valley) said everyone needs to participate in the process if a bonding bill is to pass. He said House Republicans had underfunded the state’s capital improvements for years and that public assets are crumbling.

“Investments have been neglected, leaving problems for someone else to solve,” Winkler said. “We need to fix your neglect. That is why we are bringing this bill forward. We have critical needs for communities all around the state.”

[MORE: A full list of the appropriations and projects.]

Winkler said the bonding bill is historically large because the state has reached a historically dangerous moment in its history, due to the pandemic, and the bill is one of the roads to recovery.

“This is one of the best tools that we as a state have to create jobs and build a better long-term future for our people.”

The Senate unveiled its bonding proposal Saturday morning: $998 million in general obligation bonds, plus $400 million for trunk highway bonds.

These are the 10 largest funding areas in HF2959:

Transportation

Improvements to the state’s transportation system would receive the largest appropriation, with nearly $453 million directed to a host of projects throughout the state. Local road improvement projects and local bridge improvement projects would each receive $53.2 million.

Specific projects that would receive large appropriations include $55 million to replace the Third Street/Kellogg Blvd. bridge in St. Paul and $52 million for rail grade separation improvements in Moorhead.

Higher education

Officials from the University of Minnesota and the Minnesota State system have repeatedly testified about the billions of dollars they need to catch up on the maintenance projects at their facilities that have been deferred due to funding shortfalls. The bill would take a step toward addressing that backlog by appropriating $425 million.

The Minnesota State system would receive $263.7 million, with $142.5 million designated to the general category of “Higher Education Asset Preservation and Replacement projects,” and the rest directed to more than a dozen specific projects. The University of Minnesota would receive $161.9 million, with $125 million for HEAPR and most of the remaining money, $29.2 million, to replace a building for the Institute of Child Development on the Minneapolis campus.

Water infrastructure

Some of the state’s aging wastewater treatment facilities and systems would receive a boost as the Public Facilities Authority, which provides financing and technical assistance to communities, would receive $327.2 million. Nearly 30 cities and townships would receive grants, including Austin – $19 million for improvements to its wastewater facility; Bemidji – $12.3 million for its wastewater treatment plant; and Silver Creek Township - $12 million for wastewater improvements.

DEED grants

The Department of Employment and Economic Development would receive $203.4 million for dozens of grants that would go to local units of government and nonprofits for projects that range from an outdoor performance venue in Minneapolis ($20 million) to an amphitheater in New Ulm ($300,000).

Department of Natural Resources

Asset preservation ($65 million) is the single largest appropriation for the DNR, which would receive $201.6 million. Another $20 million would go to flood hazard mitigation grants, the same amount that would be allocated to dam safety repair, reconstruction or removal projects. Several cities would also receive grants, including $11.4 million for riverbank restoration in Mankato.

Met Council

The Metropolitan Council would receive $128.4 million, with $55 million going to its Busway Capital Improvement Program, $10 million for regional parks and trails, and the bulk of the remaining money devoted to grants for cities and counties in the metro area.

DHS

The two biggest expenditures in the $75.8 million for the Department of Human Services are $15 million for asset preservation and $18.3 million to design, renovate, furnish and equip the next phase of improvements for the state’s sex offender program at the St. Peter Regional Treatment Center.

Corrections

Almost half of the $66.3 million appropriation the Department of Corrections would be targeted for asset preservation, while the department’s bus garage and a building renovation at the Faribault facility would each also receive more than $7 million.

Public safety

A new state emergency operations center, at a cost of $29.5 million, would account for more than half of the $54.8 million appropriation for the Department of Public Safety, followed by $10.4 million for the city of Virginia to build a regional training facility for fire, police and emergency services personnel.

PCA

The Pollution Control Agency would receive $53.6 million in general obligation bonds. But it will also receive $22.9 million in appropriation bonds, to help clean Superfund sites in Esko, Duluth, Perham and Minneapolis.

Major appropriations in the bill include:

• $452.9 million – Department of Transportation
• $327.2 million – Public Facilities Authority
• $263.7 million – Minnesota State
• $203.4 million – Department of Employment and Economic Development
• $201.6 million – Department of Natural Resources
• $161.9 million – University of Minnesota
• $128.4 million – Metropolitan Council
• $75.8 million – Department of Human Services
• $66.3 million – Department of Corrections
• $54.8 million – Department of Public Safety
• $53.6 million – Pollution Control Agency
• $48 million – Housing Finance Authority
• $44.9 million – Board of Water and Soil Resources
• $40 million – Rural Finance Authority
• $25.1 million – Department of Administration
• $25 million – Minnesota Zoo
• $21.9 million – Department of Military Affairs
• $17.7 million – Minnesota State Academies
• $14.6 million – Department of Veterans Affairs
• $8.4 million – Amateur Sports Commission
• $5.3 million – Historical Society
• $3.1 million – Perpich Center for Arts Education
• $3.01 million – Department of Education