In traditional budget year, House committee unveils $1 billion bonding proposal

It’s a legislative tradition to concentrate on bonding appropriations for the state’s infrastructure needs in even-numbered years. But the governor and House DFL leadership concur that 2021 would be a good time to borrow, based upon what they see as exceptional need and comparatively low interest-rate levels.

Whether a bonding bill will succeed this session remains to be seen, but the House Capital Investment Committee put forth its proposal at Monday’s meeting. HF337, sponsored by the committee chair, Rep. Fue Lee (DFL-Mpls), will be replaced by a delete-all amendment later this week, but those provisions were given a walk-through by nonpartisan House staff.

Public testimony is planned for Wednesday before proposed amendments and a final vote on Friday.

Meanwhile, over in the Senate, the Capital Investment Committee has met once this session, in early February. While HF337 does technically have a companion — SF287, sponsored by Sen. Tom Bakk (I-Cook) — that’s a short bill that mostly makes alterations to previously funded proposals, similar to what HF337 was before the delete-all amendment.

The proposed House omnibus capital investment bill contains $1.03 billion in bonding proposals, almost all of them funded by either appropriation or general obligation bonds, with a dash of other bonds and General Fund money.

“Since our first hearing this session, the goal of this committee was to not only craft a capital investment bill that helps our state bounce back from the hardships of the past year, but to also invest in the peoples and issues too often overlooked when it comes to capital projects,” Lee said in a statement. “This capital investment bill will take care of what we have, address the challenges we currently face, and build a better, more inclusive and sustainable future.”

[MORE: View the spreadsheet]

The largest dollar item in the bill would be $300 million in redevelopment appropriations bonds for Department of Employment and Economic Development grants to the cities of Minneapolis ($200 million) and St. Paul ($100 million). Those bonds would be earmarked for the redevelopment of areas adversely affected by civil unrest in May and June of 2020.

Another large outlay would be for the Minnesota Housing Finance Authority, which would be the target of $300 million in bonding for public housing rehabilitation and emergency shelter facilities.

Roads, bridges and rail lines are the focus of $77.5 million in bonds earmarked for the Department of Transportation, including $30 million for local bridge replacement and rehabilitation, and $25.5 million for intercity passenger rail projects.

Within the $67.7 million in general obligation bonds proposed for the Metropolitan Council, $40 million would go to the newest rapid transit bus line, the E Line from the University of Minnesota campus to Bloomington. The proposal also features $15 million for the Met Council’s grant program for mitigating inflow and infiltration, and $11.5 million for Metropolitan Regional Parks.

The Department of Natural Resources would receive funding of $53.6 million in bonds, including $27 million in asset preservation.

The largest recipient of the Department of Administration’s $52.2 million in proposed bonds would be phase two of Capitol Complex security upgrades, which would be the focus of $31 million in general obligation bonds and $12 million from the General Fund.

The Department of Human Services would receive $21 million, including $10 million for early childhood learning and child protection facilities, and $8.8 million for phase two of construction at the Minnesota Sex Offender Program facilities in St. Peter.

Also among the larger dollar totals in the bill are:

• $32 million each for asset preservation and replacement programs within the University of Minnesota and Minnesota State systems;
• $15 million for the Public Facilities Authority’s Water Infrastructure Funding Program, which would be divided evenly between drinking water and waste water projects;
• $14.3 million for Board of Water and Soil Resources conservation reserve enhancement; and
• $12.5 million for the Minnesota Zoo.

Something new to this year’s House bonding bill is an “equity article” outlining how $13.8 million in General Fund money would be distributed to 16 organizations through the Department of Employment and Economic Development. Each group is devoted to serving communities of color.

Among those, the largest projects funded through DEED would be the Leech Lake Band of Ojibwe Veterans Center ($2 million), the 30,000 Feet Black Arts Center in St. Paul ($1.5 million) and the Youth Mental Health and Wellness Center in Minneapolis ($1.2 million). The Wakan Tipi Center in St. Paul would also receive $1.2 million, its grant coming from the Metropolitan Council.

Other funding from general obligation bonds, mostly for asset preservation, would include:

• $8.5 million to the Department of Veterans Affairs;
• $8.4 million to the Department of Corrections;
• $6.2 million to DEED for Greater Minnesota child care facilities and a grant for the Lake Superior Zoo;
• $3.5 million to the Amateur Sports Commission for Mighty Ducks grants;
• $3.1 million to the Department of Education for library construction grants;
• $2.4 million to the Minnesota Historical Society;
• $1.5 million to the Perpich Center for Arts Education; and 
• $1.2 million to the Minnesota State Academies.

The bill also contains several modifications to past bonding appropriations, most related to infrastructure projects around the state.

Rep. Dean Urdahl (R-Grove City) objected, saying those items should be dealt with in a separate bill.

“We will not be supporting any bonding until we separate corrections and modifications from the bill,” Urdahl said. “Those projects being modified have already been passed. Now this is going to [the House Ways and Means Committee] and it’s going to sit there for I don’t know how long. Maybe the middle of May. Meanwhile, these projects that have already passed are just sitting there. And what happens to those projects if we don’t get a bill that passes? We are very adamant that we’ve got to get these corrections and modifications out the door and passed.”

Rep. Mary Murphy (DFL-Hermantown) defended the bill’s approach.

“One of the things we found out over the course of 2020 was that the state agencies had significant asset preservation needs that hadn’t been addressed for years,” she said. “This includes modifications in bills going back as far as 2016. There is no one bill added to another bill. This is one modifications bill, keeping state promises that have been made in the past. … This is the modifications bill for the 2020 bill.”