Walz pitches $1.3B construction plan heavy on housing, higher ed

Gov. Tim Walz presented first state budget
Gov. Tim Walz responded to questions about his proposed biennial budget on Feb. 19. Walz on Tuesday proposed a $1.27 billion package of public construction projects that he said would preserve state assets and make smart investments for the future.
Tim Nelson | MPR News

Updated: 3 p.m. | Posted: 1:37 p.m.

DFL Gov. Tim Walz on Tuesday proposed a $1.27 billion package of public construction projects that he said would preserve state assets and make smart investments for the future.

The plan is heavy on transportation, including rail safety improvements throughout the state. It also funds projects for higher education campuses, correctional facilities and affordable housing — a key policy issue for the new governor.

Walz used the Fort Snelling Upper Post, a housing facility for formerly homeless veterans, as the backdrop to announce his bonding plan Tuesday.

After meeting privately with some of the residents, Walz said affordable housing is a problem throughout the state and a priority in his proposal.

"Our capital budget directs $150 million to the preservation of existing affordable housing and to create new homes for Minnesotans, across all income levels, in all areas of the state," he said.

The biggest slice of the Walz bonding pie is $345 million for transportation, including $64 million for rail safety projects. He wants $300 million for projects on college campuses and $57 million in the category of public safety and corrections.

Walz said $20 million would help the Department of Corrections work on a massive backlog of deferred maintenance and correct safety hazards.

"We have corrections facilities where an entire cell block is opened by pulling a lever, a handle. This is 2019. This is not Shawshank," he said, an apparent reference to the grim prison portrayed in the 1994 film "Shawshank Redemption."

"This is not some movie," he added. "This is real life where people deserve to be safe in their workplace."

Walz contends that his nearly $1.3 billion plan is fiscally responsible and well within the state's borrowing capacity. He said it would be irresponsible not to make needed repairs on public facilities. Twenty-two percent of the projects are in Greater Minnesota and 27 percent are in the metro area. The rest are considered projects of statewide impact.

Walz plans to travel the state to sell his plan. He'll also need to convince Republicans who are likely to oppose it in its current form.

"I'm not laying these out as nice to have things," Walz said. "I'm going to make the case that this is not a wish list to me. This is what's needed."

Sen. Dave Senjem, R-Rochester, the chair of the capital investment committee, said the Walz plan is too big and is unlikely to pass this year. But Senjem said a much smaller bill might have a chance.

"We certainly will do a bonding bill, in my view, over the course of the next two years. Whether we get one this high at this point in time, I'm doubtful on that. But as far as I know we have money for a $265 million bonding bill this year in terms of the forecast, the financial forecast. That's probably what we'll do."

Despite lawmakers' traditional bonding bill focus in even-years of the session, Minnesota Management and Budget Commissioner Myron Frans noted that there have been bonding bills passed in all but two of the past 30 years.

Senjem noted that his committee did not tour any bonding request locations and has yet to meet this year.

The capital investment committee in the DFL House has been meeting.

House Speaker Melissa Hortman said she sees it as a responsibility to pass a large construction package this session.

"The cost of interest is lower than the cost of inflation on those projects. So, we can do more by borrowing and investing right now. And we're well below the national average in debt per capita," she said. "So, it's a really responsible thing to do, especially as economists are telling us that the economy is going to slow down."

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