Minnesota House passes $1.9 billion bonding package, path forward is unclear
The Minnesota House on Monday passed a $1.9 billion capital investment package, but its path forward at the Capitol came into question after Senate Republicans said they’d block it unless Democrats also get behind tax cuts.
Historically, lawmakers pass a capital investment bill — known as a bonding bill — at the Capitol every other year. But gridlock doomed efforts to get one across the finish line in 2021 and 2022.
Now, DFL leaders at the Capitol say they need to act quickly to make up for lost time and get construction projects around the state off the ground.
“Hundreds of critical infrastructure projects have gone on for too long, it's been almost three years since October 2020, that we actually have a bonding bill for the entire state,” House Capital Investment Committee Chair Fue Lee, DFL-Minneapolis, said. “And it is time for us to start addressing some of the critical access infrastructures that we have.”
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The two bills passed by the House authorize the state to borrow $1.5 billion and put up $393 million in cash to pay for wastewater treatment centers, bridge repairs, college and university building projects and more. And Democrats said the package would be the first of two installments that they hope to pass this year.
Both passed the House Monday evening with broad bipartisan support.
But even before the bill came up for a vote, Senate Republicans threatened to put a wrench in that plan.
With a giant budget surplus, the state should prioritize sending money back to Minnesotans, Senate Republicans said. GOP leaders in that chamber said they would block the bills unless Democrats put forward proposals to cut taxes.
“That bill is going to be dead on arrival because we believe that we need to see some tax cuts tied to that,” Senate Minority Leader Mark Johnson, R-East Grand Forks, told reporters. “This is our leverage, we can have those negotiations and discussions. But that's very, very critical to have assurance that those issues will get done.”
It takes a three-fifths majority vote to issue state general obligation bonds, so Democrats need to win over some Republicans in each chamber to pass bonding proposals. But DFL leaders said they’d turn to a cash-only bill if they can’t get GOP lawmakers to agree.
“If we are not able to get this bill all the way to the governor's desk we are at the point in session … where we have to start putting together the 2023 bonding bill which I've referred to as the ‘with or without you’ bill,” House Speaker Melissa Hortman, DFL-Brooklyn Park, said. “We would really like to do that with Republicans but, at the end of the day, it's not acceptable to Minnesotans to go this long without another bonding bill.”
Some Republicans in the House said the state should pursue that option, since the state has a $17.5 billion projected budget surplus.
“Despite the fact that we have this historic, record-setting surplus, what we have before us today is a bill that will waste hundreds of millions of dollars in interest payments on debt, unneeded debt,” Rep. Pat Garofalo, R-Farmington, said.
Democrats in the chamber said they’d prefer to borrow to fund some of the projects to spread out the expense over time.
Senate Majority Leader Kari Dziedzic, DFL-Minneapolis, and Senate Capital Investment Committee Chair Sandy Pappas, DFL-St. Paul, said tax cuts are being considered in the Senate. But they said conversations around taxes and bonding shouldn’t be tied together.
And they said lawmakers should move quickly to approve the bonding package so that projects could get underway.
“We didn't do a bill in 2021. We didn't do a bill in 2022. We're about $6 billion behind in infrastructure and so it's really, really important and their communities are asking for this bill,” Pappas said. “I don't understand how they cannot be more responsive to what their communities need.”