Minnesota Democrats on Friday put up a $1.3 billion cash-only capital investment bill that they can pass through the Legislature without Republican backing.
Typically lawmakers agree to allow the state to sell bonds — or take on debt — to fund infrastructure projects. That requires three-fifths support in either chamber, so lawmakers in the minority have unique leverage.
But with a little more than a week left in the legislative session and negotiations with Senate Republicans still in limbo, DFLers said they would move forward the proposal that wouldn’t require GOP votes to pass.
“Although I'm hopeful negotiations continue, we only have a week till the end of session,” Senate Capital Investment Chair Sandy Pappas, DFL-St. Paul, said. “We have to move on. So we have before you today, a pretty bare bones bill.”
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While bonding bills are traditionally passed every other year, lawmakers haven’t approved one since 2020. And heading into the legislative session, state agencies and local governments submitted nearly $6 billion worth of proposed projects.
The House of Representatives earlier this year approved a $2.1 billion bonding package but it fell short in the Senate because Republicans withheld support. And this week, the Senate GOP maintained that they would not support that package unless DFLers agreed to put more money toward tax rebates, nursing homes and projects in Republican districts. Seven Senate Republicans would need to vote with Democrats to pass a bonding bill.
House Speaker Melissa Hortman, DFL-Brooklyn Park, told reporters Thursday that DFLers would prefer to use bonds to fund the projects. But she said because DFLers and Senate Republicans couldn’t reach an accord, Democrats would move forward without them.
“For bonding, we'll be able to do a lot more if Republicans participate,” Hortman said. “It's really not the best way to do projects that last 30 years or more. The most logical way to do those is through general obligation bonds. But we've seen Republicans hold these projects hostage for years and years and years. And it's really ridiculous to play political games with wastewater treatment, and safe roads and safe bridges.”
Hortman said the Legislature would plan to pass another $1 billion capital investment bill next year if the Legislature moves the $1.3 billion cash only bill this year.
Pappas said during a Friday joint capital investment conference committee that the new proposal was negotiated with the governor’s office and would prioritize projects in districts of lawmakers who agreed to support the bill. So it included fewer projects in Republican districts.
GOP lawmakers on the conference committee said they were still open to negotiating the capital investment bill that included bonding. But they said they were frustrated that Democrats wouldn’t agree to more tax relief first.
“This kind of feels like a little bit of retaliation, like, ‘You Senate Republicans aren't going to agree to what we want, so we're just gonna go all cash and we don't need any of you. We're going to ignore 50 percent of the state and do what we want and fund all of our DFL projects and all of our DFL districts and to heck with you Republicans,’” Sen. Karin Housley, R-Stillwater, said. Housley is the Republican lead on the Senate Capital Investment Committee.
House Capital Investment Committee Chair Fue Lee, DFL-Minneapolis, said Democrats remained open to the larger bonding package and urged Senate Republicans to come to the table.
“It's been two months and all along the offers that have been brought forward are tied to issue items that are outside of the capital investment world,” Lee said. “And so just wanted to be clear that our offer from the House majority has been to pass a clean bill, and then we can have a conversation about how we are going to spend the cash target that was allocated to the Capital Investment Committee,” Lee said.
State agencies, local communities and labor unions have implored lawmakers to pass a capital investment bill this year to make a dent in the backlog of construction and maintenance projects around the state that can’t move forward without state funding.