Road fixes, wastewater upgrades and more: Walz signs $2.6 billion capital investment bills

Gov. Walz at a podium outside with a crowd behind him
Minnesota Gov. Tim Walz, joined by supporters, signed bills authorizing the largest bonding bill in state history in Minneapolis on Thursday.
Dana Ferguson | MPR News

Gov. Tim Walz on Thursday signed into law a $2.6 billion capital investment package, teeing up dozens of construction and repair projects around the state.

That means local governments, community organizations, public colleges and university campuses, as well as Minnesota agencies will see construction crews break ground around the state as soon as this summer.

As part of an end-of-session deal, DFL and GOP leaders at the Capitol agreed to the capital investment package, which includes cash along with general obligation bonds — or debt — plus a $300 million emergency aid bill for nursing homes.

Combined, the two capital investment laws create the largest one-time boost to capital infrastructure funding in the state’s history. And DFL leaders said that was important since lawmakers hadn’t passed a capital investment bill, known at the Capitol as a bonding bill, since 2020. Typically, lawmakers pass one every other year.

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“This is truly the golden age of infrastructure construction across the state,” Walz said during a signing ceremony under the Hennepin Avenue Bridge. “This commitment on one of the basic functions of government is to help fund and build infrastructure across the state in all corners of the state.”

Ahead of the 2023 legislative session, capital investment committees received proposals for projects that totaled more than $5 billion.

Capital investment committee chairs said they gave preference to projects that were “shovel-ready” and that were included in a bonding bill that didn’t come together before the end of the legislative session last year. And at least one — the Fraser Chemistry Hall project at the University of Minnesota — is expected to break ground next week.

The new laws will let the state take on debt to fund wastewater, road and bridge and public facilities repair projects. And DFL leaders said they aimed to spread funding across Minnesota.

“This really is a great deal for rural Minnesota,” said Senate Capital Investment Committee Chair Sandy Pappas, DFL-Saint Paul. “A bonding bill has always been heavily for rural Minnesota and when you look at wastewater treatment, when you look at DNR, when you look at local roads and bridges, those are all very important for us to fund and we did it.”

They also included in the package plans to rehabilitate or repair state and local government buildings, demolish old ones and build new police and fire stations, libraries and parks. 

The state is set to move its State Emergency Operations Center from St. Paul to the suburbs, boost funding for Capitol complex security improvements and send out grant funding to a broad swath of nonprofit organizations.

The bill’s authors also noted that the plan will send out more funds to organizations that serve Indigenous and communities of color and green light construction projects in those areas.

“Our bill makes investments in equity, racial equity projects, communities that have often been left behind by the state of Minnesota,” said House Capital Investment Committee Chair Fue Lee, DFL-Minneapolis. “Not only did we make investment into north Minneapolis with the V3 Sports projects, we also make investments in paying back our tribal governments.”

Bonding bills are unique because they require a 60 percent threshold in each chamber to pass. And that meant Republicans had to cast votes in support of the bills in the House and Senate.

While House Republicans supported the bills early on in session, Senate Republicans said throughout much of the legislative session that they would only support the plan if it came after lawmakers approved tax relief for Minnesotans.

In the final days of session, GOP leaders said they switched their tack to try to get additional aid for nursing homes struggling with inflation and worker shortages. They also voiced frustration about the final product.

“I'm glad that we came to an agreement and we're able to get things for Minnesotans,” Senate Minority Leader Mark Johnson, R-East Grand Forks, said at the time, “But it really seems to be if you're a bureaucracy, government, or a nonprofit in the state, you're doing really well. But Minnesotans really took the back seat in this session.”

But there were other GOP lawmakers, particularly in the House, who supported the proposal’s passage this year.

“This is a perfect example of what can happen in state government when people decide, regardless of party or where you live in the state, that you should get together and try to do what's right for the state of Minnesota,” said Republican Rep. Dean Urdahl, of Grove City.

Local government leaders, labor unions and others in the wake of the bill’s passage said it would create new construction jobs around the state and address needs that had fallen by the wayside or spurred property tax hikes.

“Our state will see record investment in infrastructure, which will position Minnesota for the future and put thousands of construction workers to work all across our state,” said Minnesota Building and Construction Trades Council President Dan McConnell.