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Faced with critical needs but a relatively small pool of money to address them, Minnesota lawmakers are mulling creative outlets to spread the love — and resources — around.

Legislative leaders agree on some must-tackle items this session. That includes new funding for safety net hospital HCMC and a pipeline to upgrade aging computer software counties use to provide healthcare and other public services.

With a narrowly-split Legislature and differing views about whether to extend or raise taxes, some have proposed leveraging a state public construction projects bill — or asking Minnesota voters to grant them the authority to make that move later on.

As part of their capital investment discussions, House and Senate members are considering sending money to counties to fund upgrades to the decades-old IT systems they use to provide essential services to needy Minnesotans. 

Bonding bills typically include state and local government projects like building repairs, road and bridge improvements and wastewater treatment plant upgrades. House Capital Investment Committee Co-Chair Fue Lee, DFL-Minneapolis, said this year they’re considering bringing in the county technology and HCMC proposals as part of that bonding package.

“This is just an additional tool for us to consider spending for not just IT or emergency shelters, but even for HCMC,” Lee said.

HCMC is a trauma center and teaching hospital that treats patients from around the state. Hospital officials have made staffing cuts and reduced bed capacity as the center projected significant operating losses fueled predominantly by uncompensated care. Without a funding intervention, the hospital could close.

Lawmakers are mulling increasing a Hennepin County sales tax or repurposing a surcharge on hospitals to send money to HCMC. In the Senate, Democrats have put forward $150 million for the hospital, along with more than $100 million for other health care providers.

If those proposals can’t pick up bipartisan support, Lee said lawmakers could turn to a capital investment option instead.

“If we are not able to get this sales tax extension, then could we look at doing appropriation bonds, possibly to help with some of the capital needs of HCMC,” Lee told MPR News.

The state sells bonds to cover the cost of public construction projects. Typically, they turn to general obligation bonds to fund projects. Those require support of 60 percent of lawmakers in each chamber to pass and they come with stricter parameters on how they can be used.

Lee said another option would be to sell appropriation bonds for the county technology and HCMC. It would be an easier lift to pass — the proposals only require a simple majority in each chamber — and the bonds can be used to fund a broader set of needs as long as they’re deemed to serve a public purpose.

The Senate Capital Investment Committee is scheduled to discuss a proposal Tuesday that would direct $10 million a year toward county IT upgrades over the next decade. They’ll also consider a constitutional amendment that would spell out in Minnesota’s Constitution that the state could sell general obligation bonds for such projects in the future. Voters would decide on that in November if the measure passes both chambers of the Legislature.

House Speaker Lisa Demuth, R-Cold Spring, said that as legislative leaders chart an end-of-session plan they’ve not discussed funding HCMC or county computer upgrades in the capital investment bill. But she said she’s not ruling it out.

“I would say there's nothing off the table that could be used,” Demuth said.

House DFL Leader Zack Stephenson, DFL-Coon Rapids, agreed that leaders are considering various funding avenues.

“I think several options are on the table about how to do that,” Stephenson said. “There's also a big question about how big the need is. But the biggest thing is, how do you pay for it and how do you fit into the broader budget puzzle?” 

House Capital Investment Committee Co-Chair Mary Franson, R-Alexandria, declined an interview for this story. But she told the panel last week that they face tough decisions putting together a bonding package. Legislative leaders and the governor are considering how much a total package will cost. State agencies and local governments have put up nearly $7 billion in requests.

“There's difficult decisions that have to be made, and not everybody is going to be happy when that bonding bill comes out,” Franson said. “And that's probably the hardest thing – is that disappointment and knowing that there are communities out there that have crumbling infrastructure and dirty water and they may not get anything out of the bonding bill.”

Senate Majority Leader Erin Murphy, DFL-St. Paul, said she hopes to have a conversation soon about the public projects bill. But she doesn’t want HCMC or county technology projects to get lumped into the politically tricky conversation about what goes into a bonding bill.

“There's a real demand for bonding, for capital investment, on a long list of projects, and moving those issues into that pile,” Murphy said last week. “I think that makes that debate even harder and that negotiation even harder.”

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Leaders at the Capitol agree on the top priorities they need to tackle this year: Getting funding to HCMC and counties, combatting fraud and approving a slate of local construction projects. But with relatively little money to go around, they’re weighing options to cover as much as they can.

Short on cash, Minnesota lawmakers search for new ways to pay for priorities

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