ST. PAUL — Just months after the state approved a historically large infrastructure investment bill, Minnesota Gov. Tim Walz on Monday, Feb. 22, proposed the Legislature pass an additional $518 million in bonding.
Walz’s proposal deviates from the Minnesota Capitol’s norm: Typically, the state Legislature passes their biennial budget in odd-numbered years, and saves what they call their bonding bill for even-numbered years. Just a handful of months after lawmakers passed 2020’s $1.9 billion bonding bill, Walz is proposing the state take advantage of still-low interest rates and stimulate jobs in the struggling pandemic economy.
“By maintaining existing assets, we can keep our state’s infrastructure strong and reliable for generations to come,” Walz said in a written statement Monday. “What’s more, we can create jobs that boost our economy in the process.”
It took lawmakers months longer than usual to pass their bonding bill last year, with debate stretching until October before the nation’s only divided Legislature settled on $1.9 billion — below Walz’s target of $2.03 billion proposed in January 2020.
The $518 million proposal includes $240 million in general obligation bonds, $250 million in appropriation bonds and $23.8 million in general fund cash. Nearly half of the package would go toward asset preservation for higher education and state agencies, and parts of the package would fund repairs for damage in the Twin Cities due to last summer’s civil unrest, as well as housing needs.
At a Monday afternoon news conference, Walz equated capital investment to upkeep on a house. Over the years he and his family lived in their house in Mankato, he said, they replaced windows and the roof, redid the driveway and installed a new furnace.
“All those things cost money, but when I sold that house last year, the price had doubled,” he said. “It was the single best and biggest investment. All at the time, it’s where my family lived, it’s where my children were raised and it improved the quality of life.”
Walz’s proposal drew a range of reactions from lawmakers and stakeholders on Monday. In the Democratic-controlled House, state Capital Investment Committee Chair and Rep. Fue Lee, D-Minneapolis, said the plan “puts Minnesota on the right track when it comes to creating new jobs, investing in our communities and keeping a focus on inclusion and equity.”
“With low interest rates, Minnesota’s AAA bond rating and a great need to help our state bounce back from the economic impact of COVID-19, there’s no reason Minnesota shouldn’t have a robust jobs and local projects bill this year,” he said.
The Republican-controlled Senate appeared more reluctant. Former Democrat, now Independent Sen. Tom Bakk, I-Cook, who chairs the Senate’s capital investment committee, pointed to last year’s “largest bonding bill in state history” as a success and “crucial investment.” But this year, he said the priorities are passing a constitutionally required state budget, as well as responding to the pandemic.
“At the appropriate time, I am hopeful the Legislature and the governor will again come together to produce a bonding bill focused on the critical needs of Minnesotans,” he said.
Greg Zylka, president of the Coalition of Greater Minnesota Cities and mayor of Little Falls, in a Monday statement appeared eager to see more capital investment, but said Walz missed an opportunity to invest more in water infrastructure, “which remains one the most pressing needs across Greater Minnesota.”
“The 2020 bonding bill included record funding for state grant and loan programs that help cities pay for costly wastewater, drinking water and stormwater projects, but the need continues to grow,” he said. “The Legislature must continue to make significant investments in water infrastructure to keep up with this growing need.”
The Laborers’ International Union of North America (LIUNA) in a Monday statement applauded Walz’s supplemental proposal, calling it “a meaningful investment in workers and communities all across the state during the pandemic and economic crisis.”
LIUNA Minnesota and North Dakota President Joel Smith said, “The workers and communities who have sacrificed the most need the living wage jobs that this plan will create to recover and thrive for years to come.”