The No. 1 job for Gov. Tim Walz and the Minnesota Legislature this year is to borrow hundreds of millions of dollars to pay for building construction projects and purchasing land. In government circles, the vehicle for raising that money is known as a bonding bill.
Walz says most Minnesotans don’t know what bonding is, so he calls the proposal he rolled out last month the “local jobs and projects plan.” It’s a big one.
The Democratic-Farmer-Labor governor proposed borrowing a record $2 billion for projects across the state ranging from affordable housing and sewer and water systems to college classrooms and local roads and bridges.
Citing a backlog of funding requests from state agencies and local governments, his fellow Democrats who control the House want to spend even more, while leaders of the Senate Republican majority say they’re reluctant to pay out half as much as the governor has requested.
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Recent legislatures have authorized borrowing around $1 billion every two years for public works projects. Walz said he’s asking for a “historic number because the need is historic.”
Cities, counties and state agencies asked for a record $5.3 billion for buildings and lands this year. Why? Largely because they haven’t maintained the stuff they already own, and it’s wearing out. In government jargon, fixing those things is called “asset preservation.”
Walz broke down his proposal into four broad areas:
- Public safety and local roads and bridges. He requested $673 million for projects such as police and fire stations, National Guard armories, city streets and county roads. None of that money would go for state highways.
- State colleges and universities. The governor proposed $447 million to repair and upgrade aging college labs and classrooms, create new spaces for expanding programs, fix heating and cooling systems and improve energy efficiency. Not many glitzy new projects there, he said.
- Clean water. Walz penciled in $300 million to help communities struggling to pay for upgrading aging water and sewer systems. “Every Minnesotan deserves clean, safe water,” he said. But a lot of cities, particularly smaller ones in Greater Minnesota, can’t afford needed improvements.
- Affordable housing. The governor is seeking $276 million to subsidize a wide range of housing options, including homes for seniors, families, veterans, new home buyers and the homeless. The state faces a shortage of affordable housing, he said, and “every Minnesotan deserves a safe and affordable place to call home.”
In addition, he called for more than $500 million in grants to cities and counties for town halls, libraries, recycling facilities, parks, trails and other local projects.
Most public works projects would be paid for with money from the sale of general obligation bonds — hence the name bonding bill — that would be repaid, with interest, to investors with revenue from state income, sales and other general taxes.
The Minnesota Constitution requires a 60 percent “supermajority” vote of each house of the Legislature to increase the state’s debt. So the 75-member DFL majority in the House will need at least six Republican votes to pass a bonding bill, and the 35 Republican senators must round up at least six DFL votes for passage in that chamber.