Breaking down the Legislature's $1.2 billion bonding bill

A detailed accounting of the Minnesota Legislature’s $1.2 billion bonding bill to fund infrastructure projects across the state was only revealed hours before the Sunday, May 17, midnight deadline.

The legislation, which arose out of behind-closed-doors negotiations last week between legislative leaders and Gov. Tim Walz’s office, required three-fifths of the votes in both the House and Senate to pass. Even in an otherwise bitterly divided Legislature the package had no problem clearing the high bar late Sunday, when lawmakers passed it by a 122-11 margin in the House and a 50-7 margin in the Senate.

Rep. Mary Franson, R-Alexandria, and other capital investment leaders applauded the passage, calling it a win for Minnesotans.

“This is not a Republican bill; it is not a Democrat bill,” Franson said. “It is a bill that benefits the entire state of Minnesota.”

Here’s what made it into the bill and what lawmakers and others had to say about it Sunday.

What stands out most in the Minnesota bonding bill?

The biggest chunk of funding will go to water infrastructure, a massive need around the state. Roughly one-third of the bill, $420 million, will help local governments build or upgrade wastewater and drinking water plants.

That includes at least $272 million in earmarks to local government projects. The rest will flow through state agencies before going to local projects deemed worthy and ready on priority lists.

Sen. Sandra Pappas, DFL-St. Paul, chair of the Senate’s Capital Investment Committee, estimated there was a 55-45 split between bonding money going to state agencies and earmarks in the overall bill. This was a stark contrast to last year’s bonding bill featuring no earmarks, said Pappas, who is retiring after this session.

How big are these earmarks? 

Game changers for communities trying to address water issues. Getting bonding funding, which comes from debt sold by the state, keeps utility costs from spiking.

Here are some of the biggest water earmarks in the bill:

• $17.5 million to Hastings to treat PFAS and nitrates
• $13.2 million to Rochester for sewer and water work
• $13 million to St. Paul for a West Seventh Street utility project
• $12.4 million to Minneapolis for water main work
• $12 million to the North Zumbro Sanitary Sewer for a wastewater project

Although some of the most expensive projects are in the Twin Cities metro area, most of the earmarks are going to Greater Minnesota cities. Big Lake, Eagle Lake, Grand Marais, Spicer and Winona are among at least 45 outstate local government entities receiving portions. They’ll split about 58% of the earmarks for water.

What else is getting funding?

Asset preservation, transportation projects and building construction or renovation make up the next largest chunks within the $1.2 billion.

About $247 million goes to asset preservation, with higher education systems receiving sizable shares. Minnesota State’s public universities and colleges will get a combined $65 million, while the University of Minnesota is getting $40 million.

Transportation, meanwhile, adds up to about $176 million in funding. Like water funding, the total is split between state programs and earmarks, including:

• $9.6 million to Washington County for roadwork
• $6.5 million to Karlstad for a municipal airport project
• $6 million to Dakota County for County Road 50 improvements
• $6 million to Freeport for an I-94 interchange project
• $5.6 million to Olmsted County for an interchange project

Investments like these in the bonding bill represent construction jobs and economic activity coming to local communities, said Laura Ziegler, director of government affairs for the Association of General Contractors.

“We know that when the state makes those investments we’ll see the return on investment,” she said. “A strong bonding bill really does deliver that economic activity in every corner of the state.”

The Department of Employment and Economic Development is slated to receive about $135 million, including yet more earmarks for buildings in Greater Minnesota. Breckenridge, for example, is getting $3 million for a recreational and wellness facility.

Infrastructure includes airports, giving Mankato and Duluth access to bonding money for air traffic control towers. In northwest Minnesota, Karlstad received $6.5 million for a municipal airport project.

One state program, the Greater Minnesota Business Development Public Infrastructure (BDPI) Grant, earned a modest $2 million, which wasn’t to Sen. John Jasinski’s liking. The Waseca Republican is perhaps the program’s biggest legislative champion, seeing it as a key tool for economic growth.

“The bill is good, don't get me wrong, just always my concern is BDPI is a huge project for Greater Minnesota and that dollar amount is very low,” he said.

Jasinski was happier about securing a one-year reduction in license tab fees. Republicans acknowledged using Minnesota bonding bill votes as leverage in order to get a $254 million fee reduction.

What didn’t come through in the Minnesota bonding bill?

There are always far more requests for bonding funds than there is money available. Many local leaders woke up Monday to find out their project didn’t make the cut this session.

Bradley Peterson, who as executive director of the Coalition of Greater Minnesota Cities has been pushing for lead pipe replacement funding all session, was disappointed to see that figure come in lower than he hoped. Lawmakers approved $15 million for it, compared with a $100 million request to keep the state’s lead removal goals on track.

“There are folks in the Legislature who are committed to getting as much as possible, but when you’re negotiating between four different caucuses and the governor’s office, everyone has different priorities,” Peterson said.

Franson, speaking on the House floor, said she wants lawmakers to establish a set fund to keep up on water issues in future sessions.

“We need to seriously think about dedicated funding to fix our water infrastructure and get money into removing the lead pipes from around the state, and I know that we can get it done if the political will is there,” she said.

This article first appeared on MinnPost and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.