ST. PAUL — Members of the Minnesota House passed $1.9 billion in capital investment bills Monday, March 6, despite Senate Republicans saying they’d block any public works borrowing proposal unless the House also passed tax cuts.
It’s been more than two years since the Legislature passed a bonding bill, a major public works borrowing proposal that helps fund projects like water treatment plants and roadwork across the state.
Representatives approved two bills Monday night: A bill to borrow about $1.5 billion and a bill to use $392 million from the historic $17.5 billion budget surplus for projects across the state. Rep. Fue Lee, chair of the House Capital Investment Committee and chief author of the bills, said earlier on Monday said the investment proposal is based on the framework Democratic-Farmer-Labor and Republican lawmakers came to an agreement on last session and that the spending is long overdue.
“Together, this unfinished work of 2022 focuses largely on investments to help local communities throughout the state to grow and to thrive,” said Lee, a Minneapolis Democrat. “Hundreds of critical infrastructure projects have gone unfunded for too long.”
The $1.5 billion in borrowing passed 91-43. The direct spending passed 98-36.
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Bonding bills require a three-fifths supermajority to pass, and in an unproductive 2022 legislative session marked by gridlock between the DFL governor and House and the Republican-majority Senate, no capital investment bill was signed — even after lawmakers reached an agreement on more than $1 billion in spending and borrowing.
While DFLers now have majorities in both chambers, they need the support of some Republicans to get bonding bills across the finish line. In the House, the 70-64 DFL majority needed 11 Republicans to join in supporting the $1.5 billion in borrowing. The nearly $400 million in general fund spending only required a simple majority to pass.
Republicans who opposed the borrowing bill argued the state should not be borrowing more than a billion dollars when the state has a giant surplus. Rep. Pat Garofalo, R-Farmington, pointed out that the state would have to pay interest on bonding projects.
"There is no reason for the state of Minnesota to be borrowing money today when we have $17.5 billion in the state's coffers," he said ahead of the vote. "The only financially responsible position on this bill today is to vote no."
But supporters said borrowing spreads the cost out over time on projects that will benefit people decades into the future and help avoid future inflation on construction costs.
Much of the borrowing in the bonding bill is for statewide agency projects, such as for colleges, housing and corrections. More than $245 million is specifically marked for transportation projects including local road improvement and bridge replacement programs. Close to $180 million in borrowing currently is marked for Minnesota State Colleges and Universities.
About $90 million in bonds and $185 million in cash for local projects is split between Democrats and Republicans. Ahead of the vote Lee said he was confident they had the Republican votes to pass the proposal. Rep. Dean Urdahl, R-Grove City, successfully introduced amendments to the proposal to include Republican district capital projects in the bills and delivered a speech in support.
But even though the House passed the bill, minority Senate Republicans say they won’t let anything through without action on taxes.
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Senate Majority Leader Mark Johnson said he and fellow Senate Republicans want to make sure a bonding bill gets to the governor this session, but not without some of their concerns being addressed.
“We just want them to know that that bill is going to be dead on arrival because we believe that we need to see some tax cuts tied to that,” Senate Minority Leader Mark Johnson told reporters Monday.
Minority Republicans in both chambers last week proposed $13 billion in tax cuts, including direct payments to Minnesota residents and the elimination of the Social Security income tax. While Republicans would not be able to advance legislation to accomplish these things directly, the bonding bill and its requirement of a supermajority presents an opportunity to negotiate on the proposals with Democrats.
Gov. Tim Walz has proposed direct payments to Minnesotans from the record surplus, but Democrats have been lukewarm on the proposal. And while a handful of Senate Democrats campaigned on ending the Social Security income tax, the majority of the party in the Legislature does not back a complete elimination.
Addressing reporters ahead of the floor session Monday afternoon, House Speaker Melissa Hortman said she was skeptical of whether the bonding bill strategy would pay off for Republicans.
“This tactic of trying to use a bonding bill for leverage to get other things done is something that the prior House Minority Leader spent months and months doing in 2020 and 2021. And it didn't pay off. It didn't pay dividends. It's not a successful strategy,” she said. “Minnesotans have been pretty clear that they don't want politicians tying one thing to another thing to play leverage games. They just want us to get the work done.”
If Republicans don't work with DFLers on bonding, Hortman said they could move forward with a "with-or-without-you" bill that uses cash only to fund projects, which would only require a simple majority to pass.
Follow Alex Derosier on Twitter @xanderosier or email aderosier@forumcomm.com .
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This story was updated at 6:53 p.m. March 6 after the House vote. It was originally posted at 5:19 p.m. March 6.
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