State senator proposes $300M bonding bill
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The Minnesota Legislature usually passes its big bonding bills in non-budget sessions. But Sen. Keith Langseth, DFL-Glyndon, the chairman of the Capital Investment Committee in the Minnesota Senate, said the state needs another $300 million bonding bill this year to create some needed jobs.
"You know if it wasn't for the problems with the economy we'd probably be going with $120 million," Langseth said. "This is the time to bond and build."
Langseth said about half of the bill will likely go toward projects to repair and maintain college buildings and other public facilities.
Representatives of the University of Minnesota, the Minnesota State Colleges and Universities system and several state agencies appeared before the Senate committee to detail possible projects. Langseth said projects trimmed out of last year's bonding bill could also get another look.
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"We're looking at everything that was vetoed," Langseth said. "And we won't necessarily do all of them. But they certainly will be ones we'll be looking at."
Last year, the House and Senate passed a $925 million bonding bill, but Gov. Tim Pawlenty objected to the size. The Republican governor used line-item vetoes on more than 50 projects to trim the bill down to $717 million.
One of those vetoed projects was a new Bell Museum of Natural History at the U of M. University officials are looking to get that project back in this year's bill.
At least one Republican member of Langseth's committee isn't convinced another bonding bill is the right move.
With the state already facing a deficit that could grow to nearly $7 billion next month, Sen. Geoff Michel, R-Edina said he doesn't want to put more debt on the state credit card.
"Because our revenues are declining, there's actually a question of whether we can sustain the amount of bonding we have already done as a state," Michel said. "So, we may be already over our bonding capacity, our bonding limit. And there are no immediate signs of economic recovery. So, this may be something that some members and legislators wish they could do. But I'm not sure when we get out the calculator that we're going to be able to afford it."
The capacity argument has been made before. State lawmakers have traditionally limited new debt to 3 percent of expected state revenues. But DFL Rep. Alice Hausman of St. Paul, chair of the House Capital Investment Committee, said she doesn't see a problem with surpassing that guideline.
"Of the seven states that have triple A bond ratings, two have no debt service guidelines at all," Hausman said. "So, the trick about being a good credit risk and getting a good credit rating is do your work well, balance your budget well. And that of course is the challenge all of leadership has this year."
Gov. Pawlenty still has concerns about the debt limit and he's urging Hausman, Langseth and other lawmakers to use caution in a bonding bill.
Pawlenty spokesman Brian McClung said the governor might be willing to support a limited bonding bill, but only if it helps the state leverage money from the federal economic stimulus bill for construction projects.
