Gov. Mark Dayton wants $1.5B for Minnesota infrastructure projects

Headed toward his final legislative session, Gov. Mark Dayton on Tuesday proposed a $1.5 billion public works bonding bill that prioritizes upkeep projects on college campuses but would also spread resources to improving other state buildings, constructing affordable housing and repairing clean water infrastructure.

"Now is the time to make substantial investments in our state's future," Dayton said in a statement, citing the state's Triple-A bond rating and what he called an "enormous need for infrastructure improvements across Minnesota."

About a third of the projects Dayton is proposing are on campuses of the University of Minnesota and Minnesota State systems. Dayton must build support from Republican majorities in the state House and Senate, who are unlikely to want to exceed $1 billion in bonding, or direct that much toward campus projects at the expense of other local initiatives.

"While Gov. Dayton once again proposes a bonding bill that busts the budget, the Senate Capital Investment Committee is busy touring the state doing the hard work of setting priorities for a bill the taxpayers can actually afford," the committee's chairman, Sen. David Senjem, R-Rochester, said in a statement.

Senjem said he would work with Dayton on a bill that invests in transportation and takes care of state infrastructure.

The state borrows money by selling construction bonds to pay for the expensive infrastructure projects in bonding bills. The governor's expansive plan includes $30 million for a revitalization project at Fort Snelling, $12 million for renovations at the Stone Arch Bridge in downtown Minneapolis, $100 million for affordable housing statewide, and $50 million for development of an express bus program in Hennepin County.

Minnesota communities submitted proposals for projects, including trails, interchanges and water system improvements. Their requests for state money totaled $857 million. Dayton chose not to include the projects in his plan.

Dayton proposed similar-sized borrowing bills last year and in 2016. The 2016 bill fell apart at the end of that year's legislative session; last year the Legislature whittled down the governor's nearly $1.5 million plan to $998 million.

How much money ends up in the final public works bill depends both on negotiations with legislators and the state's February budget forecast. The latest forecast, in November, projected a $188 million deficit for the rest of the 2018-2019 biennium.

It's too early for the House to offer its own bonding number, House Capital Investment Committee Chairman Dean Urdahl said. But the $800 million bond assumption included in the November budget forecast is a good starting point for discussions, he said.

Minnesota Management and Budget Commissioner Myron Frans said Dayton might have to reconsider his proposal in light of the upcoming forecast. Frans presented the bonding proposal on Tuesday without Dayton, who was home sick with a cold.

University of Minnesota President Eric Kaler and Minnesota State interim Chancellor Devinder Malhotra spoke in support of the governor's plan at the news conference.

"This recommendation today aligns perfectly with my vision for the U when it comes to capital investment," Kaler said.

The University of Minnesota would get $299 million in Dayton's proposal and the Minnesota State system would receive $243 million. In both cases, the bulk of the money would go toward maintenance for existing campus infrastructure.

"There aren't a lot of shiny, bright objects in here," Kaler said, stressing that the school is trying to reduce a backlog in deferred building maintenance. Both Kaler and Malhotra said the money for bricks and mortar projects could help them avoid raising tuition.

The state is facing a workforce shortage and needs more skilled workers in a variety of fields. The proposed funding to maintain educational facilities would help ensure colleges and universities can produce the workforce Minnesota needs, Malhotra said.

While higher education leaders are championing the proposal, the lack of local infrastructure projects could be an impediment to winning legislative support. Urdahl, R-Grove City, said such projects are usually critical to a bonding bill's success.

Many of the local projects were "very worthy" of funding, Frans said. However, in his final year Dayton wanted to focus on preserving state assets and getting some long-needed maintenance work done, he said.

"It's certainly not the end of the ballgame at all," Frans said of the local requests. Tuesday's proposal was the governor's first step toward a bonding bill, and Frans said they are willing to include some communities' requests that legislators support.

The governor's plan includes $998 million for maintaining and improving state infrastructure. Of that, $167 million is dedicated to local water infrastructure projects and $115 million would go to housing projects.

Minnesota communities need the state's help in those areas, said Rep. Alice Hausman, the DFL lead on the House Capital Investment Committee. Legislators seem to have a "psychological barrier" about borrowing more than $1 billion, but the governor's $1.5 billion proposal makes sense to keep pace with inflation, said Hausman, of St. Paul.

She would like to add some local projects to the mix, which she said can strengthen the state's regional centers and promote tourism to smaller towns. Legislators could cut a bit of the higher education maintenance funding Dayton proposed in order to support some local projects, Hausman said, but "I'm hoping we don't trim his bill too much."