Gov. Tim Walz unveils final part of record $2 billion public works plan

DFL Gov. Tim Walz unveiled the final phase of a $2 billion state bonding package Wednesday, laying out the details of an ambitious public works plan that Republican lawmakers immediately criticized as bloated and costly.

The money would pay for a record number of local projects around the state, from repurposing a monorail track as a walkway at the Minnesota Zoo to repairing a sea wall and lakewalk in Duluth. Significant state building projects Walz debuted Wednesday included $29.5 million for a new Emergency Operations Center and $21.3 million for improvements to the laboratory that serves the state health and agricultural departments.

Speaking in the State Emergency Operations Center in St. Paul, Walz tested the pitch he plans to make to the 2020 Legislature, where Republican lawmakers want to cut the borrowing package by half.

"It's about the projects that are inside this bill, not the overall number," Walz said. "Not doing these proposals puts us at risk."

The final piece of Walz's bonding package focused on roads and bridges, various "quality of life" items, and public safety projects such as the redo of the St. Paul operations center. Staff at the center work with local governments and state agencies to handle crises. His earlier proposals, rolled out over the past week, focused on housing, college campuses and water projects.

The governor — along with some legislators — has been traveling the state in recent months to study public works needs for which communities want state funding. His total $2.03 billion borrowing package includes more local projects than past governors included in their proposals.

"If you think there's a certain project that certainly should not be done, that's a fair political discussion," Walz said. "Say, 'I totally disagree that they can put a bucket under the roof in Fergus Falls and train just the same way.'  But don't tell me that it's going to fix itself. Don't tell me that interest rates are too high. Don't tell me that we're not in a position to do it."

Republican legislators have urged caution since the governor first telegraphed last week that he wants to use around $2 billion in general obligation bonds. The debate over public borrowing, playing out against a projected $1.3 billion surplus, is expected to be one of the most difficult negotiations of the legislative session that begins next month.

The bonding bill can't be "everyone's wish list," said House Minority Leader Kurt Daudt, R-Crown. "I'm sure that's a tactic, to try to get all these local communities to support the bill, of course. And everyone will come and lobby us and say, 'We support the governor's bill.' No, what you support is your project and you want it in whatever bill will get it passed and signed into law."

Daudt said he's willing to borrow more than $1 billion but doesn't want to double the size of bonding bills the Legislature has approved in past years.

"We have to look at what really is a state responsibility vs. a local responsibility. If we get into a culture of doing these local projects, the state of Minnesota is going to own them forever. Because it just gets to the point that — you did it for one, why can't you do it for another?" said Senate Capital Investment Chairman Dave Senjem, R-Rochester.

In addition to the more than $2 billion in general obligation bonds, Walz also plans to use $571 million from other sources — including other types of bonds and cash — bringing his total capital investment plan to $2.6 billion.

Walz's biggest proposals Wednesday were focused on transportation. He suggested using $112 million for local bridge improvements and $100 million for local roads.

His proposal also included $110 million in trunk highway bonds to build bridges, underpasses and other infrastructure to help improve safety and traffic flow at railroad crossings. Trunk highway bonds are payable from a designated trunk highway fund, so they are not included in the $2 billion borrowing package Walz is presenting to lawmakers.

The state received $5 billion worth of requests from state agencies and local governments, dramatically more than in years past, said Minnesota Management and Budget Commissioner Myron Frans. He argued the state needs to invest in many of those needs now.

"With eight years of balanced budgets, a rainy-day fund, AAA credit ratings and low interest rates, we can afford a robust capital budget bill that is below our state debt limits," Frans said.