DFLers seek late boost in construction spending

DFL legislators are making a last-ditch effort to secure more money for statewide construction, potentially salvaging millions of dollars in new projects in the closing weeks of the legislative session.

Senate DFLers plan to announce an $850 million spending plan Monday morning, but DFL leaders continue working behind the scenes to see if they can persuade Republicans to support a higher amount of state-backed debt — around $1.2 billion. At the same time, advocates for various projects hanging in the balance are intensifying pressure on GOP legislators who could clear the way for long-sought projects back home.

The time for a deal "is now, right now," said House Speaker Paul Thissen, DFL-Minneapolis. "This is the one we have the furthest to go on."

The statewide construction measure is one of the last major pieces to wrap up before legislators can adjourn. DFL proposals for $300 million in new spending and another $100 million in tax relief are unfinished, as well, but legislators are not likely to finalize those until they see if an agreement can be reached on more construction projects.

Legislative leaders signed an agreement last year committing to just under $850 million in new construction projects for this year. But DFL Gov. Mark Dayton did not make any commitment. With low interest rates and a big budget surplus, Dayton is pressing hard for about $1.2 billion in state-backed construction projects. He has touted projects in Republican-leaning districts to persuade GOP leaders to go beyond their leaders' agreed-upon limit.

So far, Republicans have not been willing to budge from the lower number.

"I don't think we will go beyond that," said House Minority Leader Kurt Daudt, R-Crown.

Republican leaders must balance their desire to hold down the borrowing number against the internal pressure to include members' cherished projects in the proposal. Another possible scenario involves Republicans agreeing to the higher borrowing number in exchange for more tax relief, which would bring a significant political victory for the GOP.

Legislators are figuring out how to spend the last of the $1.2 billion projected budget surplus — a surprise windfall that upended the dynamics of the session.

DFL leaders announced Friday that they have agreed to $293 million in new spending, which is likely to include money for low-income school lunch programs, pay raises for home health care workers and more education spending.

They also have agreed to an additional $200 million in cash to pay for additional projects, if Republicans refuse to go higher.

DFLers also agreed to a second round of tax relief for the year, about $103 million in new tax breaks. The measure would bring total tax relief to about $500 million for the year.

Republican leaders have started to hint that they might be willing to go higher.

"There are some things that have not been talked about, that if they bring those things forward," Republicans might be able to consider going higher, said Senate Minority Leader David Hann, R-Eden Prairie.

Hann said he was disappointed that DFLers want to break their agreement.

"When do you just say, 'Why can't we just agree to do what we said we were going to do?' " asked Hann.

With time running out, legislators are racing to patch together a budget and taxes measure, while leaders see if some deal can be reached on construction spending.

Republicans say DFLers are needlessly dragging on the session. DFLers could immediately pass the measure for statewide construction projects if they simply honor last year's agreement.

"We are just kind of stalling here," said state Rep. Greg Davids of Preston, the leading Republican on the House Taxes Committee. "They have all the power. You'd think they'd just cut a deal and get out of here."

DFLers remain committed to seeing if some deal can be reached for more.

State Rep. Alice Hausman has traveled the state and sifted through $2.7 billion in projects to pare the list to $846 million. She has looked at an airport with no sewer or water and has seen a decrepit fence at the state's oldest cemetery that has given way to vandals.

"It's frustrating because I know how important all of these projects are," said Hausman, DFL-St. Paul, chairwoman of the House Capital Investment Committee. "Every single line in the bill, I have a story like that."

"I was surprised the Republicans haven't engaged more in a larger discussion about what other pieces of the legislative session might be important to them in exchange for a larger bonding bill," Thissen said. "We've been trying to open the door, but they keep consistently closing that door."