Make a deal on a state bonding bill

When Minnesota's governor and Legislature cobble together a bonding bill, it's usually a struggle over how much the state is keen to borrow to replace roads and bridges, upgrade state university buildings or rehab low-income and senior housing. The 2020 wish list is 50 pages long.

Democrats talk of borrowing billions. Republicans counter with figures that have fewer zeros.

True to form, Gov. Tim Walz is pushing for a $2.6 billion bonding bill this session, casting the spending as a stimulus counterweight to fast-disappearing private sector jobs and income. Republican Senate Majority Leader Paul Gazelka has said $755 million is more like it, though he's left open the prospect of borrowing more.

Complicating matters further, state House Republicans vow to block long-term borrowing measures as long as the governor continues to use the emergency authority that has allowed him to issue the pandemic stay-at-home order. His emergency powers end May 13 — five days before the Legislature is set to adjourn, with or without a bonding bill.

"It's important that the Legislature be involved in the decisionmaking process" on the pandemic response, said House Minority Leader Kurt Daudt, R-Crown.

Gazelka said Monday he would not hold up a bonding legislation over Walz's emergency powers, but to pass the House a bill would need six GOP votes.

A quick compromise to get the bonding bill back on track should be a top priority for Walz and legislators of both parties.

Walz is right to portray shovel-ready projects as important stimulus to the state economy at a time when legions of workers have lost employment that may not return in restaurants, hospitality, tourism, entertainment and other industries where packing people together is key to economic success. "Jobs, jobs, jobs" should be a theme of capital spending plans.

Making wise borrowing choices will be more important than ever, however. Sporting a sterling AAA credit rating may not be enough for Minnesota to escape a rising cost of borrowing during a period of bond market tumult.

It's easy to understand why investors may be skittish about buying municipal bonds. U.S. Senate Majority Leader Mitch McConnell rattled markets with talk of sending state and local governments into bankruptcy. The loose talk raises specters of default on debts — a blow already struck in a few cases.

Collapsing revenue will make raising taxes counterproductive. That means the state may have to consider imposing user fees as a strategy for assuring bonds are repaid.

Want $55 million to plan for metro rapid-transit bus routes? Fine. But maybe the fares will have to be a bit higher to repay that debt. How about $12.5 million for a new arena/expo center at Graham Park in Olmsted County? Sure. But shouldn't exhibitor fees help make payments on those bonds?

The state also should use a guiding principle of a well-run private business to pick and choose projects for the state bonding bill: What capital projects will offer the greatest measurable return on investment?

That doesn't necessarily mean that sprucing up a nature trail or installing a park community center won't make the cut. Another touchstone for making choices should be putting people back to work, in the manner of New Deal projects that left landmark legacies that have endured for 85 years.