Minnesota Senate approves record $1.9 billion infrastructure package

The Minnesota Legislature cleared the largest public works infrastructure package in state history Thursday, overwhelmingly passing a long-delayed bill authorizing nearly $1.9 billion in public borrowing to pay for roads, wastewater treatment and a slew of major construction projects.

The Senate's approval of what's known as a bonding bill marked the end of months of contentious negotiations over a measure supporters say will provide an infusion of cash and jobs into state and local economies devastated by the COVID-19 pandemic. The state House passed the bill by a wide margin on Wednesday.

Groups that had lobbied for the bill celebrated it as a victory for communities and construction workers facing an uncertain future. Gov. Tim Walz, a Democrat, is expected to sign it in the next week.

"This bonding investment is necessary for our communities, workers and our economy," said Jessica Looman of the Minnesota Building and Construction Trades Council. "Construction workers across the state are breathing a little easier today, knowing that there will be jobs coming so they can keep working to provide for themselves and their families."

While the bonding bill was a top bipartisan legislative priority for 2020, an agreement eluded lawmakers throughout their regular calendar and four previous special sessions this summer marked by disputes over the governor's emergency powers in the pandemic.

Unlike other legislative proposals, borrowing bills require three-fifths super­majorities to pass, giving added leverage to minority caucuses in both chambers. Its fate remained uncertain heading into the fifth special session this week as legislators convened with just three weeks to go until the Nov. 3 election.

The final agreement, passing by margins that belied the political tensions, includes $700 million for roads and bridges and $300 million for wastewater treatment projects across the state. The bill also funds hundreds of projects statewide, ranging from a $20.5 million business park in Becker to $750,000 for Winona's Riverfront Trail.

Major expenditures in the Twin Cities metro area include $55 million to increase bus rapid transit, $52 million to replace the Third Street Kellogg Bridge in St. Paul and $29 million for a new child development building at the University of Minnesota.

The state will also issue bonds to finance a $12.5 million outdoor concert venue in a riverfront area of north Minneapolis, the centerpiece in a massive plan to redevelop the area known as the Upper Harbor Terminal. City leaders have called the project their top capital priority.

Duluth, meanwhile, will receive $13.5 million for repairs to aging sea walls and the Lakewalk trail, which will be fortified after sustaining damage from Lake Superior storms in recent years.

Left out of the final package was a $40 million request for state aid for an ambitious riverfront development proposal in St. Paul.

The bill also approves $166 million in upgrades to college and university campuses and sends $44.5 million to the Department of Corrections for work on a number of facilities, including Arrowhead Regional Corrections in Duluth.

Senators backing the measure noted that the funding is split roughly equally between rural areas and the metro area. Lawmakers also sought to distribute the money fairly equally between DFL and GOP districts.

"This bonding bill will touch every Minnesotan in this great state," said Sen. Sandy Pappas, a St. Paul Democrat who serves as vice-chair of the capital investment committee.

In addition to the borrowing, the package includes additional spending to pay for direct care and treatment services, overtime for corrections workers and public safety money to respond to the civil unrest in the Twin Cities that followed the death of George Floyd. It also approves some tax changes long sought by Republicans.

Senate Majority Leader Paul Gazelka, R-East Gull Lake, praised a provision to align state and federal tax law to allow businesses to deduct large equipment purchases. Gazelka said the change, which Republicans have pushed for years, will allow farmers and business owners "to invest in their operations and keep growing their business in these challenging times." Business groups also celebrated the change.

"Finally, the Legislature has passed something that benefits small-business owners," said Mike Hickey, Minnesota director for the National Federation of Independent Business. "The ability for small businesses to now deduct more of their essential equipment frees up money for them to put back into their businesses and get back to what they do best: support Minnesota's economy, their employers and their employee's families."

Thursday's deal wasn't without political friction. After months of refusing to support the bill over objections to Walz's emergency powers, Republican leaders in the House raised concerns about new spending and the cost of debt service on the bonds given the state's projected budget deficit. After 10 hours of debate on Wednesday, 25 House Republicans ultimately voted with Democrats to approve the bill.

On Thursday, Gazelka said he and other Senate Republicans were frustrated that the version that cleared the House included provisions that weren't agreed upon by leaders in both chambers ahead of the vote.

But the House adjourned late Wednesday, blocking the Senate's ability to amend the House-passed measure.

Some GOP senators complained about the cost of the package, with critics using phrases such as "a garbage bill" and "full of pork and not the good pork" to describe the final agreement.

Others criticized the paring down of the tax provisions from an earlier bill brought forward in May.

In the end, all but three Republicans senators backed the bill as it passed by a wide margin, exposing them to potential criticism from their fiscally conservative GOP base. Senators backing the bill applauded the work to reach accord ahead of the election. Sen. Charles Wiger, DFL-Maplewood, commended colleagues for achieving "mission impossible."

"This was certainly making sausage and a little bit worse," said Sen. David Senjem, R-Rochester, who chairs the Senate's bonding committee. "But nonetheless, we're here today and we've got a good bill."

Staff writers Jessie Van Berkel, Miguel Otárola, Brooks Johnson, Emma Nelson and Shannon Prather contributed to this report.