Pandemic standoff clouds vote on Minnesota construction projects

Leaders in the State Capitol said Friday they are committed to passing a major package of statewide construction projects despite threats by House Republicans to block the measure unless Gov. Tim Walz gives up the emergency powers he has used to deal with the coronavirus pandemic.

House Republicans, whose support is needed to pass the long-term borrowing bill, say they remain opposed to the $2 billion bonding proposal scheduled for a vote Saturday. Although Democrats control the lower chamber, the legislation requires a supermajority to advance to the Senate.

Senate GOP Majority Leader Paul Gazelka, R-East Gull Lake, has said he remains determined to pass a bonding bill, though not one as large as the one proposed by the House DFL.

Gov. Tim Walz, who this week extended his emergency powers until June 12, called passage of a bonding bill "essential" for jobs and economic development around the state. The House package contains money that cities, colleges and state agencies have sought for years, much of it intended for roads, bridges, water systems and college campus improvements.

With the Legislature scheduled to adjourn on Monday, Walz, House and Senate leaders, mayors and even college students are calling for approval of a significant state bonding measure.

Gazelka indicated that Walz's decision on Wednesday to ease his stay-at-home orders and allow more businesses to reopen "brought both sides closer together" on a number of end-of-session negotiations, including the bonding bill. Under Walz's revised "Stay Safe MN" order, small retailers and some businesses can reopen Monday. However, he ordered bars, restaurants, salons, gyms and theaters to remain closed until at least June 1.

But Republicans in the House, led by Minority Leader Kurt Daudt, R-Crown, say their priority is curbing the emergency powers Walz has used to close businesses and make other sweeping decisions on the state's COVID-19 response without legislative approval.

"Before we take care of government spending, or capital investment, we need to reopen and provide structure to those private sector businesses to allow them to re-engage in commerce while also protecting public health," Rep. Pat Garofalo, R-Farmington, said during the bonding bill's final hearing earlier this week. The standoff has divided Republicans in the House and Senate, where Gazelka says he wants to get bonding done this session — and not in a special session that could come in June if Walz extends his emergency powers for another 30 days.

If Walz moves to prolong his emergency powers again, the Legislature is required to return for a special session to review the decision. Under current law, they can only act to deny an extension through votes in both chambers, which gives Republicans little leverage while the House is in DFL hands.

But with the possibility of a special session looming, Senate Republicans passed a bill Friday that would require both houses to affirm any future extensions of Walz's emergency powers. The House DFL majority has blocked attempts to curtail Walz's emergency powers so far and is unlikely to pass a measure that would give the GOP-led Senate more power to block a future extension.

A special session in June also could give lawmakers another chance to come to an agreement on a bonding bill if House Republicans hold firm and a deal collapses this weekend. But that prospect has some city leaders worried.

"We really want to get it done during the session," said Red Wing Mayor Sean Dowse. The House DFL bonding bill includes $10.6 million for a rail grade separation project that Dowse said his city has been pushing for a decade. "Capital bonding bills have not had a 100% clearance rate when they go to special session," Dowse said. "And the longer it's delayed, the costs are going up."

Other stakeholders also have been pressing for the Legislature to cut a deal. The Minnesota Student Association sent a letter to legislators urging them to fulfill the University of Minnesota's $317 million bonding request. And construction worker unions and city leaders across the state say the pandemic's economic downturn has made construction jobs more critical than ever.

"Water treatment plants, streets and bridges still need to be done. The interest rates are low and they also create jobs," Walz said Friday.

Waiting until June would leave communities in a state of uncertainty, said House Speaker Melissa Hortman, DFL-Brooklyn Park. "We're there now. We have a deal within sight, if people are willing to be reasonable. So there's no reason not to do it now," she said. Gazelka echoed that sentiment, saying on the Senate floor Thursday that, "God willing," bonding wouldn't have to wait for a special session.

A three-fifths majority is necessary to pass the borrowing package — which means at least six House Republicans would have to join all Democrats in approving the measure.

Daudt did not respond to requests for comment Friday, on the eve of Saturday's scheduled House vote.

Even if Daudt relents on Walz's emergency powers, the scale of the bonding proposal still needs to be ironed out. House Democrats proposed using more than $2 billion in general obligation bonds, as well as another nearly $500 million from a variety of other funding sources. Walz's plan is a similar size.

Republicans in the Senate and House have balked at the size of the DFL borrowing plan, which would increase debt payments at a time when Minnesota is facing a projected $2.4 billion budget deficit. The economic downturn has also led some GOP legislators to question whether cities, which must put up matching funds, will be able to afford their projects now.

Dowse and other city leaders have dismissed those concerns. "They have the money ready to go," said League of Minnesota Cities lobbyist Anne Finn. Despite the political roadblocks, Hortman remained hopeful on Friday.

"In the last 72 hours of the legislative session, things can move very quickly," she said. "There usually are stops and starts, and moments where things look alternately hopeful and bleak. If there is a breakthrough in negotiations, things can move very fast."

Staff writer Torey Van Oot contributed to this report.