Senate Republicans reject Minnesota infrastructure package

A $1.9 billion package to repair Minnesota roads, upgrade wastewater systems and fix other infrastructure appears to be the first casualty of this year's legislative session.

Lawmakers from both sides of the aisle said they still want to pass construction and maintenance funds. But negotiations just got murkier.

Seven Senate Republicans needed to join Democrats in supporting an infrastructure deal Thursday, which required a supermajority to pass. In the House, more than enough GOP representatives backed the funds. Senate Republicans, however, remained firm on a repeated vow: Before they agree to borrowing, they want tax cuts.

"It is premature. This is coming before the responsibility that we have to get some of that surplus back to the hands of Minnesotans," said Sen. Carla Nelson, R-Rochester, who added that during her 15 years in the Legislature this is the first time she has not supported a bonding bill. "It's a hard decision, but you have to do what's right."

Construction industry workers gathered at the Capitol ahead of Thursday's vote to pressure senators to support the bill.

The two infrastructure bills lawmakers were set to consider — one containing $1.5 billion in borrowing and another with nearly $400 million in cash — included money for projects ranging from university building repairs to park and trail upkeep. Democrats chose not to bring up the $400 million all-cash measure after Republicans rejected the borrowing bill.

The spending would create construction jobs, said carpenters union member Mandy Reese of Zumbrota.

"It's important to me to be able to keep supporting my family and having stability in our household," Reese said. "We're very proud of the things we built. And making sure we have safe communities and the things that we need — upgrading our infrastructure — that is important to us."

Minnesota's roads are riddled with potholes, and mayors and city managers have to return to the Capitol year after year to repeat requests for help with sewage treatment facilities and other needs, said Senate Capital Investment Chair Sandra Pappas, DFL-St. Paul. State leaders have not passed a major infrastructure package since 2020.

"Our winters are harsh and our roads and bridges take the brunt of it," Pappas said. "Today we have an opportunity to address the immense backlog of bonding projects in Minnesota."

Senate Republicans stressed that they also want an infrastructure measure this year, but they said voters are urging them to act on taxes. For the GOP, which is in the minority in both chambers of the Legislature, the infrastructure borrowing bill that requires a three-fifths vote to pass is their primary source of leverage.

"If we get some meaningful tax relief, we absolutely will work together and get a bonding bill done," said Sen. Karin Housley of Stillwater, the Republican lead on bonding negotiations.

In a last-minute effort, Senate Republicans tried unsuccessfully to amend the bonding bill to eliminate the state's tax on Social Security benefits.

While many Democrats support an end to Social Security taxes, they opposed tying the ideas together. The Senate, where Democrats hold a one-seat majority, narrowly rejected that move.

"It's beyond my understanding that they've chosen this strategy of linking this very important bonding bill that we've been waiting for for three years to other issues'' set to be addressed later in the session, Pappas said.

After Republicans blocked the $1.5 billion borrowing bill, Pappas proposed reconsidering it and senators agreed to lay it on the table — meaning it could be resurrected.

But instead of continuing to focus on a borrowing deal, Pappas said she is turning her attention to an all-cash measure. Such a bill would not require the same supermajority as the borrowing legislation.

Minnesota has a $17.5 billion estimated budget surplus, and the majority of the dollars are one-time cash that will not be available in future years. Both DFL and GOP lawmakers have said infrastructure projects are a good use for some of the cash.

However, there's a lot of competition for the money, Pappas said, and some of the projects that were included in the deal senators rejected Thursday might have to be cut.

DFL Gov. Tim Walz has called for a $3.3 billion infrastructure deal.

"We haven't had one since 2020," Walz said Thursday before the Senate vote. "It has massive support across the state. It is fiscally responsible."