Walz announces $518M bonding bill plan

Tommy Wiita
Updated: February 22, 2021 06:42 PM
Created: February 22, 2021 03:13 PM

Gov. Tim Walz announced his 2021 Local Jobs and Projects Plan – the governor's capital investment recommendation for the current legislative session.

The plan, usually referred to as the bonding bill, calls for investing $518 million in projects across the state to maintain existing assets, invest in communities and leverage available federal funds, according to the governor's office. Nearly half the plan will support asset preservation projects at state agencies and higher education institutions.

"When Gwen and I bought our house in Mankato, we knew the importance of investing in upkeep over the years in order to avoid major repairs down the road. You fix your roof before it collapses. You repair a leaky pipe before it leads to water damage. That’s exactly what this plan prioritizes—taking care of what we have," Walz said. "By maintaining existing assets, we can keep our state’s infrastructure strong and reliable for generations to come. What’s more, we can create jobs that boost our economy in the process."

The bonding bill includes $240 million in general obligation bonds, $250 million in appropriation bonds and an additional $28.3 million in general fund cash. General obligation bonds are backed by the state's full faith and credit and finance publicly owned capital projects. Appropriation bonds are repaid through annual appropriations from the legislature and can be used to finance a broader capital of projects, the governor's office said.

"This is one of the most fiscally conservative things you can do, is by investing in these types of projects when the interest rates are low, and they make an impact," Walz said.

"The 2021 Local Jobs and Projects Plan ensures our students are learning in safe and sufficient facilities, makes critical investments in our communities across the state, and allows us to leverage time-sensitive federal grant funds," Lt. Gov. Peggy Flanagan added. "At a time when our communities need investment and our workers need jobs, this plan delivers."

More from KSTP:

Gov. Walz signs state's largest bonding bill to date

'The time to invest is now': Walz proposes $2.2B bonding bill as part of special session priority to build a stronger, more equitable economy

The plan is broken down into three parts, as follows:

Maintaining existing assets

According to the governor's office, deferred maintenance needs for state agencies total more than $1.7 billion. Nearly half of Walz's and Flanagan's 2021 capital budget will support asset preservation projects at state agencies and higher education institutions, such as roof replacements and exterior repairs, renovation and repurposing of existing facilities to meet 21st century needs, and renewing buildings to keep Minnesotans safe and healthy.

Their recommendation also includes $43 million to make critical security upgrades to the Capitol Complex. This amount fully funds the capital recommendation in the 2021 Advisory Committee on Capitol Area Security Annual Report, according to a release.

The governor says the Capitol security money is important, "Not to make a fortress out of the Capitol, but to make it safe for visitors and those that are working there."

The money could be used for everything from a permanent security fence around the Capitol to metal detectors to body cameras for Capitol Security officers.

Investing in communities

Both Flanagan and Walz said the decisions made on Minnesota's infrastructure will have an impact for 20 years or more. The 2021 Local Jobs and Projects plan makes smart investments that position Minnesota for future growth. The plan includes $100 million in housing infrastructure bonds to preserve and build new housing opportunities across the state. Funds will be awarded through a competitive request for proposal process to private for-profit and nonprofit developers for supportive housing, preservation and homeownership development including community land trusts, senior housing and manufactured home park infrastructure.

Additionally, the plan also includes $150 million in redevelopment appropriation bonds to support rebuilding efforts in the cities of Minneapolis and St. Paul, in the areas damaged by civil unrest in May and June 2020. This investment will create or retain jobs; preserve the tax base; support enterprise development and wealth creation for people adversely affected by the long-standing structural racial discrimination and poverty; and help prevent displacement of low-income residents, according to the governor's office.

The governor anticipates some resistance from Republicans who will question why the entire state has to pay to rebuild Minneapolis and St. Paul.

"Nobody's saying that what happened, and the folks who committed arson, was a good thing," the governor said while announcing his bonding bill plan at the University of Minnesota. "Many of them have been arrested and punished for it. That doesn't change the fact the damage of what they did is still there and that's hurting all of us economically."

The governor and lieutenant governor recommend $15 million to support capital projects from community-based organizations that are led by and serve communities of color and American Indians, as these organizations have not traditionally had access to capital investment from the state.

Ensuring federal funds come to Minnesota

The plan also provides $14.5 million in general obligation bonds to retain federal matching funds. Without investment for these projects, Minnesota risks losing highly competitive federal funds to other states.

The plan recommends $4.5 million for a new State Veterans Cemetery in Redwood Falls. The Veteran's Affairs National Cemetery Administration's Veterans Cemetery grant program will provide a $5.99 million federal grant for this project. Additionally, the governor's office said the plan recommends $10 million for Minnesota's share of design and environmental work for a second daily Amtrak train between the Twin Cities, Milwaukee and Chicago, including stops in Winona and Red Wing.

The Federal Railroad Administration has awarded a $31.8 million consolidated railroad infrastructure and safety initiative grant, plus a $12.6 million restoration and enhancement grant for this project.

It's unclear if the Republican-controlled Senate will even consider a bonding bill this session.

"This year the top priorities at the legislature are putting together the state budget and appropriately responding to the coronavirus pandemic," Sen. Tom Bakk, (I) Cook, said in a written statement, noting the legislature just passed a $1.9 billion bonding bill in October.

Bakk is chair of the Senate Capital Investment Committee.

"I am committed to helping bring people together to tackle the important challenges facing our entire state. At the appropriate time, I am hopeful the legislature and the governor will again come together to produce a bonding bill focused on the critical needs of Minnesotans."

For more information on this proposed bill, click here.

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