Governor’s Bonding Proposal Includes Projects That Benefit Cities

January 21, 2020

The proposal would borrow more than $2 billion and provide critical funding for water infrastructure, transportation, housing, and other programs important to cities.

Gov. Tim Walz announced on Jan. 15 a bonding proposal that would borrow more than $2 billion this year to invest in capital projects statewide.

The governor said he would like to use $2.03 billion in general obligation bonds, along with an additional $571 million in financing — including general funds — to bring the total capital spending to $2.59 billion.

The funds would be used to make capital investments in public safety, transportation, housing, water infrastructure, higher education, and other public assets.

—View details of the governor’s proposal

League-supported provisions included

The proposal, which will be debated alongside forthcoming packages introduced by House and Senate leaders, contains many provisions related to infrastructure funding programs that benefit cities and are supported by the League, including:

  • Mighty Ducks Grant Program for indoor air quality improvements to ice arenas: $4 million.
  • Transportation Economic Development Infrastructure Program to fund local road and public infrastructure projects that support economic development: $3 million.
  • Housing finance: $200 million in housing infrastructure bonds and $60 million for public housing rehabilitation.
  • Community Electric Vehicle Infrastructure Program: $14 million, which includes $12 million for grants to local governments to install a network of electric vehicle charging infrastructure.
  • Sustainable communities and climate resiliency with a focus on managing extreme weather events: $15 million for grants to municipalities.
  • State match for federal grants to Clean Water and Drinking Water Revolving Fund loan programs: $25 million.
  • Water Infrastructure Funding Program: $100 million for grants to local governments.
  • Point Source Implementation Grants Program: $75 million.
  • New State Emergency Operations Center to support state and local agencies during a crisis and serve as a training center for public safety personnel: $29 million.
  • Rail Grade Separation Program to construct grade separations at high priority railroad crossings: $110 million.
  • Local Bridge Replacement Program: $112 million for grants to local governments.
  • Local Road Improvement Program: $100 million for grants to local governments.
  • Safe Routes to School Infrastructure Program: $10 million.

Just a starting point

The governor’s proposal marks a starting point to what is likely to be a lengthy process to produce a 2020 capital investment bill.

Leaders from both parties seem to agree that bonding will be one of the centerpieces of the 2020 legislative session, although the price tag will be the subject of much debate in the coming months.

Democrats in the House majority are floating the idea of a $3.5 billion bonding bill, while Republicans in the Senate majority are touting their desire for a fiscally constrained package that will spend less than $1 billion.

Details of House and Senate proposals will likely be revealed sometime after the 2020 legislative session gets underway next month.

Uphill climb

Bonding bills require a three-fifths majority (60%) to pass the Legislature, so leaders will have to work for bipartisan support to reach final passage of a capital investment package.

That said, the second, even-numbered, year of the legislative session has historically been when large bonding bills are passed, so a significant bonding package seems likely in 2020.

Expect final negotiations on a bonding bill to last until the very end of the 2020 session. It typically is one of the last bills passed before the Legislature adjourns for the year.

City-specific projects

The governor’s proposal also contains hundreds of projects requested by local units of government. Although the League does not weigh in on individual city bonding provisions, its Intergovernmental Relations (IGR) staff members are available to help city officials navigate the advocacy process at the Capitol.

If you are planning a visit to St. Paul to champion your city’s bonding requests, be sure to take advantage of the League’s free parking provided to member city officials. If you do park at the League, please check in at the reception desk.