Governor Submits 2018 Bonding Recommendations

The governor’s proposal funds $1.5 billion in projects across the state, including funding for several state grant programs available to cities.
(Published Jan 22, 2018)

Gov. Dayton announced on Jan. 16 his detailed recommendations to fund $1.5 billion in state and local capital projects. Dayton has a statutory requirement to deliver capital budget recommendations to the Legislature by Jan. 15, but delayed it a day because of the Martin Luther King holiday.

Except for funding for the Wabasha Rivertown Resurgence/National Eagle Center project, the governor’s recommendations do not include funding for specific local projects, but do include funding for a variety of state grant programs available to cities. For example, the recommendations include $25 million to the Public Facilities Authority for state matching grants for Clean Water and Drinking Water Revolving Funds. Those state funds will match an estimated $85 million in federal funding.

The governor is also recommending $80 million in funding for the Water Infrastructure Funding (WIF) program and $62 million in funding for Point Source Implementation Grants to local units of government.

For housing, the governor is recommending $100 million in competitive grant funding for private for-profit and nonprofit housing developers via the Minnesota Housing Finance Agency (MHFA) to encourage development of affordable housing. The plan also includes $15 million for the Public Housing Rehabilitation program.

Recommendations of interest
Other aspects of the plan that will impact local units of government include:

  • $2.5 million in library construction competitive grants for compliance with the Americans with Disabilities Act (ADA).
  • $1 million for dam safety and repair projects.
  • $6 million to the Minnesota Pollution Control Agency (MPCA) to clean up a leaking hazardous waste facility in Andover.
  • $52.8 million to MPCA for the Freeway Closed Landfill Program facility cleanup in Burnsville.
  • $5 million in competitive funding to build or expand compost facilities.
  • $5 million for the Local Government Roads Wetland Replacement program.

Preliminary state and local funding requests submitted last July totaled $3.3 billion, including $2.5 billion in state agency requests and $831 million in requests from local units of government. Since the preliminary submittal in July, Minnesota Management and Budget (MMB) has worked with state agencies and local units of government to gather additional project information and refine cost estimates. The governor’s recommendations were drawn from the preliminary list of projects.

Additional funds leveraged
The governor’s project funding recommendations, which include projects to be funded with general obligation bonds and appropriation bonds, will leverage an additional $570 million in federal, local, and private funds to provide over $2 billion in investment in Minnesota’s capital infrastructure, according to MMB Commissioner Myron Frans.

The Legislature and governor approved nearly $1 billion in a capital projects bill in 2017.

The House and Senate will develop their own sets of recommendations for what could become the 2018 session’s capital investment or “bonding” bill. Legislators indicated that their proposals would likely be smaller than the governor’s recommendations.

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