State Capital Investment

The State of Minnesota’s capital budget is primarily funded by issuing state general obligation bonds.

It includes grants to local governments to acquire and improve public lands and buildings and other public improvements of a capital nature. This means projects must:

  • be for a public purpose,
  • be publicly owned,
  • have a purpose clearly set forth in the law, and
  • constitute capital expenditures.

The capital budget process begins in odd-numbered years with the collection of requests from state agencies and local units of government. The Minnesota Department of Management and Budget (MMB) issues instructions for capital budget requests in April of the year preceding its submission to the Legislature. It ends with submission of the governor’s capital budget to the Legislature in January of the following even-numbered calendar year.

MMB guides the capital investment process at every stage. MMB:

  • collects project information,
  • evaluates requests,
  • transmits them to the Legislature,
  • facilitates the governor’s decision-making process,
  • sells bonds, and
  • assists with implementation issues following enactment of a bonding bill.

In addition, it is common for project proposers to work with their area legislators to have bills introduced that authorize state bonds for the project. While these bills are not passed individually, they do draw attention to the issue and often receive brief hearings to allow the proposal to be explained.

Questions about submitting a bonding request?

To learn more about the MMB process and for guidance on submitting a bonding request, see Capital Budget FAQs for Local Governments and Political Subdivisions on the MMB website.