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If it was up to DFL Rep. Alice Hausman, Minnesota lawmakers would pass a bonding bill next session, and they would pass it fast.

Session will bring early bonding pressures

Rep. Alice Hausman, DFL-St. Paul, wants the Legislature to move quickly on a bonding bill. “If we move early, we can take advantage of interest rates that are still low,” she said. (Staff photo: Peter Bartz-Gallagher)

Key DFLers want to push early package; Republicans balk

If it was up to DFL Rep. Alice Hausman, Minnesota lawmakers would pass a bonding bill next session, and they would pass it fast.

The 12-term St. Paul lawmaker is the incoming chairwoman of the House Capital Investment Committee, and she’s currently making her pitch to fellow Democrats. She has a likely ally in Gov. Mark Dayton, whose office has said he would like to see bonding for several key projects during the 2013 session.

“Everyone knows that education and infrastructure are the things the government has to do for a sound economy, and we have some catch-up to do in some areas,” Hausman said. “If we move early, we can take advantage of interest rates that are still low.”

Large capital investment bills typically happen in even-numbered years, but that tradition was thrown out the window last biennium, when Dayton and the then-Republican majorities brokered a budget deal to end the 2011 government shutdown that included a $533 million bonding bill. Republicans passed an additional $496 million bonding bill last session.

Hausman says it’s too soon to put a dollar figure on a possible package for 2013, but she didn’t hesitate to describe her desired bill as “robust.” By her account, the last two bonding bills have failed to include much-needed bonding for transit projects and wastewater and higher education infrastructure. In addition, the pricey Capitol restoration project will likely need another bond sale to keep it moving. Hausman hopes the two chambers and governor’s office will draft a single bill and pass it before the February budget forecast, when work to solve a projected $1.1 billion budget deficit will begin in earnest.

“The public has always asked, ‘Why do you always wait until the last day and then cram everything in?’ ” Hausman said. “That’s because no one wants to give up their power in a global deal until the very end. To me, this is a stand-alone bill.”

Chasing Republicans

Incoming freshman Democrats from across the state have echoed her desire for a bonding bill. Edina Rep. Paul Rosenthal would like to see a “big” bonding bill, while Iron Range newcomer Jason Metsa, who is replacing Tom Rukavina in the chamber, said he is looking forward to a “good strong bonding bill,” and would like to sit on the Capital Investment Committee.

But Hausman’s main obstacle in promoting any bonding package will be to add Republican votes to the cause. The election took away Republican lawmakers’ ability to dictate terms on budgeting and policy decisions, but the GOP still retains clout in bonding, where the Democrats don’t quite have the three-fifths margin required for passage. The DFL would need to gain at least eight Republican representatives and two senators to approve a bonding package in each chamber.

That fact has some Republicans warning against any early deal-making on bonding. “At this point, it is a lever for us. It is a negotiating item. I don’t know if the Democrats look at it that way, but it’s certainly something that we have to trade. We don’t have much more than that,” outgoing Senate Majority Leader and Capital Investment Chair Dave Senjem said. “I haven’t looked at it that way, but it’s a reality. We can offset some bonding bill votes for some budget concessions. That’s the way this place works and has for 100 years.”

Incoming Senate Minority Leader David Hann pooh-poohed the idea of passing another bonding bill this session, but says Senate Republicans are reserving judgment until they see a specific proposal. “The last two years, we’ve had about a billion dollars of bonding plus another half billion for a Vikings stadium,” Hann said. “It seems like we’ve had a significant amount of money invested in public works. Given the uncertainty with the economy, this would not be the time to look at incurring a larger amount of debt.”

Hann certainly doesn’t foresee a bonding bill passing before February. “To me, passing bonding legislation before the forecast doesn’t make any sense at all. You would at least want to know the final forecast before you start passing any bills.”

The main obstacle will be earning votes from enough House Republicans. House Minority Leader Kurt Daudt came down firmly against any bonding package before the February forecast. “Not going to happen,” he said. “We are committed to balancing the budget before borrowing money.”

“We definitely want to work with the Democrats on balancing a budget in this biennium, and we are really committed to doing that,” Daudt added. “We are certainly open to a bonding bill, but I don’t think we should be talking about that now.”

Elizabeth Wefel, who lobbies on bonding issues for the firm Flaherty & Hood, says there are still a lot of “unknowns” in terms of how the new Republican minorities will operate. “Obviously the bigger hurdle is in the House with a higher number needed,” she said. “But there are certainly some very good projects that need funding and are in Republican districts. I think it could happen.”

Even Senate Democrats are quiet on whether they support a bonding bill next year. Senate Capital Investment Chairman LeRoy Stumpf declined a request for comment, and Senate Spokesman Amos Briggs says there has been no talk yet of bringing a bonding bill into the mix.

No shortage of projects

Hausman and other bonding bill advocates argue that there is no shortage of projects on the table to craft a large bonding bill.

That was demonstrated this summer, when 90 projects were submitted to get a piece of a $47 million pot of grants through the Department of Employment and Economic Development (DEED). The money was set aside in the 2012 bonding bill. But many projects were snubbed through both processes, including civic centers in Rochester, Mankato and St. Cloud.

Judy Johnson, director of government affairs with the TwinWest Chamber of Commerce, says the group will push funding for the Southwest Light Rail Corridor and improvements to Interstate 494 if a bonding bill comes up this session.

“We have clearly been supportive of bonding for light rail among other transportation projects out in the western suburbs. I’ve got to imagine there are projects around the state that would be critical and get some Republican support,” she said. “The time is now to do something. We do not want to risk the federal funds for Southwest LRT, and projects like 494 have been in the queue for 10-plus years. The needs are definitely there, and the business community supports this kind of infrastructure.”

The other elephant in the room is the Capitol restoration project, which received $44 million to start work as part of the bonding bill last session, but will need more to keep going. Hasuman says the project will likely need more than $100 million in bonding this year, and Dayton has put the project high on his bonding wish list.

“I know there are Republican districts and the business community who want this [bonding] bill, and all the major metropolitan chambers [of commerce] want it,” Hausman said. “I think there is a way.”

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