Deal points to $850M bonding bill

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House Capital Investment Chairwoman Alice Hausman said the four legislative caucus leaders agreed to spend about $1 billion on bonding for the 2013-2014 biennium. This year, after efforts to pass a major capital investment bill ran aground, they eventually passed a compromise bill worth $156 million.

Gov. Mark Dayton has said he’d like to see a bonding proposal that hits $1 billion next session. He’ll be working to whittle down an anticipated $3 billion or more in total requests this fall. Legislators typically pass large bonding bills in even-numbered, non-budget years.

But Hausman already foresees complications to the agreement made by legislative leaders in the final days of session.

Hausman crafted an $850 million bonding package of bonding projects last session that included funding for three civic center projects, parks and trails, higher education and a number of small projects in individual legislators’ districts. But bonding bills require a supermajority to pass, which meant Hausman and Democrats had to attract eight GOP votes over and above their 73-member majority to pass the proposal in the House. Her bill fell five votes short of passage with only days left in session.

Lacking the House votes to pass the larger bonding bill, which included $109 million for repairs to the Capitol, Senate Majority Leader Tom Bakk ultimately crafted a smaller 2013 bonding bill that included Capitol restoration and struck a deal with Senate GOPers to pass the proposal. That left House leaders scrambling to pass their own bill in the final hours of session. The final bonding bill included the Capitol restoration package, a veterans home in Minneapolis and a handful of other projects. It passed off the floor with a 121-10 tally, but Hausman wasn’t on the floor to cast a vote.

“I was so unhappy with the process last year,” she said. “We did zero bonding for higher education; we did zero bonding for housing. Those are already in the queue and the projects just get bigger. Isn’t it reasonable to think we can’t just do what we were going to do last year, we have to do what we were going to do last year plus a little more?”

Capitol cost estimate rises

Hausman is worried about what now appears to be a growing cost estimate for the final Capitol restoration project and an all-new Senate office building. The Department of Administration is now requesting $126 million in bonding for the final phase of the Capitol project next year, a nearly $30 million increase from the $94 million originally projected as sufficient to finish the project. The additional cost figure came after experts analyzed the exterior of the Capitol and recommended additional repairs to ornamental stone pieces jutting out from the building.

“The scope of the project has changed, and the bulk of that is in the exterior stone and repair,” Department of Administration spokesman Curt Yoakum said. “It was decided by the end of session that the final designs and planning should include $29.5 million for additional work to be done.”

That extra money could have gone to smaller projects around the state, and it complicates what the total figure for the bonding bill should be, Hausman said. “You could do 20 smaller projects around the state for that price,” Hausman said. “They will have to convince me that they need that.”

Hausman is also concerned about costs associated with a new office building for the Senate, which was included in the omnibus tax bill in the final hours of the 2013 session. The bill appropriated $3 million to design the new building and allowed the state to enter into a lease-to-purchase agreement with an outside entity.

“[Lease purchasing] is a more expensive way to go, and it does count against one of our guidelines, so if we do that, there’s something else we don’t do [in the bonding bill],” Hausman said. “I’d like to have the discussion about bringing down the cost of that project if we can.”

Dean: cautious assent

For his part, Rep. Matt Dean, the lead Republican on the House Capital Investment Committee, says he is still closely watching the state’s credit limit on bonding and doesn’t want to exceed that figure next year.

“We are definitely concerned about the overall shape as well as the size of the bill, but we look forward to working with Rep. Hausman and the Democrats to reach an agreement,” Dean said. “We would want a bill that would be very diverse in terms of spreading out good projects around the state and projects that can be transferred into work quickly and involve many trades.”

The final bill could look similar to the proposal Hausman drafted this year. It’s about the right size, and Republican leadership requested that no projects in GOP districts be removed from the bill, Hausman said. “They want to protect members for not voting for the bill this year,” she added. Hausman expects the 2014 bonding bill to include three long-put-off civic center projects in St. Cloud, Mankato and Rochester.

“I think it’s reasonable that we reach some kind of an agreement,” she said. “But the governor, the House and the Senate need to be working together. There’s no reason why we shouldn’t be talking to each other this time.”