Exhale, everybody: House passes bonding, cash packages

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Negotiations throughout the week brought late accord

The roughly $70 million Lewis and Clark Regional Water System project turned out to be what it looked like from the outset – the principal key to passing an $850 million bonding bill in the Minnesota House.

Lawmakers in the lower chamber passed the infrastructure package – plus $200 million more in supplemental cash appropriations for construction projects – early Friday morning with relatively little debate and strong bipartisan support. Democrats needed eight Republican votes in the House to reach the three-fifths supermajority threshold required to pass borrowing legislation.

The water pipeline for Republican-held southwestern Minnesota had become the most visible and emblematic project in the bonding bill this session. “From the beginning we had concerns about Lewis and Clark not being funded beyond the first phase [of the project],” said House Minority Leader Kurt Daudt, who voted against the plan, after the successful 92-40 vote. “That was probably the biggest issue.”

In the end, legislative leaders crafted a deal that uses creative financing to fund the pipeline and another key building priority at the University of Minnesota – an ongoing allocation for the $51.5 million James Ford Bell Natural History Museum and Planetarium project in St. Paul. That project was a top priority of House Capital Investment Committee Chair Alice Hausman.

The water project was funded with $22 million in cash, and the deal further provided for the use of local bonds that are two-thirds state funded and one-third locally matched.

Lawmakers also reached agreements on the tax and supplemental spending bills by the wee hours of Friday morning, and those measures now must go for floor votes.

Rumors of a deal floated through the Capitol throughout the evening on Thursday, and House Speaker Paul Thissen said he was confident the bill would pass when it was brought up. “We reached an arrangement,” he said following the vote on the House floor.

The bonding bill’s passage – the hardest work for Democrats – comes at the end of a biennium that has been fraught for purposes of capital investment. Last session, an $800 million bonding bill from Hausman failed on the House floor. A 2013 handshake deal to keep the proposal to $850 million this session hamstrung Democrats from funding a significant number of projects, and as late as Wednesday, Daudt said publicly that the plan that emerged from House and Senate DFLers wouldn’t get GOP support.

“Enormous relief,” Hausman said of her mood after the measure passed. “People were back here guessing, the staff who had worked with me. Interestingly, one said 91 and one said 93 and it was 92 [votes], so they came pretty close. Huge relief.”

Late maneuvering

A couple of critical late-stage tweaks to other bills helped smooth the way for the bonding package.

Sitting in the House retiring room on Wednesday, Thissen, Daudt and other lawmakers were trying to figure out how to fund the Lewis and Clark pipeline if the entire cost wouldn’t fit in the bonding bill. House Taxes Committee Chairwoman Ann Lenczewski got involved at that point, suggesting a reduction to a proposed hike in Local Government Aid (LGA) to fund the state share of the project that remained after the $22 million in the cash spending package. Local taxes authorized in the bill would fund the rest of the borrowing.

Hausman and Gov. Mark Dayton had originally proposed to put $20 million toward the project in the borrowing bill, but that proved insufficient to secure a deal. The long-term funding for the project is now included in the House supplemental Tax bill from this session.

“The clock’s ticking,” Lenczewski said hours before the House gathered to take the bonding vote, just after the Taxes Conference Committee had run through the proposal. “We think it’ll help the bonding bill pass because we’re solving a big priority for the governor and for everybody else.”

Thissen affirmed that the understanding helped the bill move.

“The most important thing was figuring out how to fully fund the Lewis and Clark [pipeline], and getting that provision into the tax bill allowed us to move forward,” he said after it passed.

The Bell Museum and Planetarium was another project that got removed from the bonding package and resurfaced in a different bill.

As part of the agreement that House and Senate Democrats released Wednesday, the University of Minnesota agreed to let the bonds for the $51.5 million museum proposal if the state would pay debt service. Toward that end, lawmakers added $3.5 million each year in extra state aid from 2016 to 2041 to their supplemental budget bill to fund the project’s debt service.

Bonding package changed little

The bill changed very little from the original the agreement that House and Senate Democrats unveiled on Wednesday, Hausman said.

At the time, Thissen said Democrats had added $80 million in Republican projects to draw in support from across the aisle. Also included in the package was $126 million for renovations to the state Capitol, plus $56.3 million for the state Security Hospital in St. Peter and $7.4 million for the Minnesota Sex Offender Program, both key priorities of Dayton’s.

The package includes roughly $240 million for higher education, including $119.3 million for the University of Minnesota and $120.7 million for the Minnesota State Colleges and Universities (MnSCU) system.

Another top priority for Dayton involved money for a series of projects in regional centers across the state, which were funded through a companion bill that will spend roughly $200 million. The Rochester Mayo Civic Center is getting $35 million – which should help net the two Republican votes necessary to pass the package through the Senate – an events center in Mankato will receive $14.5 million, and a convention center in St. Cloud is earmarked for $11.5 million.

The cash supplement bill also included $15 million for the Department of Natural Resources and more than $50 million for transportation projects. Ultimately it passed 82 to 50 with little discussion, and Daudt said some Republicans probably supported the measure because it also contained the $22 million for the Lewis and Clark project.

The bonding bill also funds a renovation of Nicollet Mall in Minneapolis to the tune of $21.5 million.

In the end, Democrats got significant GOP support for the infrastructure bill. Though some lawmakers rose to speak out against the level of borrowing, Rep. Anna Wills, R-Apple Valley, was one of few to criticize the bill for not including a project in her district.

Afterward, Daudt said he was pleased to hear the Toxic Free Kids Act was not included in the supplemental budget finalized early Friday. Whether that measure was traded away by House leadership for a bonding accord was the subject of widespread speculation Thursday night.

“They weren’t necessarily linked,” Daudt said of the bonding bill and the toxics-labeling provision. “But that was part of our overall, global, ‘let’s get out of here in a decent amount of time’ discussions. There are controversial issues that likely won’t come up because I think they understand in the last few days here that we need to get done in an orderly amount of time.”

Afterward, the chief sponsor of the Toxic Free Kids measure, Rep. Ryan Winkler, DFL-Golden Valley, took to Twitter to write, “Still confused–was Toxic Free Kids defeated by Senate DFL or traded by House DFL leadership as GOP claims?”

House and Senate lawmakers have said they want to adjourn Friday, but as of Friday morning it remained unclear whether that would happen. Monday, May 19 is the constitutional deadline for adjournment.