Walz calls for $3.3 billion in infrastructure spending
The Minnesota Legislature failed to pass a significant public infrastructure borrowing bill during the last session, leaving many local projects on hold.
ST. PAUL — Minnesota Gov. Tim Walz is calling for the Legislature to pass a $3.3 billion public infrastructure plan to pay for road and water projects and to preserve existing state assets.
The Legislature failed to pass a significant public infrastructure borrowing bill, also known as a bonding bill, during the last session, leaving many local projects on hold. Joined by state and local officials and labor at St. Paul Regional Water Services on Thursday, Jan. 26, Walz said lawmakers should move forward with a proposal this year to finance needed maintenance on state infrastructure.
“Minnesotans understand that when you invest in your people and you invest in your infrastructure, you create opportunities for economic growth and a high quality of life,” the governor said. “The time of gridlock is over and the time for getting things done is now.”
To pay for capital projects across the state, Walz is proposing a mixture of borrowing and cash payments. The governor says he wants $1.9 billion in general obligation bonds, $900 million from the general fund and $250 million in appropriation bonds. The state has a record $17.6 billion surplus, opening a possible path for many of the projects to be paid for with cash rather than borrowing.
What does Walz want?
Close to 40% of the proposed spending and borrowing, $1.2 billion, would go toward preserving existing state buildings, bridges, roads and other infrastructure. That includes buildings on the University of Minnesota and Minnesota State campuses as well as Department of Natural Resources facilities.
Walz is also calling for $650 million for roads, bridges and water infrastructure. Of that amount, $222 million would go to local water infrastructure grants and loans; $144 million would go toward local bridge replacements; and $108 million would go toward local road replacements.
Addressing housing and homelessness makes up another significant chunk of the proposal. If lawmakers agreed to Walz’s plan, the state would put $470 million toward affordable housing projects and $90 million toward renovating and replacing veterans homes in Hastings, Preston, Montevideo and Bemidji.
Other pieces include “community and equity” investments totaling more than $520 million, $200 million of which would go to “communities that have been traditionally excluded from capital investments.” Environmental projects like flood mitigation, local stormwater construction grants and bus rapid transit would get more than $312 million.
Last year, the state got more than $5 billion in requests from agencies, local governments and higher education institutions for bonding requests. A bill granting more than a billion dollars of those requests had started to materialize, but lawmakers in a Legislature divided between Democratic-Farmer-Labor and Republican control never got it past the finish line. Walz’s last bonding proposal called for $2.7 billion at the beginning of the 2022 session. Traditionally, the Legislature tries to pass bonding bills in even-numbered years.
Walz Bonding Proposal 2023 by Alex Derosier on Scribd
The Coalition of Greater Minnesota Cities, which represents more than 100 cities outside the Twin Cities metro, welcomed the governor’s bonding proposal. One of the biggest priorities for the organization this session is to secure more funding for local projects, which smaller communities often struggle to afford.
“Governor Walz’s water infrastructure proposal is great news for the entire state,” said Thief River Falls Mayor Brian Holmer, president of the coalition. “Hundreds of greater Minnesota communities are currently facing issues with aging water treatment facilities and the need to make expensive upgrades to protect our waters.”
Water infrastructure spending proposed in the governor’s bonding request also includes state funds to unlock matching federal funds for removal of lead service lines in cities across the state.
At the opening of this session, many lawmakers of both parties expressed optimism at the prospects of getting a bonding bill passed, though it can be tough to get one to the governor's desk as they require a three-fifths majority backing a proposal in both chambers.
Walz’s $3.3 billion bonding proposal does not have support from Senate Republicans. In a statement, top Capital Investment Committee Republican Sen. Karin Housley, R-Stillwater, said the Democratic governor’s proposal would place significant debt on future taxpayers.
DFLers have floated the idea of using the state’s enormous surplus to pay for projects in cash instead of bonding, circumventing the need for Republican support. Democrats, who now have complete control of state government after winning a majority in the Senate, would be able to pass spending with simple majorities. Housley in her statement said that would be “a terrible disservice to the state.”
“If Democrats decide they don’t want our support for a bonding bill and pass a cash bonding bill instead, it will be because they failed to compromise, and an abuse of their one-party control,” she said.
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