You’d expect there to be a yawning chasm between the list of public works the governor wants funded and any that the Legislature might propose. After all, he’s a Democrat, while the House and Senate are predominantly Republican.
But what became apparent Wednesday when the Senate Capital Investment Committee brought forth its bonding bill was an almost Himalayan-sized valley between the House and the Senate. Aren’t these folks supposed to be on the same side?
The Senate’s bill would provide $496 million in bonding for projects across the state, with a heavy emphasis — $179 million worth — on higher education.
“This measure focuses on bricks and mortar with an eye to the future,” said Senate Majority Leader David Senjem, R-Rochester, who chairs the committee. “There are a good many reasons for this bill at this time: low interest rates, needed infrastructure enhancements, balanced projects and prudent investment. This is the right bill at the right time.”
Those are brave words because only a few days earlier, the House’s Capital Investment Committee approved a vastly smaller $280 million bonding bill, and some Republican members on the committee seemed grumpy about authorizing that much. The committee had also already approved $220 million in bonding to renovate the state Capitol.
So, $280 mill plus $220 mill equals $500 mill, and they’re only $4 mill apart, right?
Wrong. The Senate’s version allocates only $25 million to make some repairs to the Capitol building. And just to make it a little more confusing, I have to remind you that the governor has already proposed a list of bonding projects totaling about $775 million, not including dough for the Capitol overhaul, which he plans on adding later. (All that’s not to mention $398 million for the Vikings stadium, which, for the moment, appears to be going nowhere but could rise from the undead before the Legislature adjourns).
No easy choices
The obvious discrepancies between the Senate and House bills, however, must be ironed out — or, in this case, steamrollered — into one proposal in a conference committee before negotiations with the governor can begin. Laughter broke out in the crowded hearing room when LeRoy Stumpf, DFL-Plummer, asked Senjem: “Do you have any insight on how this and the House bill will come together?”
Senjem was silent for a moment, then responded, “Just fine.” More laughter.
In fact, Senjem seemed somewhat defensive about his bill. The committee had reviewed $2.6 billion worth of requests from agencies and citizens to fund various projects.
“They were not easy choices,” he said, adding, “We’re in the middle,” meaning between the governor and the House. And the Senate’s proposal, unless it straps on $200 million or so for a Capitol renovation, stays well within the guidelines that bond houses and Management and Budget have set for the state’s full-faith-and-credit bonding — in other words, what can reasonably be repaid from the General Fund.
You needn’t know the formulae to consider yourself a good citizen, so suffice it to say that M&B says that the 10-year average used for forecasting debt authorization has been $775 million for even-numbered years and $140 million for odd-numbered years. Starting last year, M & B upped the forecast to $225 million in odd-numbered years bringing the bonding guideline for the biennium to about $1 billion.
Rep. Larry Howes, R-Walker, chair of the House Capital Investment Committee, said he kept his bill to $280 million. That, plus the $497 million in projects authorized last year, would take the borrowing for the biennium up to $777 million. Add in the Capitol funds, and voila, you’re at a billion. The Senate’s total for the biennium would equal $993 million, but without Capitol renovation.
So how do the two bills differ?
For starters, the Senate lavishes some $40 million more than the House on MnSCU projects, most of them for campuses in the Twin Cities metro, where the vast majority of students live. The House bill had pretty much skipped the metro schools, except for one $1.5 million project at St. Paul College. The Senate exceeded the governor’s recommendation for the DNR by $1 million to bring the total to $56 million; the House’s allocation was $21 million. Almost across the board the Senate plumped up the House’s bare-bones recommendations, from $38.5 million to $43.5 million in Transportation, from $8.1 million to $12.9 million for the Metropolitan Council, and so on.
Differing views on economic development
Perhaps the most significant differences came in the two committees’ approaches to a category called “Employment and Economic Development.”
The House authorized $46.3 million in bonding; the Senate, $77.8 million. (The governor, who views public works as a way to spur employment, asked for $161 million.) The Senate would contribute $32 million to build a civic center in Rochester that would host medical meetings and conferences and offered $10 million for another civic center in St. Cloud. But it ignored Mankato, which has been lobbying for years for help in creating its own civic center. (The House gave a token $1 million only to St. Cloud.)
Pleas from Kathy Sheran, DFL-Mankato, to fund the project were heard but ignored. She and other legislators asked Senjem to put in $1 million as a place-holder so that the project could at least be discussed in the conference committee, but he demurred.
When Sheran then suggested taking $1 million from another civic center and assign it to Mankato, just to keep the Senate’s bill total the same, Senjem squirmed in discomfort. Clearly, he wanted to be helpful, but if he put it in, he said, “I have fears of having problems. We’re getting too heavy in civic centers,” adding “This is very tender, gentle stuff. I’m not sure the House will accept any civic centers.”
And therein lies the philosophical divide between the House and Senate.
The House, at least as currently constituted, views bonding as the means to build, repair and maintain basic infrastructure — highways, dams and college labs and buildings. Its strict-budget constructionists believe that building civic centers, rebuilding Nicollet Mall, (Minneapolis’ biggest priority) or creating a regional ballpark in St. Paul should be the province of local governments, not projects undertaken by the state.
The Senate, however, has approached bonding more practically, recognizing that some projects could boost business and ultimately fill the state’s coffers with taxes from increased economic activity. But it has acted warily, accepting a project here and there, but tamping down on others, for example, the mall project and the baseball park, neither of which were funded.
After the hearing, a reporter asked Senjem how difficult it will be to negotiate with the House.
“Very challenging,” he said. “But I’m hopeful.”