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The Legislature doesn’t have to pass a bonding bill in 2015. But it will

The budget rule is pretty serious in Minnesota. The rules around bonding? Not so much.

DFL Sen. LeRoy Stumpf, the lead on that chamber’s Capital Investment Committee, imagines any bonding deal this session would come in around $500 million.
MinnPost photo by Briana Bierschbach

During the 2015 session, Minnesota lawmakers don’t have to pass a borrowing bill for construction projects, commonly known as bonding. That’s because legislators work under a system that requires them to pass a budget bill in odd-numbered years and a bonding bill in even-numbered years.

The budget rule is pretty serious: If a two-year budget isn’t passed by the end of the odd-year session, lawmakers risk shutting down state government.

But the rules around bonding? Not so much.

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The even-year session rule has been broken fairly consistently for the last several decades, with a bonding bill passed nearly every year since the early 1980s. DFL Gov. Mark Dayton is already calling on legislators to pass an unusually large $850 million bonding bill this session, even though it’s an off year, and Senate Democrats are open to passing some kind of package too.

Even the Republicans in control of the state House — some of who philosophically oppose the idea of borrowing on the state’s credit card — admit that history seems to be pointing to another off-year bonding bill in 2015.

12 years of bonding bills
Even though bonding bills are only supposed to come in even years, over the last decade the legislature has passed one almost every year.

“We don’t have to have a bonding bill. There is no requirement. The government won’t shut down if we don’t have one, and there’s a number of members in my caucus who aren’t interested in bonding,” GOP Rep. Paul Torkelson, the new chair of the House Capital Investment Committee, said. “But if you look at history year in and year out, we have a larger bill in the even years and smaller one in the odd years.”

Democrats want maintenance

The current budget allows room for $225 million in bonding this year, but that could go up if the next budget forecast, scheduled to be released in late February, adds even more money to the state’s $1 billion budget surplus. Dayton wants to go well over that in his bonding bill, pumping most of the money into repairs and new construction projects on college campuses across the state. He also wants to use about $150 million in bonding to pay for buffer zones he's proposed along Minnesota waterways.

But DFL Sen. LeRoy Stumpf, the lead on that chamber’s Capital Investment Committee, imagines any bonding deal this session would come in around $500 million. Odd-year bonding bills are typically smaller than even-year bills, but together they tend to round out to about $1 billion in projects over the biennium.

“There’s always need,” he said, noting that Minnesota Management and Budget received nearly $3 billion in bonding requests from local governments and state agencies ahead of the 2014 session. “There are problems that crop up from the last bill or there are things that need to be changed.”

He’d like to pass a bonding bill that prioritizes a backlog in projects in state agencies, which he said get pushed to the bottom of the pile when road, bridge and other infrastructure projects come up. One of the first on his list would be needed fixes and camera upgrades at the state’s security hospital in St. Peter.

“There’s always been a bonding bill. I think there will be a bonding bill, the question is size and what’s in it,” Stumpf said. “We should take this opportunity ... to address the maintenance of public buildings.”

Republicans, roads and bridges

But road and bridge projects in greater Minnesota would likely need to fit into a bonding bill as well, especially with Republicans in control of the state House. 

The list of projects in a bonding bill almost always creates friction in the legislature, especially between rural and metro lawmakers. That’s because borrowing bills have a high bar for passage: they need a three-fifths majority to pass in the House and Senate, meaning votes will be needed from both parties.

But bonding bills have also proven to be a way to break political gridlock. A $500 million odd-year bonding bill requested by Dayton helped put an end to a 21-day government shutdown in 2011. Dayton, Senate Democrats and House Republicans are facing a hefty debate on a transportation package this session, and some of those plans include bonding for roads and bridges.

“Roads and bridges is almost a for sure,” Stumpf said. “There’s a lot of stuff that needs to be taken care of. Whether it’s a big bonding year for roads and bridges will depend on whether we pass a way to pay for it. I think you will find the House majority wanting to take general fund money and use that as debt service for highway bonds.”

Torkelson said bonding could be one part of a transportation package. “In the big picture we are going to do the best we can to address the needs for transportation this biennium. I believe it will be a transportation package, it won’t be just bonding or just something else,” he said. “I think everybody is talking about transportation and it would be a disappointment for me and for my constituents if we don’t do something on transportation this biennium.”

Slow process

Torkelson also notes that the bonding process is a slow one. He’s just started hearing proposals for different projects in his committee, and state government usually gets hundreds of different projects to review. Stumpf says he’s done some of that leg work already, as he spent the better part of last winter and spring traveling across the state to tour different projects.

And there will almost certainly be an additional bonding bill next year that legislators need to consider. Dayton said his bonding proposal this year doesn’t preclude him from proposing another large bill in 2016.

For his part, Torkelson is giving himself some time to get familiar with his new role.

“I have people coming to me everyday with bonding proposals,” he said. “I’m listening to everyone and making promises to no one.”