Ahead of legislative session, Walz pitches $982 million in public construction projects

Published 5:15 pm Tuesday, January 16, 2024

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By Dana Ferguson

Gov. Tim Walz rolled out his $982 million plan Tuesday for public construction projects, a package that spans from prison fixups to dedicated busway expansions to projects that better connect Minnesotans to their natural resources.

The second-term DFL governor said that after approving a massive $2.6 billion bonding package last year and with tighter economic times on the horizon for Minnesota, the state should take on a smaller list of projects in 2024.

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He emphasized the ongoing need to fund the construction and maintenance projects. Projects on his list also ranged from wastewater treatment plant replacements to ice rinks to flood mitigation.

“The major focus of this year’s bonding bill is going to be making sure we’re doing those fundamental services that Minnesota depends on,” Walz told reporters, noting spending for wastewater infrastructure, roads and bridges and public safety.

He also pointed to the largest part of the bill — funding for repairing state buildings.

“The infrastructure in this state from corner to corner is one of our greatest assets,” he said. “It also is irresponsible to not make sure you’re keeping up the maintenance on those whether it’s the higher education at our colleges and universities, or whether it’s some of those infrastructure in communities.”

One of the bigger single projects in the Walz framework is $22.4 million for a new headquarters building for the Minnesota State Patrol that would include training space and evidence storage areas. A $16 million request would help pay for remodeling of a key building at the Minneapolis Veterans Home.

“This is a year to focus on reinvesting in taking care of the state properties that taxpayers already own,” Minnesota Management and Budget Commissioner Erin Campbell said. “We need to invest in these assets now to begin to address the $6.4 billion in deferred maintenance of state infrastructure. Investing in our facilities is the fiscally responsible thing to do.”

More than $7.6 billion worth of state agency and local projects had been pitched to lawmakers ahead of the announcement.

Walz’s proposal is set to kickstart debates over a capital investment bill at the Capitol. The bill is the top priority for lawmakers as they tee off the legislative session next month.

And the bill will drive unique negotiations, as it takes three-fifths support from each chamber to allow the state to take on debt. That means Republican and Democratic votes are required.

Minnesota Management and Budget has said lawmakers could sell bonds to the tune of about $830 million this year and still remain fiscally sound.

DFL leaders also set aside about $800 million in cash last year for additional capital investment spending. While the move was viewed as a backup, in the event they couldn’t reach a compromise with Republicans, much of that funding has been eaten up by inflation, said Senate Capital Investment Chair Sandy Pappas, DFL-St. Paul.

“Right now, most of the bottom line dollars are going toward inflation. So we’ll have a very limited amount of cash this year,” Pappas said.

Pappas said her committee would focus on asset preservation, along with local projects that have picked up support from local lawmakers. But she warned that legislators wouldn’t be able to please everyone.

“We have a huge backlog for infrastructure needs, you know, roads, bridges, wastewater, clean water in particular. And I think that it’s going to be difficult for the state to meet all those needs, and take care of state buildings,” she said.

Trades union representatives and local government leaders were on-hand Tuesday to voice their support for the governor’s plan.

Republican lawmakers said the state should prioritize a smaller capital investment bill than what Walz put forward. And that should focus more on local community projects, rather than state agencies, they said.

“I was a little disappointed in that. We had over $7 billion worth in requests. And over $3.5 billion of those were from local communities. Yet in his proposal, there’s a lot for state agencies,” said Sen. Karin Housley, R-Stillwater. Housley is the GOP lead on the Capital Investment Committee. “I feel like it’s not quite balanced.”