Too much debt? Not if state uses Pawlenty’s limit

  • Article by: LORI STURDEVANT , Star Tribune
  • Updated: April 3, 2012 - 6:56 PM
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Tim Pawlenty

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"Bonding: You can't get there from here," reads a headline in the e-version of the semiweekly Capitol Report newspaper. That assessment may be a little too gloomy. But the absence of a bonding bill from Tuesday's House and Senate calendars has the Capitol buzzing about the delay in action on the session's marquee bill.

The problem appears to lie in the House, where a $280 million bill is deemed too small to win minority DFL votes and too large to get every vote in the 72-member Republican majority. It's a situation that makes the 81 votes needed to enact a bonding bill difficult to corral.

Republicans arguing for a tiny bill -- or none at all -- question whether the state can afford additional debt service. By the guidelines established several years ago by Republican Gov. Tim Pawlenty's administration, the answer is yes.

According to a Feb. 29 memorandum from Management and Budget Commissioner James Schowalter, as much as $1.9 billion in additional bond authorizations could be enacted this year without exceeding the most restrictive guideline.

(For the wonks: That's the one that specifies that total tax-supported principal outstanding should not exceed 3.25 percent of total state personal income. The total principal outstanding today stands at 2.44 percent of the $243.7 billion personal income forecast for 2012.)

Nobody is talking about a bonding bill that large. DFL Gov. Mark Dayton recommends $760 million. Last week, a House DFL minority report from the Ways and Means Committee submitted the largest bid, at $775 million.

The minority report was tabled without a vote on the House floor; it was followed by a vote on the majority report that amounted to a test vote on the bill. The total: 68-61, with only one DFLer voting with the GOP. The minority report gives GOP leaders a clear clue about what it will take to win more DFL votes.

An aside: Another way of looking at state debt is to rank the 50 states in debt per capita. Minnesota ranks eighth-lowest, according to a November 2011 analysis by the 24/7 Wall St. news service. That same service examined several messages to rank states for effective government management

On that "best-run states" list, Minnesota ranked fourth best, behind Wyoming, Nebraska and North Dakota.

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Lori Sturdevant is a Star Tribune editorial writer and columnist. Follow her blog, Minnesota Matters.

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