Pawlenty proposes $897 million bond plan

  • Article by: Patricia Lopez and Dane Smith
  • January 18, 2006 - 12:04 AM

From the state's first commuter rail line to a buffed-up Minnesota Zoo, from a $40 million science building at the University of Minnesota to wastewater and road projects, there's something for everyone in the $897 million public works bill proposed by Gov. Tim Pawlenty on Tuesday.

He called the proposed borrowing plan "reasonable," saying, "this is a very good-sized bill." But Senate DFlers said it comes up short, and will offer $1.04 billion in capital investment proposals when the legislative session opens in March.

Senate DFLers in particular want more spending on the Minnesota State Colleges and Universities (MnSCU) system.

Pawlenty earmarked $289 million for the state's two higher education systems -- $127.6 million for the University of Minnesota and $142.5 million for MnSCU.

That figure almost certainly will rise, because House Capital Investments Chairman Dan Dorman and Senate Capital Investments Chairman Keith Langseth agree that MnSCU needs more.

Dorman, R-Albert Lea, noted that MnSCU serves twice as many students as the university system.

Langseth, DFL-Glyndon, called the inadequacy of the MnSCU allotment "extremely glaring."

Richard Pfutzenreuter, the university's chief financial officer, praised Pawlenty's recommendations.

They include funding for business school buildings, a new science center and $40 million to upgrade old buildings. But Pfutzenreuter said officials are very worried that Pawlenty recommended only $4.3 million for a proposed $40 million medical bioscience building that is intended to make the state more competitive in that field.

"We are trying to compete with places in the country that are moving much faster than Minnesota," Pfutzenreuter said.

And while Pawlenty devotes more than $200 million to water, agriculture, environment and natural resource projects, some said that wasn't enough either.

"Once again, the governor is ignoring the value of parks and trails to a $10.2 billion segment of our economy," said Judy Erickson, government and community relations director of the Parks and Trails Council of Minnesota.

Erickson said more than 8 million people visit the state's parks and trails annually, yet Pawlenty's proposal offers only a third of the $31 million requested by the state Department of Natural Resources.

Borrowing costs will rise

Pawlenty, in releasing his proposal, noted that he had received $2 billion in requests, despite a near-record bonding bill of $963 million last year.

"Some attempt to live within reason would be appreciated," he noted dryly. Requests for local projects have grown steadily, he said, as have projects for pure "amenities," such as sports, arts and regional event centers.

To discipline such requests, Pawlenty said he wants guidelines that would require such projects to have at least half their support come from somewhere other than the state, and to demonstrate regional significance and local support.

But Langseth, while noting that some of Pawlenty's proposals seemed a bit richer than necessary, also said that Pawlenty and Republican leaders like to come in low to look like fiscal conservatives but that they privately want and expect DFLers to restore projects, especially things such as arts and cultural amenities in the Twin Cities.

"They depend on us to do things for them," Langseth said.

Pawlenty has been announcing individual elements of his bonding bill over the last 10 days. One new piece that surfaced Tuesday was $21 million for the Minnesota Zoo, which would allow for upgrades and the next phase of its master plan. Pawlenty said he also wants $10 million for the Red Lake School District, which had requested $55 million. The $10 million, he said, "is to signify that we want to work with the Red Lake Nation, but ... we need to get the plans in sharper focus."

Debt service on Pawlenty's bonding request would cost taxpayers only $6 million next year, but nearly $50 million by the 2008-09 budget period, said Finance Commissioner Peggy Ingison. That's because bonds are issued slowly and the debt service grows over time, she said.

The state's November economic forecast originally had built in a bonding bill of $560 million, she said, but increases in the state's revenue projections allowed for a bigger one.

Of the Senate DFLs higher figure, Pawlenty said he thought his proposal was "enough" but did not outright say he would veto a larger bill. "We're looking for ways to work with the Legislature on this," he said.

While they are not part of the bonding proposal for the coming year, Pawlenty said he also wants proposals for a Gophers football stadium and a Twins baseball stadium to pass the Legislature this year.

Staff writer Mary Jane Smetanka contributed to this report. Patricia Lopez • 651-222-1288 Dane Smith • 651-292-0164

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