Republicans at the Legislature are turning to an obscure state entity that gets its money from the Minnesota State Lottery to borrow as much as $100 million for public works projects.
The little-known Legislative-Citizen Commission on Minnesota Resources (LCCMR) uses more than $1 billion from a lottery-fueled trust fund to pay for environment and natural-resource projects. Now House Republicans want to borrow up to $100 million for bonds to be paid back from the annual proceeds of the trust fund.
House Speaker Kurt Daudt, R-Crown, said lawmakers could use money from that trust fund as debt service to fund large water projects or other environmental projects. The idea is still in the discussion phase, he said.
The idea could help House Republicans solve a thorny political problem. Every other year, the Legislature borrows hundreds of millions of dollars for major public works projects. Republicans have traditionally resisted going higher than $1 billion in the biennial smorgasbord of borrowing, known around the Capitol as the bonding bill.
But they also need to gather DFL votes for the bill to meet an 81-vote supermajority requirement for incurring state debt, and the DFL wants more than $1 billion for bonding. By using LCCMR bonds, House Republicans could keep the bonding bill lower than $1 billion while also appeasing DFLers who want more projects for their districts.
Rep. Josh Heintzeman, R-Nisswa, who co-chairs the LCCMR, said Republicans could amend a bill on the House floor next week. Although there would be some projects in the Twin Cities area, including repairs to the Stone Arch Bridge in Minneapolis, he said the focus would be wastewater treatment plants for cities of fewer than 5,000 residents.
Nancy Gibson, one of the vice chairs of LCCMR, said she was shocked when she found out about the idea Friday. She said the commission has people present their proposals and conducts peer reviews to determine which projects to support. This idea takes away the public’s voice, she said.
“I am really surprised that the process has not been open to the Minnesotans who voted for this. There have been no hearings, no opportunity for citizens to participate,” Gibson said.
Heintzeman said the commission voted affirmatively on a proposal to encourage the Legislature to consider bonding on wastewater treatment projects for small cities.
Gibson cited the statute, which states the trust fund is for the “protection, conservation, preservation, and enhancement of the state’s air, water, land, fish, wildlife, and other natural resources.”
Rep. Alice Hausman, the DFL lead on the House Capital Investment Committee, said she is surprised Republicans want to tap the trust fund, which would be a more expensive form of debt.
“This would be a first,” Hausman said.
Earlier this week, Senate Republicans proposed borrowing $825 million for public works and another $224 million in road-funding bonds from the state’s trunk highway fund.
In addition to their idea of using funds from the lottery, House Republicans have already proposed $825 million in public works borrowing, but with different projects from the Senate. Dayton’s plan would borrow $1.5 billion.