The Minnesota Senate overwhelmingly passed a $1.1 billion state borrowing bill Tuesday, setting the stage for fast-track negotiations among the Senate, the House and Gov. Tim Pawlenty.
The three versions of the measure, which is often used to fund state construction projects and stimulate jobs, contain roughly the same amount of money. But the menu differs slightly in who gets funding.
A House version continues to filter its way through committees and is expected to be voted on by the end of the week.
The Senate measure passed 51-7 with little debate. Sen. Keith Langseth, DFL-Glyndon, chairman of the Capital Investment Committee, said the bill comes at the best time, both for struggling contractors interested in bidding for state work and for taxpayers worried about a souring economy.
"It helps to turn around the economy to have these people working," Langseth said. "It's the best time to be selling these bonds and constructing these projects. Doing it during booming times means the price is going to be considerable higher."
But Pawlenty spokesman Brian McClung said more work will be needed to whittle down the debt amount in the bill to an acceptable level, which traditionally does not exceed 3 percent of the state's general fund spending.
With a new, more downcast revenue forecast issued last week, that figure is about $885 million, not the $965 million in general obligation bonds in the Senate version or $960 million in the House version.
The governor's bonding proposal included a similar amount of general obligation bonds, but that plan was presented in mid-January, about a month and a half before the new forecast came out.
"Governor Pawlenty believes it's important that the state adhere to the 3 percent bonding debt limit that has been followed for decades," McClung said Tuesday. "We will work with the Legislature regarding this issue, but as it stands now, their bills will have to be reduced in size in order to be fiscally responsible and ensure that the state receives the best possible interest rate."
Key provisions in the Senate bill include $134 million for the University of Minnesota, including $48.3 million for a science center; $200 million for Minnesota State Colleges and Universities; $70 million for Central Corridor Light Rail Transit; $40 million for the Duluth entertainment center known as the DECC; $22 million for a Bemidji regional events center; and $30 million for Itasca County for public infrastructure to support Minnesota Steel expansion.
Mark Brunswick • 651-222-1636