Dayton says debt-backed construction would boost state jobs

Gov. Mark Dayton on Tuesday called for $842 million in state borrowing to fund dozens of public construction projects all over Minnesota, saying the cost of the debt would be worth the economic jolt it would deliver.

"My proposal would put thousands of Minnesotans to work throughout our state," Dayton said at a Capitol news conference, laying out a hefty wish list of bonding projects that includes more than $200 million for construction projects on public college campuses, $32 million to renovate the 10th Avenue Bridge in Minneapolis, money to replace or refurbish transportation and utility infrastructure, and dollars for dozens of local economic development projects.

But state lawmakers reacted coolly to Dayton's proposal, with Senate DFLers advocating a slimmed-down project list and House Republicans questioning the need for it entirely.

"We are not looking to do a bonding package this year," said House Speaker Kurt Daudt, R-Crown. "But we will certainly look at these projects through our bonding committee and include the worthy ones next session."

Leveraging the state's debt capacity for public construction projects statewide is a bipartisan Capitol tradition, and Dayton has been a particularly spirited advocate for expensive bonding bills that take advantage of sustained low interest rates. While lawmakers do some amount of bonding nearly every year, typically more ambitious bonding proposals come in the second year of the two-year budget cycle. Last year Dayton and lawmakers approved a $1.2 billion bonding bill.

House Republicans, who stepped into the majority in January, said they want more time between this year's session and next to vet the nearly $2 billion in requests that Dayton winnowed to $842 million.

"What we haven't had a chance to do is really properly evaluate those projects, and that's what we've typically done in past legislative interim periods, and that's what I anticipate doing again this coming interim," said Rep. Paul Torkelson, R-Hanska, chairman of the House Capital Investment Committee, which assembles the bonding bill.

"The budget is our priority this session," Bakk said.

Dayton was uninterested in legislative custom. Framing his proposal as a "jobs bill," the DFL governor cited an academic formula to argue that his plan, if fully enacted, would create 23,900 jobs in Minnesota, primarily in construction fields. He said the state's presently positive economic circumstances justify an ambitious approach.

"I think this is a perfect opportunity," Dayton said. "Interest rates are low, we have a budget surplus, and there are all these projects backed up."

Servicing the bond debt necessary to enact Dayton's entire project list would cost $78 million from the state treasury. Dayton said private businesses often look to capital investments as a fundamental strategy for generating greater economic activity — an approach he said the state should mimic.

"These are wise investments, they're sound investments," Dayton said of his proposal. Of the total projects list, 43 percent are in outstate Minnesota, while 38 percent are in the seven-county Twin Cities area. An additional 19 percent are classified as having statewide impact. About a quarter of the projects are at colleges and schools, including a total of $140 million to the University of Minnesota and MnSCU for physical improvements to their campuses.

Cooperation from legislative leaders will be vital if Dayton is to get even a portion of his proposal. In order to issue the debt necessary for bonding bills, both the House and Senate must approve the package with three-fifths majority votes. Even as he downplayed chances for a bonding bill this year, Daudt did not dispel the notion that Dayton's request could be in play in the flurry of negotiations that accompany the end of the legislative session. History could work in Dayton's favor. He noted in his news conference that of the last 32 years, there was only one in which the state did not pass a bonding bill.

"Anything's possible at the end of session, right?" Daudt said. "That's what they tell me anyway."