House and Senate negotiators approved a $925 million borrowing plan Tuesday, setting up yet another showdown this session with Gov. Tim Pawlenty over state funding priorities.
The bonding bill, which finances state construction projects and improvements and is being touted this year as a recession-fighting jobs package, as well, will need a three-fifths majority to pass the House and Senate. It is expected to reach both chambers today.
Rep. Alice Hausman, DFL-St. Paul, and Sen. Keith Langseth, DFL-Glyndon, who chaired the conference committee that reached the agreement, said the panel had accomplished the hard work of assembling a bonding package from billions of dollars' worth of requests from entities across the state.
"In this economy, putting more people to work right now is a good thing," Hausman said. "Using today's dollars for construction, and avoiding inflation in the future, is a good thing."
'Unacceptable to me'
But at a news conference, Pawlenty said that DFLers had effectively set the package at $1.2 billion, because it doesn't include $60 million in bonding already approved for transportation projects and another $233 million proposed for the University of Minnesota's bioscience initiative that he supports.
The bonding package, Pawlenty said, is "unacceptable to me." He suggested that he may veto the entire bill rather than use his line-item veto to shrink it down to size.
"We're not going to clean up their bill for them," the governor said.
Pawlenty wants a bonding bill no bigger than $825 million, which would keep it at 3 percent of the state's projected general fund revenue. That's a guideline that Minnesota has followed for more than 20 years, to help maintain the state's strong credit rating.
But Hausman said that bonding houses, such as Moody's, consider other factors as well in setting interest rates for debt: low debt service ratio, diverse industry, a healthy workforce -- and how well political factions work together for the common good.
The committee had invited state Finance Commissioner Tom Hanson to discuss the bill but approved it before he had a chance to speak.
"You just approved it?" he said. "You still want to talk to me?"
The bill came in between Pawlenty's recommended $825 million package and the proposals offered by the House and Senate, worth $960 million and $965 million, respectively.
$412 million for colleges
The single biggest recipients under the borrowing bill would be Minnesota's colleges and universities, which would receive $412 million for building maintenance and repairs, new facilities and additions.
The Department of Natural Resources would get $105 million for a wide variety of projects and acquisitions, including $30 million for flood mitigation, $19 million to buy and develop parks and recreation areas, and $15 million to buy and develop trails.
The Metropolitan Council would receive $139 million, including $70 million for the light-rail line planned to link Minneapolis and St. Paul and nearly $17 million for more park-and-ride lots and bus lanes.
The bill includes $38 million for the Duluth Convention Center, $20 million for an event center in Bemidji and $10 million for a Crookston ice arena.
The Legislature reduced or cut funding for projects recommended by Pawlenty at a number of state institutions, including the Perpich Center for Arts Education and the Minnesota Zoo.
In a statement, the governor said that DFLers had approved numerous recreation centers "but refuse to build a new nursing facility for the Minneapolis Veterans Home."
Staff writer Patricia Lopez contributed to this story.
Kevin Duchschere • 612-673-4455