Capital Investment

Last session the bonding bill appropriated $825 million in GO Bonds. When accounting for all funds the bill appropriated $1.57 billion.

 

What has happened in this issue area since last session?

Of the total appropriation of $1.57 billion in the bonding bill, $98 million from the Environment and Natural Resources Trust Fund (ENRTF) is being tied up in litigation. As a result, Minnesota Management and Budget will not issue bonds funded by the ENRTF until the issue is resolved.

 

What is expected to happen this session?

Legislators may attempt to appropriate $98 million in GO Bonds instead of relying on funding from the environment and natural resources trust fund to pay off the bonds.

 

Bonding

Large bonding bills are typically done in the even years of the legislative biennium. Odd years are dedicated to developing budgets for state government. In budget years bonding bills have become law but they are typically more focused on core infrastructure projects, or respond to natural disasters.

While the 2018 bill was passed and signed into law it did contain some provisions that were troubling to some legislators and citizens. The article in the bill that was the most problematic appropriated $98 million in appropriation bonds from the Environment Natural Resource Trust Fund for water related infrastructure projects and parks. The projects themselves are not in dispute, but the funding mechanism for the projects is concerning for some people.

Those opposing this funding mechanism argue that the projects are worthwhile, but the funding source is objectionable and possibly unconstitutional. Several groups have filed a lawsuit against the State of Minnesota. In response, Minnesota Management and Budget has stated that they will not sell the bonds for the projects funded by the Environment and Natural Resource Trust Fund until the legal issues are resolved. Those who support the funding mechanism have maintained that water infrastructure projects are within the parameters of the law and should be able to move forward.

Some legislators will likely attempt to remedy the issues outlined in the lawsuit by substituting the funds for the projects this legislative session. However, it is not clear if the changes will be agreed upon in the Legislature.

Senate DFL Media