CAPITAL INVESTMENT

The governor and caucus leaders all believed having a bond bill was necessary. Bonding investments maintain and enhance our infrastructure, provide important investments in water infrastructure, and projects can be the catalyst for economic development in communities across the state. An additional benefit of passing bonding bills is the employment of many workers across the state, which is important with the high unemployment rate due to the pandemic.

Typically, the even year in the biennial budget is reserved for supplemental bills and a capital investment proposal. In mid-January Governor Walz released his proposal, which included $2 billion in general obligation bonds and $600 million in funding from other sources. It was anticipated this investment would leverage $3.4 billion from other sources.

There was much discussion about bonding, but little action was taken until the final weeks of the legislative session when Senate DFLers introduced a bonding bill that mirrored Governor Walz proposal but included additional investments. Shortly after, House DFLers released their proposal, which jump started bonding conversations between caucus leaders and the governor. Senate Republicans introduced their bill in the final days of session.

Provisions not passed

Senate Republican bonding proposal

The Senate Republican bonding bill failed to receive the 3/5th majority needed for passage. While the bill had good projects within it, many felt the bill was inadequate in several areas, including transit, higher education, public safety, and equity projects, resulting in its ultimate failure.

Senate Republicans failed to engage in conversations with Senate DFLers despite our best efforts to discuss a proposal that could secure the needed votes. Because of a lack of engagement, DFLers offered an amendment that included Senate Republican, Senate DFL, and Governor Walz’s priorities. Unfortunately, the amendment failed because it was not able to gain the Senate Republican majority’s support.

The Walz Administration also had a number of concerns with the Senate Republican bonding proposal. There was unworkable policy language, and the bill earmarked transportation projects. They also expressed concerns the bill did not adequality meet the vast needs across the state. (SF 3463)

First special session update

A Republican authored bonding bill passed committee but was not voted on by the full Senate. The bill appropriated $128 million more than the bill that failed during the Regular Session. While the special session proposal did include more funding, it suffered from the same challenges as the bill Senate Republicans proposed during regular session. It included earmarked transportation projects, underfunded transit and higher education, and did not include some of priorities supported by Governor Walz.

A special session agreement was never reached, so a vote never took place on the floor in either body. The chairs in the House and Senate had indicated that they will continue to work together to find an agreement that everyone can support.

Second special session update

An agreement was reached by the majority parties in the House and Senate on the money within the bonding bill, including an agreement on the use of Trunk Highway Bonds, but not on the policy language. The bill expended a total of $1.85 billion, including $1.35 billion in GO bonds. Additionally, the tax bill was amended onto the bill in the House Ways and Means Committee.

The House Republicans failed to give House DFLers the necessary votes to pass the proposal. The House Republicans want to end or alter Governor Walz’s Emergency Powers; however, they do not have a plan to continue to ensure the Executive Orders that are in place to protect Minnesotans across the state are maintained. Because they could not reach an agreement with Governor Walz despite his best efforts, House Republicans killed the bonding bill in the House. As a result, the Senate was never able to cast a vote on the bonding bill. 

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