Bonding: On the Road Again

During summer and fall of 2017, local units of government and state agencies submitted capital investment requests (also known as “bonding”) to Minnesota Management and Budget (MMB). Requests totaled more than $3 billion, demonstrating significant need for public works projects throughout the state. The Legislature passed a $1 billion bonding bill during the 2017 Session.

Staff for the Senate Capital Investment Committee reviewed requests and organized a statewide tour to investigate the merits of projects first-hand. Statewide tours are invaluable for committee members because it gives them an opportunity to quantify the value of a project to a community and compare it to projects submitted from elsewhere in the state.

The size and scope of a new capital investment bill remains to be seen. Governor Dayton released a $1.5 billion bonding capital investment proposal in January 2018, but Republican leaders have expressed little appetite for spending more than $1 billion. As a result, as many as two-thirds of projects will likely not receive requested funding. The House and Senate capital investment committees have not released their proposals yet but are expected to do so soon.

A byproduct of making these important investments is direct job creation for people in local communities and indirect job creation for local building suppliers. For example, Governor Dayton’s proposal would create 22,950 jobs across the state. The core theme of his proposal is centered on investments that would maximize the longevity of existing infrastructure.