Dayton bonding bill features $100M in U funds

The current proposal pumps money into civic centers, downtown revitalization and higher education.
February 01, 2011

Gov. Mark Dayton unveiled half of a $1 billion bonding bill Monday that includes $100 million in University of Minnesota project and maintenance funding.

Despite Dayton’s call for lawmakers to fill in the remaining $470 million in projects — a move he himself referred to as "unusual" — Republican legislative leaders instantly shot down the plan.

The bill would essentially be a $1 billion loan for infrastructure improvements. But Republicans made it clear they would only consider bonding for emergencies and flood relief.

The current proposal pumps money into civic centers, downtown revitalization and higher education.

Included in Dayton’s plan is $51.3 million for a roughly $80 million Physics and Nanotechnology building at the University and $12.5 million in bonds for Central Corridor Light Rail Transit line laboratory mitigations.

"Challenging budget times mean it’s more important than ever that the investments we do make are smart and benefit Minnesota’s economy," University President Bob Bruininks said in a statement. "All of this will enable us to more efficiently and effectively deliver on our mission, which is essential to Minnesota’s economic competitiveness."

College of Science and Engineering Dean Steven Crouch said the nanotechnology center would allow University researchers to capture more grants, attract more graduate students and hire additional undergraduates.

"It’s jobs now for construction and jobs later," he said.

The building, currently in its infancy, could be ready for construction this summer. Last session, the DFL legislative majority allocated about $4 million to begin designing the lab, and the University put about $2 million of its own money behind it.

On top of cross-departmental research on the nanotechnology front, Crouch said businesses could use the new facility to expand research and create jobs.

The $12.5 million for light rail mitigation will cover half of the University’s estimated cost for the changes. Most of the funds would be burned up in moving large magnets from a single lab.

Former Gov. Tim Pawlenty supported the measure last session after line-item vetoing more than $300 million — including many projects present in Dayton’s plan — from that session’s bonding bill.

The University requested the money during drawn-out negotiations with the Metropolitan Council, the transit agency administering the Central Corridor. The University had filed a lawsuit with concerns over the line’s potential impact on research laboratories located along Washington Avenue.

The bonds were included in an agreement signed in September that had Pawlenty’s backing.

"We’re very pleased that Gov. Dayton has included this in his proposal and is keeping faith with that promise," Vice President of University Services Kathleen O’Brien said.

The bulk of Dayton’s plan focuses on such "paint-and-repair" projects across the state, he said. It allocates $35 million in Higher Education Asset Preservation and Replacement funding to maintain buildings across the University system.

Last session, the University received a $100 million bond allocation that included $56 million in HEAPR funds.

Rep. Bud Nornes, R-Fergus Falls, the House Higher Education Committee chairman, has previously said he supports HEAPR funding in a bonding bill.

The University will also go after two projects — the American Indian Resource Learning Center in Duluth and the Itasca Biological Station — that Pawlenty vetoed last session, O’Brien said. Combined, the state’s share would be about $10 million.

O’Brien said the University’s projects are ready to go, a point Dayton said was critical to choosing what to fund.

Dayton, who reiterated his "jobs, jobs, jobs" message, said he hopes the proposal will pass in the coming weeks, although it currently doesn’t have any legislative sponsors.

Dayton contended a $1 billion bonding bill could create up to 28,500 jobs.

Republicans: Bonding a no-go

It quickly became clear that Dayton would have to push a heavy proposal up a very steep hill. Republican opposition to his plan is resolute.

Bonding isn’t a "gift card" for the Legislature to use freely, said House Majority Leader Matt Dean, R-Dellwood.

"It’s taxpayer dollars," Dean said.

The Republican leadership steered discussion toward solving the state’s $6.2 billion deficit and creating jobs rather than government spending that they say might not reap any benefits until years in the future.

"We need to focus on the here and now," Dean said.

Sen. Geoff Michel, R-Edina, said Dayton should streamline the permitting process for businesses to stimulate the economy.

Odd-numbered years in a biennium are traditionally reserved for the budgeting process, and Republicans wasted no time in criticizing Dayton’s priorities while the economy is still sluggish.

"We are not going to get out of the 2011 session with more taxes and more borrowing," said Michel, the Senate Jobs and Economic Growth Committee chairman.

But bonding proponents say interest rates are low enough that the process doesn’t add significant costs for the state.

"The concept of bonding in the state has been poisoned by campaign rhetoric," said Rep. Alice Hausman, DFL-St. Paul. "The people of Minnesota have to be sort of reeducated for why you do it."

Republicans also criticized some of the projects Dayton proposed, especially more than $50 million for civic centers in Mankato, St. Cloud and Rochester.

"It’s the wrong time to get out the credit card," Dean said.

Dayton’s defense, from a Monday press conference: "It puts people back to work this year, rather than waiting until next year."

Although some Republicans have already put forward small proposals to authorize bonding in their district, the GOP leadership said the caucus doesn’t support earmarks.

When asked if his district would be getting a new civic center, Sen. Dave Senjem, R-Rochester, said it could wait.

Before any new bonding is considered, the roughly $1.5 billion in outstanding projects from previous bills should be examined, GOP lawmakers said.

That will be a priority for Rep. Larry Howes’, R-Walker, House Capital Investment Committee, which focuses on bonding.

What now?

Hausman, who has already proposed a nearly $1 billion bonding bill, said she would have liked to see a "clear vision" from the governor, instead of this "unusual approach."

Hausman’s legislation contains about $30 million in additional projects for the University that were not included in Dayton’s plan. She also expressed disappointment that transportation corridor and arts funding remained absent.

Hausman originally thought Howes might carry the bill. Howes said this was a possibility, but other ranking Republicans said a DFL lawmaker might carry it.

The future of the bill remains uncertain. Dayton, who took a gamble presenting the plan this way, said that within reason, he’d accept almost any bill lawmakers gave him.

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