Dueling Capital Budgets

The Senate yesterday approved a state capital budget and the House is expected shortly to follow suit with its version of the spending plan.

The legislative versions, like Gov. Tim Pawlenty’s, are sized around $1 billion, but they differ in the projects to receive funding. The House and Senate are led by Democrats while the governor is a Republican.

In its proposal released Monday, House members said their focus was on projects that would create jobs quickly, with about 40% earmarked for college campus improvements. The bill also provides funding for several convention center expansion projects, zoo exhibits, and hiking and biking trail improvements.

Republicans unveiled their version last week, also with a focus on creating jobs and spurring the economy. The bill would provide about $270 million for state college campuses, several convention center expansions like the House bill, and arena projects. 

Both chambers’ proposals contain very limited funding for transportation and bridge projects because of their inclusion in a separate bill, while the governor’s plan favored funding in those areas. The Legislature last month overrode Pawlenty’s veto of a $6.6 billion transportation funding package.

All three packages would be funded primarily with a general obligation borrowing in the coming years. However, the final size may be limited as Minnesota abides by a cap that limits debt service to 3% of general fund revenues — and the latest state forecast predicted a drop in revenues that results in a nearly $1 billion deficit in the current biennium.

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