CHICAGO - Minnesota Gov. Tim Pawlenty Tuesday trimmed $200 million from the state's $925 million capital bill using his line-item veto powers, warning that the level of new general obligation borrowing sent to him by the Legislature exceeded the state's long-observed debt cap.
The line-item vetoes lowered the total size of the bill to $717 million from $925 million. "It is irresponsible to exceed the credit card limit that has been maintained by governors and legislators from both parties for past 30 years. Doing so could jeopardize our state's strong credit rating and low interest rates," the governor said in a letter to lawmakers.
Pawlenty said the latest state revenue estimates cap new GO borrowing to no more $885 million. The amount available for the capital budget was further limited to $825 million because lawmakers recently approved a $6.6 billion transportation bill that included $60 million of new GO debt.
The state has long limited outstanding debt service to 3% of general fund revenues. State officials have cited the strict cap as one of the fiscal strengths that has helped it retain two triple-A ratings.
Democrats who control the Legislature blasted some of made by Pawlenty, a Republican, especially $70 million that was earmarked for a $900 million light-rail project between downtown Minneapolis and St. Paul. Lawmakers could try to win funding for the project in a supplemental bill.
