CHICAGO - Minnesota Gov. Mark Dayton has signed legislation that extends the state's ability to do negotiated bond sales for four years.
The provision was included among legislation Dayton signed Tuesday to authorize $1.1 billion in mostly bond-financed infrastructure spending and an additional $103 million in tax breaks.
State lawmakers had granted Minnesota Management and Budget the ability to do negotiated sales on new money and refunding general obligation sales in two of the state's last three biennial budgets but did not extend the authority in the budget approved last year.
The authority was initially granted during the financial crisis to give the state more flexibility on its bond issues. The bills signed by Dayton extend the authority to 2018. State statutes previously required competitive bidding on GOs.
Dayton signed a bill authorizing $893 million in spending on capital projects, which relies on $815 million of general obligation borrowing. He also signed a supplemental bill authorizing an additional $200 million in capital projects financed from general funds. The bill also permits the Minnesota Housing Finance Agency to issue $80 million in debt.
A separate bill signed by Dayton provides $104 million in tax breaks, bringing to more than $500 million in total reductions approved by lawmakers during their session that ended Friday. The relief comes in the form of property reductions, and individual income and business sales tax reductions.
Dayton called the capital program a jobs bill because of estimates that projects slated for assistance could create an estimated 33,000 jobs.
"These projects will put thousands of Minnesotans to work across our state," Dayton at a news conference. "Many of them are crucial to revitalizing downtown business centers, modernizing [Minnesota State Colleges and Universities] and [University of Minnesota] buildings and classrooms, and improving parks, roads, and local infrastructure."
The state is planning an annual new-money GO sale for the summer but has not settled on a size, according to Kristin Hanson, assistant commissioner for Treasury in the Minnesota Management & Budget Office. The state's $5.7 billion of general obligation bonds carry ratings in the high-double-A category.
The bonding bill package provides $100 million for state roads, bridges, and infrastructure work, $126 million to complete work on the restoration of the state capitol, $120 million for the state colleges, and $119 million for the University of Minnesota.
The Department of Natural Resources would see $66 million in investments, Metropolitan Council projects would receive $46 million, and local economic development projects including work on civic centers, infrastructure, and theater projects would receive $167 million.
The state typically passes a large bonding bill in the year after approving a two-year operating budget, although smaller bills are often also approved alongside the operating budget.
Lawmakers last year approved a $156 million program. Two years ago lawmakers approved a $566 million bonding package after Dayton asked for $750 million.
Earlier in their session, Minnesota lawmakers approved using $434 million of the state's $1.2 billion budget surplus for tax breaks and set aside another $150 million to bolster budget reserves to $800 million. The state also has a cash flow account that holds about $350 million.
Dayton pressed for the tax breaks after the state's February economic forecast lifted the state's budget surplus by $400 million to $1.2 billion. The state anticipates a $2.6 billion balance in its next two year budget but that's before inflationary increases are accounted for in spending.
Republicans, who fought Dayton's $2.1 billion income tax hike package last year, had pressed for more relief. "As the 2014 session ended, Democrats ignored recent budget warnings and continued to commit hardworking taxpayers to unsustainable spending increases, proving their priorities are wrong for Minnesota," House Minority Leader Kurt Daudt, R-Crown, said in a statement.
Dayton is a member of the state's Democrat-Farmer-Labor Party, which controls the legislature.
