CHICAGO - Minnesota Gov. Mark Dayton unveiled a $750 million capital bonding package Monday that provides funds for water, sewer, local government construction, housing, and transportation projects across the state as well as the ongoing restoration of the state capitol.
"My proposals will put thousands of Minnesotans back to work throughout our state," Dayton said. "It gives priority to projects that are ready to go. Many of them have been delayed for years and are needed to revitalize downtown business centers, modernize college classrooms and laboratories, and improve infrastructure throughout our state."
The state would finance the capital budget, referred to locally as the "bonding bill," with $675 million of general fund or appropriation-backed borrowing, $45 million of transportation general obligation borrowing, and $30 million in housing agency debt for a total of $750 million in state backing borrowing. The package would also authorize another $62 million in borrowing by public universities and debt supported by parking user fees.
The budget provides $137 million in grants to local governments to support projects including $35 million earmarked for an expansion of Rochester's Civic Center. Minneapolis would receive $20 million for a major street rebuilding project and $7 million for the renovation to a sculpture garden while St. Paul Children's Museum would receive a $14 million grant.
Other local government grants provide funds for a theater renovation in Duluth, an upgrade to the Iron Range Regional Airport, Mankato's civic center addition and St. Cloud's civic center expansion. Other grants help cover the costs of sewer and water upgrades, flood mitigation, and street projects.
The University of Minnesota stands to receive $100 million in support while the Minnesota State Colleges and Universities' 25 campuses would receive $89 million. Another $46 million is earmarked for transportation projects and Natural Resources are in line for $46 million in funding. Veterans Affairs projects including asset preservation and improvements to veterans' homes would receive $58 million.
The proposal provides $109 million for the ongoing capitol restoration project and $16 million for capitol parking. The renovations include replacing the roof and repairing the crumbling stone exterior, replacing the plumbing system, upgrading the mechanical and electrical systems and improving energy efficiency.
Department of Human Affairs projects would receive $55 million, the Minnesota Housing Finance Agency would receive $40 million in bonding allocation for affordable housing, and Corrections Department projects would receive $50 million.
The House will unveil its version Tuesday. Dayton, a member of the state's Democrat-Farmer-Labor Party, enjoys a DFL majority in the Legislature, but some Republican support will be needed to adopt a package as new bonding requires a three-fifths margin.
Republicans are staunchly opposed to Dayton's proposed two-year $38 billion operating budget because of its reliance on an income tax increase on top earners to raise $1.8 billion to close a $627 million shortfall and spend more on education and economic development initiatives.
The state's bonding bill last year totaled $566 million and two years ago the state adopted a $500 million package. Dayton said the state can afford the borrowing and the operating budget includes the additional $22 million in funds needed for debt service on additional borrowing.
Standard & Poor's rates Minnesota AA-plus and Moody's Investors Service rates the credit Aa1, with a negative outlook. Fitch Ratings rates the state's $6 billion of GOs AA-plus. The state last summer sold $658M in its annual new-money GO sale to fund projects approved in prior capital budgets.