CHICAGO — New Minnesota Gov. Mark Dayton called on lawmakers Monday to support a proposed $1 billion capital bonding budget he billed as an economic stimulus package needed to create jobs while improving infrastructure.
Dayton — a member of the state’s Democrat-Farmer-Labor Party — unveiled a package that designated funding for $531 million worth of projects.
He invited the Republican-controlled Legislature to pick projects for the remaining $470 million of funds available in the proposed bill.
Most of the funds would come from general obligation borrowing.
“Studies estimate that a billion dollars of public bonding, when aimed at 'shovel- ready’ and 'paint and repair’ projects, such as those in my proposal, can create up to 28,000 private sector jobs,” Dayton said in a statement. “I urge them [lawmakers] to act swiftly to pass this bill. Every day delayed is another day when unemployed Minnesotans are left sitting, rather than working.”
Under Dayton’s plan, the University of Minnesota would receive $226 million, including funds for its physics and nanotechnology facility.
A new St. Paul Saints ballpark would receive $20 million in assistance and the Target Center in Minneapolis, where the National Basketball Association’s Timberwolves play, would receive $8 million for improvements.
About $28 million would fund flood-hazard mitigation projects in various cities and towns, and Coon Rapids would receive $16 million for a dam improvement to prevent the spread of invasive species.
Various cities would receive funding to support civic center upgrades. Some projects were vetoed from last year’s bonding bill package by former Republican Gov. Tim Pawlenty, who did not seek re-election.
Whether the package — or some form of it — wins legislative approval is up in the air. Republicans have not ruled out passage of a major capital bill, but have said the $6.2 billion budget deficit is a priority and the majority caucuses are likely to butt heads with Dayton over how to erase the red ink.
Dayton, who will present a two-year budget in two weeks, has said he wants a balance of revenue hikes and spending cuts. Republicans are opposed to tax increases.
The House last week cut about $1 billion in spending and the Senate is expected to vote on the legislation this week. Dayton has criticized the bill which extends $800 million in temporary spending cuts imposed last year. The bill also calls for state agencies to trim $200 million from their budgets.
The governor and Legislature typically pass a two-year operating budget in odd-numbered years along with a modest capital budget.
Work on a larger package, known as the bonding bill, is reserved for even-numbered years. Minnesota has a self-imposed cap on debt that limits outstanding principal to 3.25% of personal income.
It previously limited debt service to 3% of general fund revenue, but had bumped up against that limit and so changed the policy in late 2009. The proposed borrowing to support the new capital budget would not exceed the revised state bonding limits.
Minnesota’s $4.2 billion of general obligation debt is rated AAA with a stable outlook by Fitch Ratings and Standard & Poor’s, and Aa1 with a stable outlook by Moody’s Investors Service.
No new GO sales are scheduled until the summer.
Minnesota’s next revenue forecast will be released March 1. The state operates on a $57 billion budget.