Walz proposes record $2.7 billion public construction package

Minnesota Gov. Tim Walz proposed a $2.7 billion package of public construction projects Tuesday, sparking an intense debate at the state Capitol over the right size of the plan and which projects to include.

Walz said he had taken input from around the state in designing the proposal, which represents roughly half of the $5.4 billion that state agencies and local governments had requested.

"These are projects that have been vetted and talked about across Minnesota," Walz said while touring a previously approved bonding project on the University of Minnesota campus. "I’m bullish on this. I think what you’ll see is, there will be more cooperation on this than it might appear on some other things."

Debate over public construction bills lead to complicated dynamics at the Capitol, especially general obligation bonds require a supermajority vote of 60 percent in both the House and Senate. Walz's proposal includes $2 billion in general obligation bonds.

The governor's plan includes nearly $500 million for higher education projects at the University of Minnesota and Minnesota State system and $400 million for the state Transportation Department, mostly in bridges and roads. It also has $46.4 million for security upgrades on the state Capitol campus, including security kiosks, blast protection and crowd control devices.

Walz said his package "dovetails" with $6.7 billion that Minnesota is set to get from the 2021 federal infrastructure law, which will free up state resources for other projects. But there are warning signs that the path ahead will be complex. Minnesota agencies do not yet know what state matching funds will be required to unlock the federal money, the governor said.

Walz's proposal includes $276 million in cash. Asked why he did not use more of the state's $7.7 billion projected budget surplus, the governor said low interest rates make it better to borrow and spend the surplus on other priorities.

Senate Bonding Committee Chairman Tom Bakk reacted cautiously to Walz's bonding proposal, which is far higher than the record $1.9 billion lawmakers approved in fall 2020.

"It's way bigger than we've ever done," said Bakk, I-Cook. "The question is, even if I said, 'Hey, I can pass that' -- it doesn't make any difference. The House has to pass a bill first. That's really where people need to focus. What can the House pass?"

Bonding bills must originate in the House, and Bakk said the House should put Walz's proposal up for a vote quickly when the Legislature comes into session on Jan. 31.

The Senate's priorities would be addressing public safety projects, asset preservation, and deferred maintenance, Bakk said.

House Bonding Committee Chairman Fue Lee has previously told FOX 9 he wanted a bonding bill of more than $2.5 billion.

Lee praised the governor's proposal for investing in marginalized communities. Walz's plan includes $101 million in projects for minority communities, including North Minneapolis, South Asian communities in the Twin Cities, and Native American organizations.

"The recommendations put forward by the governor do just that, setting the stage for a historic investment in equity-focused projects and providing more Minnesotans with a safe and secure place to call home," Lee, DFL-Minneapolis, said in an emailed statement.