It’s about jobs and equity


Rep. Alice Hausman (DFL-St. Paul) is reading the financial pages of the newspaper more than usual these days. Although she’s aware of the problems facing bond insurers, as chairwoman of the House Capital Investment Finance Division, her focus is getting a capital investment bill onto the House floor, maybe even by the end of next week.

It’s been no secret that the House majority is determined to get two bills quickly onto the governor’s desk; the transportation bill and a capital investment bill.

The urgency, according to Hausman, comes from the state’s projected deficit; recently released numbers showing a decline in the number of jobs in the state; and the worsening national economy.

The state can’t do too much about some of the root causes of the economic turndown — the price of oil and the housing and credit troubles, she said. “Most of these problems will require federal solutions, but we think we can do something about jobs.”

She said enacted transportation and capital investment bills can kick-start the process.

“We didn’t want to dilly-dally around and not get that money out there. If that transportation bill passes and the bonding bill passes and we can get them to the governor by March 15, that money could be out there and carpenters and trades people would be put back to work.”

Hausman set an aggressive goal for finance division chairs to get their bonding bills heard, prioritized and wrapped into a proposal by Feb. 21.

Beginning Feb. 25, the proposals are scheduled to be heard in the House Capital Investment Finance Division, which would begin crafting the bill for consideration. “Our job is to figure out what we have room for this year,” she said.

Division members will be looking for regional equity and equity between the various interest areas of need, such as education, transportation, and health and human services, she said. “We’ll try to put together a balanced bill that addresses the highest priorities.”

She’ll also be looking for bills that need to move forward because there is a deadline for a federal matching grant, such as the central corridor transit project.

How much to spend?

When the February Economic Forecast is released Feb. 28, the projected $373 million deficit for the current biennium is expected to grow. Generally, the amount available for a bonding bill is determined at that time. Historically, it is capped at 3 percent of the General Fund. But Hausman said that number is not carved in stone, and she left open the possibility that the capital investment bill may deviate from the practice.

“Way back when Rudy Perpich was governor, he said we should have some sort of guideline to keep our borrowing in check, and they arbitrarily arrived at 3 percent of the General Fund. It’s not in our constitution, it’s not in statute; it’s not even a rule. It’s an informal guideline,” she said.

She prefers the calculation be based off debt as a percentage of personal income ratio. Hausman said that in 2004, the national average for debt as percent of personal income was 2.4 percent; in peer states, it was 2.9 percent. Minnesota was at 1.8 percent.

“So to say that we absolutely can’t spend one penny over the 3 percent of the General Fund, is in some sense irrelevancy,” she said.

However, this may not be a battle she is willing to wage at this time, and she expects the division’s bonding request to come in near or at the governor’s goal of $965 million in general obligation bonding.

There are similarities between the House and the governor’s priorities, but she questions his stipulation that no local projects be included when a Duluth arena project is in his request.

“It would have been easier if he hadn’t put it in, because once you put it in, it’s harder to argue with other cities that their projects don’t have merit. That equity thing is what cities watch for,” she said.

Division members traveled the state this summer reviewing projects and she said the locals were “thrilled when we came to town … it was front page news.” To dismiss their projects as pork “insults the average Minnesotan.” There is a good in helping many of these so-called local projects, she said.