A nearly billion-dollar battle?

The anticipated late-February capital investment bill showdown between the Legislature and Gov. Tim Pawlenty is still on track.

Approved Feb. 11 by the House Ways and Means Committee, HF2700 is expected to be on the House floor Feb. 15.

Sponsored by Rep. Alice Hausman (DFL-St. Paul), the bill calls for $999.8 million in general obligation bonding.

“This bill is one bright spot in a gloomy economy, one little thing we can take advantage of. Interest rates are low and construction bids are coming in one-third or more lower than projected, meaning the taxpayer dollar can go much further this month if we don’t delay,” Hausman told the House Capital Investment Finance Division Feb. 9. She added that much of the money triggers federal, local and private matches.

A companion, SF2360, sponsored by Sen. Keith Langseth (DFL-Glyndon), was passed 52-14 by the Senate Feb. 9. It calls for $999.96 million in general obligation bonding.

However, both are about $314 million more than proposed by Gov. Tim Pawlenty, who, on numerous occasions, has reiterated his preference for a smaller bill in tough economic times.

In a Feb. 9 letter to Hausman and Langseth, Pawlenty called the House and Senate bills “unaffordable, irresponsible, and filled with local projects,” and again threatened to veto the entire package, rather than line-item veto projects he does not support.

“Minnesota Management and Budget calculated a debt planning estimate of approximately $725 million in general obligation bonding capacity for the 2010 bonding bill,” Pawlenty wrote. “In light of the state’s structural deficit, this additional fiscal burden is clearly unwise.”

Supporters note the bill is well within new debt service guidelines set forth by MMB.

Nonetheless, Rep. Mark Buesgens (R-Jordan), at the Feb. 10 House Finance Committee meeting, encouraged Hausman to involve the governor’s office as the bill moves forward to create a bill that can be signed. He also said legislators’ priorities are misplaced, saying the state should solve its anticipated $1.2 billion biennial budget deficit before “we take out our credit card.”

Another potentially problematic issue is that neither bill includes $89 million to expand the sex offender treatment facility at Moose Lake, something the governor wants.

In addition to the “daunting amount,” Hausman said other options are being discussed, such as using other facilities that are currently empty. “Are there more cost-effective ways to deal with this certainly overcrowding situation? (This is) not opposition, but hoping that there might be other answers on the horizon.”

A historical perspective

As she began her presentation to the House Capital Investment Finance Division, Hausman, a former teacher and one-time history major, provided a look back.

“In the panic of 1857, even before we were a state, Minnesota’s economy tanked. The credit market was frozen and there was no available capital to speak of,” she said. “The state’s leaders knew that getting railroad construction on track in Minnesota was critical to needed economic development to help move the state out of the throes of the worst economic depression of the 19th century. When the first Legislature convened in December of 1857, it immediately passed legislation authorizing the state to let bonds for railroad construction.

“I think it sets the context that in times of serious economic circumstances since Minnesota became a state, smart bonding initiatives have been the driver of economic development initiatives that have made our state what it is today. Now, more than ever, we should follow through on that tradition, and build the infrastructure necessary to make our state competitive in the future,” she said.

Who gets a slice ?

As is tradition, higher education is proposed to get the largest slice of the pie. The House bill contains $322.7 million, including $100 million in asset preservation.

“When you invest in higher education … we are providing the facilities that are going to train the workforce of the future,” Hausman said, noting many institutions are feeling the crunch of more people going back to school in current economic times.

The bill has money for 25 academic renovation or construction projects within the Minnesota State Colleges and Universities system, including $26.9 million for a bioscience and health careers center addition at North Hennepin Community College, $5.67 million for a science lab renovation at Southwest Minnesota State University and $5.5 million for a shop space addition for mechanical technology and carpentry programs at NHED Mesabi Range Community and Technical College in Eveleth.

The bill seeks $20 million to renovate 103-year-old Folwell Hall on the University of Minnesota’s Minneapolis campus, but nothing for a physics and nanotechnology building. Pawlenty wants $53.3 million for this. The Senate bill has $5 million in planning money.

Hausman doesn’t believe anyone is opposed to the physics and nanotechnology building, but noted that the university ranked Folwell Hall higher on its priority list.

Another large – and potentially timely – chunk is $50 million for flood hazard mitigation and prevention, but it may not be enough. Pawlenty’s proposal is also at the $50 million level; the Senate $70 million.

The House bill has $26.5 million divvied up between 13 projects across the state, and $23.5 million for four Red River Basin impoundment projects.

Rep. Morrie Lanning (R-Moorhead) said the impoundment project funding will cover all requests submitted from his area, but only one project has a direct impact on flooding level in Moorhead and surrounding areas.

“That leaves $26.5 million for all the other flood mitigation requests that there is. There is $109 million of requests. Just to have the money necessary to match the federal requirements on four of the projects would require the state to come up with $25 million.” He said that would leave 22 communities to fight for what little is left.

“Our problem is huge, and this bill is a good, positive step in the right direction, but there is this issue that the $26.5 million is going to be well short of taking care of a lot of important, needed projects,” Lanning said.

Forecasters recently warned that the Red River Valley is ripe for more severe flooding this spring after a wet fall and a snow total equal to last year.

Zoos fare well in the House bill, to the tune of $32.5 million. Only the Minnesota Zoo is in the Senate and governor proposals.

The Minnesota Zoo would receive $21 million for its master plan implementation and asset preservation, Como Zoo would receive $11 million for improvements and the Lake Superior Zoo would get $500,000 to help with asset preservation and exhibit renewal needed to achieve accreditation.

“I don’t think any other portion of the bill involves quite so many visitors,” Hausman said. “When you add those up, probably 4 million people go to these sites every year. It’s a huge addition to the livability and education in our state.”

Other highlights of the House bill are:

• $158 million for transportation and transit, including $67 million for local bridges;

• $126.6 million in employment and economic development, including $57 million for civic centers in Mankato, Rochester and St. Cloud;

• $60 million for clean water and wastewater infrastructure;

• $50 million for a transit capital improvement program; and

• $21 million for state trail acquisition and development.