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Labor and city leaders joined Senate Democrats Thursday to call for a $1.35 billion investment in Minnesota infrastructure projects, which would fund water treatment plants, city sewer expansions and road and bridge repairs.
But the House, which is evenly split between Republicans and Democrats, has agreed to spend up to $700 million on infrastructure projects — around half of the Senate DFL target.
DFL House Leader Melissa Hortman said Monday the House target could change in negotiations with the Senate and governor.
Known around the Capitol as a “bonding bill,” the Legislature typically funds public works projects with borrowed money in even years; the Constitution requires a 60% supermajority for passage, which means the bill requires robust bipartisan support. Bonding bills raise money for infrastructure projects by directing state agencies to sell off bonds; the state then pays back the bond holders over time, with interest.
“At a time when the federal government is slashing funds for community projects, it’s more important than ever that state lawmakers support these shovel-ready projects,” said Sen. Sandy Pappas, DFL-St. Paul, who chairs the Senate Capital Investment committee.
There’s another reason lawmakers may feel more pressure to pass a bonding bill immediately: Congressional Republicans are considering changes to tax law that would cause interest rates on bonds to rise significantly, making infrastructure projects more expensive to finance.
Historically, the Minnesota Legislature passed a budget in odd-numbered years and a bonding bill in even-numbered years, but lawmakers failed to reach an agreement on a bonding bill in 2024.
The DFL-controlled Legislature passed a $2.6 billion infrastructure package in the 2023 session, including $1.5 billion in bonds, following three legislative sessions without an infrastructure deal.
Pappas said the inconsistency in passing bonding bills has created a backlog in the list of projects; water and sewer plants across the state are aging out at the same time, she said.
In a statement, Sen. Karin Housley, R-Stillwater, the top Republican on the Capital Investment committee, said Republicans want to pass a bonding bill this session.
“Working together will be crucial to avoid trying to beat the clock at the end of session,” Housley said. “Rather than borrowing as much as we can, we should make sure that every dollar borrowed is well-spent on the most important and necessary projects.”
Labor unions back the bonding bill because it would create new jobs for blue collar workers; cities want the bonding bill to pass because they rely on state funds to complete local projects.