Commentary: Capital bonding will bring new jobs
The Minnesota Senate took a this week toward reversing the trend of continued job losses in the state. Last week, a capital investment package worth more than $360 million passed its first committee and was approved by the full Senate on Monday with a 56-8 vote.
The investment package is expected to create thousands of jobs and begin progress on many projects across the state.
The Senate is moving fast on this bill because the arrival of spring means preparations for the warm-weather construction season are being made right now. It's important to get this funding approved, get workers hired and get dollars moving.
Lawmakers know that new jobs need to be created immediately, not a few months down the road. The most recent state economic forecast showed that between November and February, the state lost billions of dollars in revenue because of the job losses that have occurred in the state.
State Economist Tom Stinson told the Senate Taxes Committee last week that in total, projected revenues for the next two years dropped more than $1 billion during the past three months. Part of that is attributed to a drop in income-tax collections because fewer people are working.
In addition, sales tax and corporate income tax estimates also are down considerably, mostly because of the lagging construction industry, according to Stinson. Not only are people not employed in building infrastructure throughout the state; no one is buying the supplies or making the other investments that are important for driving our economy.
Stinson also told the Senate Capital Investment Committee that Minnesota will need more than the federal stimulus to get real economic recovery underway and get people working again. He said funding for projects that can begin almost immediately, such as repair and renovation of existing facilities, would be a positive step, and said that delaying construction for a year or two would simply delay the problem.
The bonding bill moving through the Senate addresses these concerns by calling for a total of $367 million invested in projects throughout the state. Of that, $329 million will come from the state in the form of general obligation bonds, and the rest will be user-financed. The state is simply taking advantage of an opportunity to responsibly borrow money in order to reinvest it in projects that will create jobs immediately and begin revitalizing our economy.
About $150 million of the bill will go toward asset preservation and other improvements to higher education facilities within the University of Minnesota system and the Minnesota State Colleges and Universities system. This is important because it not only upgrades higher education facilities, it improves the resources Minnesota is able to offer to build job skills and enhance the state's workforce. Other notable items in the bill include significant funds for flood hazard mitigation grants and nearly $37 million for transportation funding throughout the state.
Experts estimate that this legislation will create more than 3,600 jobs in the construction phase of these projects, and more ongoing jobs once renovations and facilities are completed. In addition, with the construction business suffering through the same slowdown plaguing the overall economy, and the prices of building materials dropping to levels not seen in many years, these projects can be completed at significant savings to Minnesota taxpayers.
Authors of the legislation have said they have hopes of having funding authorized and projects underway by April 1.
Rod Skoe, DFL-Clearbrook, is a member of the Minnesota Senate and vice chairman of the Senate Taxes Committee.