ST. PAUL — Although Minnesota legislators have hit the road to visit proposed building project sites for decades, governors have not conducted “bonding tours” on their own — until now.
Gov. Tim Walz will announce on Wednesday, Oct. 16, that he’s breaking the mold by launching a two-month, statewide tour of sites of public works projects that state agencies and local governments are asking the governor and state lawmakers to fund next year.
“I hope to see these projects firsthand,” Walz said in an interview Tuesday.
In addition to visiting the sites, he said he and Lt. Gov. Peggy Flanagan will “get out there and make the case to the public … so that Minnesotans know that this is a good investment in things that belong to them.”
It will be the first such tour by a governor “to my knowledge,” said Minnesota Management and Budget Commissioner Myron Frans.
Walz and Flanagan will start their tour Wednesday with a visit to the University of Minnesota’s Institute of Child Development building on the Minneapolis campus. The University of Minnesota is asking the state for $29.2 million to renovate the 106-year-old structure and tack on a new four-story addition.
The institute is “considered the premier department for the study of child and adolescent development in the United States,” university officials wrote in their budget request. But it’s housed in “insufficient and shabby space” that is “now an acute problem.”
Or as Walz put it, the institute’s faculty and staff are producing “world-class outcomes (in) a second- or third-rate facility.”
Requests grew $2B in 2 years
The governor and Flanagan are still working on a schedule to tour other projects, but they said they plan to hit every corner of the state.
They have plenty of projects to check out. State agencies and local governments have requested a record $5.3 billion for public lands and buildings. That’s up from $3.3 billion from applications two years ago.
Walz said it’s too early to guess how much bonding money he’ll request. That’s one reason for the fact-finding tour.
He has until Jan. 15 to propose a capital budget — called a bonding bill because most of the money will come from the sale of general obligation bonds to be repaid with revenue from income, sales and other general state taxes — to lawmakers. Recent legislatures have appropriated around $1 billion every two years for public works projects.
Expect big borrowing request
Walz said the size of his request “will probably be a historic number because the need is historic.” The state simply hasn’t been taking care of the lands and structures it owns, and that stuff is wearing out.
Two years ago, a state assessment of state-owned facilities — nearly 7,500 buildings and 26,000 other structures — estimated the cost of catch-up maintenance, restorations and replacements at $8.2 billion over 10 years.
Frans said that figure has grown to $8.8 billion. And that figure does not include money sought by cities, counties and other local government entities for “deferred maintenance” projects.
As a result, Walz said, he probably won’t seek money for glitzy new sports facilities or school buildings.
“There’s nothing really exciting” in the funding requests, he said. “A water-treatment plant is not the sexiest thing in the world.”
Areas in critical need
While the administration is not yet ready to propose funding specific projects, Frans said they see three broad areas of critical need:
- Water projects. In 2017, the Minnesota Pollution Control Agency identified $5 billion in local sewer and water system needs statewide. Some 95% of that money is needed to repair or replace aging treatment facilities.
- State colleges and universities. The University of Minnesota and the Minnesota State higher-education system have requested nearly $600 million in bonding funds, with the bulk sought for “asset preservation” to, in Frans’ words, “keep their facilities safe and reliable.”
- Local roads and bridges. Cities, counties and townships don’t get much money from state gas taxes, license tab fees or motor vehicle sales taxes, so they rely heavily on state bonding funds. One indication of their needs: Cities and counties have identified 920 structurally deficient bridges that need to be repaired or replaced over the next five years. That would cost $573 million.
Walz: Time to act is now
Walz asserted that making a big investment in public works projects now is the “fiscally responsible” thing to do.
Minnesota has been able to sell bonds at historically low interest rates — 2.2% or lower in August — because it has strong credit ratings. But Frans said, “Credit rating agencies look at our infrastructure needs … and if we don’t take care of our buildings, if we don’t make sure that communities have safe water, safe roads and safe bridges, they note that.”
Walz said fiscally conservative lawmakers need to realize they must take care of state facilities to avoid higher borrowing costs in the future. “Those who would claim they’re fiscally responsible by not doing bonding actually put our credit at risk. They make us less creditworthy and less fiscally secure,” he said.
Public input to be sought
In addition to launching the first bonding tour by a governor, Walz and Flanagan will announce another first. They will create a state website that lists all the bonding requests submitted by local governments and state agencies and allow citizens to post comments on those projects.
“We’ll do that so we can hear from people directly about the needs in their community,” Flanagan said.