Top priority for Legislature: fix existing stuff

ST. PAUL -- Don't expect the Minnesota Legislature to spend a ton of money on glitzy new buildings next year.The leaders of the House and Senate bonding committees say it's time to focus on meat-and-potatoes projects like repairing sewer and wate...

ST. PAUL - Don’t expect the Minnesota Legislature to spend a ton of money on glitzy new buildings next year.
The leaders of the House and Senate bonding committees say it’s time to focus on meat-and-potatoes projects like repairing sewer and water systems, fixing roads and bridges and maintaining hundreds of aging state-owned buildings before they fund new projects.
“Our top priority should be taking care of the public’s property,” Senate Capital Investment Committee Chairman LeRoy Stumpf, DFL-Plummer, said last week.
The lead Republican on the committee, Sen. David Senjem of Rochester, agreed. “We have to maintain (state property) or accept the fact that it’s going to fall apart. I don’t think anyone wants that. I think people expect that if we build something, we ought to take care of it.”
State officials use an ugly bureaucratic term - “asset preservation” - to describe maintaining state buildings, roads, parks and the like, and they acknowledge they haven’t done an adequate job of preserving the state’s stuff.
One reason for the neglect is that fixing what you’ve already got isn’t as eye-catching - or politically advantageous - as building something new. Repairing a roof, for example, isn’t as glamorous as erecting a sparkling monument.
“Asset preservation is kind of the runt of the litter,” Stumpf said. It has difficulty competing for survival with “the big puppies,” such as new college buildings, community centers and sports facilities for which elected officials can claim credit.
Maintaining public property is a big-ticket item. The University of Minnesota and the Minnesota State Colleges and Universities have requested the most construction money - $236 million and $264 million, respectively - and both systems propose to spend 42 percent of those funds on renewing existing buildings.
After the Senate committee completed a 17-day, 2,500-mile “bonding tour” of project sites earlier this month, Stumpf directed the committee staff to start drafting funding options with asset preservation projects at the top of the list, and then “work down from there,” he said.
His second priority is to complete projects that have been partially funded in the past, mostly buildings constructed in phases over six to eight years. They include the St. Cloud state prison, St. Peter security hospital and a new Dorothy Day Center campus in downtown St. Paul that will include a homeless shelter, permanent housing and counseling, health and job services.
Take care of those priorities, Stumpf said, before proposing to spend money on a long list of requests for new projects. But he knows fellow lawmakers will demand construction improvements in their districts in exchange for their votes.
Asset preservation also is a top priority for Gov. Mark Dayton, but in addition he will propose new projects in the capital budget he is required to propose by Jan. 15.
“It’s a combination of fixing what you’ve got and putting in some new stuff so that you generate new economic activity,” said Minnesota Management and Budget Commissioner Myron Frans, the DFL governor’s chief financial adviser.

Dayton’s plans

Last week, Frans and his staff delivered a thick stack of more than 270 detailed project requests to Dayton, who will spend the next two weeks sorting out the ones he wants to fund.
“We march through the entire list with the governor,” Frans said. “He works hard on it, likes to do it, and it’s extremely important.”
State agencies, public colleges and universities, and local governments have asked for more than $3.5 billion in bonding money. That tally will swell to close to $4 billion by the time late requests roll in, predicted House Capital Investment Committee Chairman Paul Torkelson, R-Hanska.
About three-fourths of applications will be turned down.
Dayton hasn’t decided how much he’s willing to spend, but Frans said, “He’s made it clear that he thinks we should do at least $1 billion in bonding.”
Republican legislators want to spend less. Last year, they set a $1 billion cap on the amount they’re willing to borrow for construction projects during the current two-year budget period. Last spring, the Legislature passed a $180 million bonding bill, leaving room for $820 million more this year under the GOP lid.
“We’re wed to that $1 billion biennial threshold,” Senjem said.
Paring down the requests is a tough challenge. Rep. Alice Hausman of St. Paul, the lead DFLer on the House bonding committee, and her long-time aide, Jenny Nash, made a trial run at it earlier this month.
“We were ruthless,” Hausman said. They hypothetically cut in half the requests of the University of Minnesota, MnSCU and the Department of Natural Resources. They only funded the top two priorities for most other state agencies. And they rejected requests to build new prison cells, lockups for sex offenders and a new state parking ramp on Capitol Hill.
Even after taking a sharp knife to the wish lists, Hausman said the price tag for the remaining, most essential projects was “well over $1.1 billion.”

Pay cash?

The state has a $1.2 billion budget surplus, and many lawmakers want to tap that pot of cash for construction projects.
That would be unusual. Like private businesses, government typically borrows money, rather spending cash, for capital improvements.
Dayton has said he is open to using some of the surplus for public works projects, but he will be very cautious about proposing to spend that money in his Jan. 15 capital budget, Frans said. State officials will have a better idea how much money is available after they receive a new budget and economic forecast in late February.
Lawmakers in both parties are eying the surplus as one source of funding for a comprehensive, multibillion-dollar transportation package. There’s a bipartisan consensus that the state must spend as much as $8 billion over the next decade to fix Minnesota’s aging roads and bridges and expand the system to meet growing needs.
Hausman will advocate spending $800 million of the extra cash on roads, bridges, railroad crossings, ports, metro transit corridors and other transportation modes.
“It’s a perfect time to spend (the surplus) on infrastructure because that is one-time spending, and then it is done,” she said. Unlike education or social programs, building projects don’t create ongoing budget obligations.
Hausman will be a key player in the bonding negotiations. While Republicans hold a majority of House seats, they will need DFL votes to reach the three-fifths supermajority required to pass a bonding bill.

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