Minnesota state agencies and local governments are asking the 2022 Legislature for a record $5.5 billion for public infrastructure projects. But they’re virtually certain not to get all they’ve requested.
As required by law, those public entities submitted their preliminary capital budget requests to Minnesota Management and Budget, the state’s finance department, last month, and MMB forwarded those requests to legislators on Thursday.
The asks include funding for college campuses, sewer and water systems, roads and bridges, state offices and institutions, parks and trails and other public infrastructure. Much of the money would go for “asset preservation,” i.e. maintaining the lands and buildings that state and local governments already have.
State and local officials always ask for more money than they eventually get in what is known as a bonding bill. In 2019, for example, those officials asked for $5.3 billion for construction projects, while Gov. Tim Walz and the Legislature passed a $1.9 billion bonding bill in 2020 that provided 36 percent of the amount requested.
Of the total amount requested for next year, $4.2 billion is from state agencies, including the University of Minnesota and the Minnesota State college system, and the remaining $1.2 billion is from cities, counties and other local entities. The agencies and local officials have until mid-October to refine their final requests.
Then Walz will start to pare down the wish lists. He must propose his capital budget to the Legislature by Jan. 17. In the meantime, the House and Senate capital investment committees and Walz administration officials are likely to conduct bonding tours to visit sites and hear from proponents of projects proposed around the state.
REQUESTS TO BE REVIEWED
In a letter to legislative leaders, MMB Commissioner Jim Schowalter noted that the requests are preliminary and have not yet been reviewed by his agency or Walz. He said state finance officials will “develop additional project information and refine cost estimates” over several months before the governor submits his bonding request to lawmakers.
Next year’s requests are higher than in the past, in part because lawmakers did not pass a bonding bill this year. It was only the third time in more than 30 years that the Legislature didn’t vote to borrow money, through the sale of bonds, to fund public works projects. (They did, however, approve issuing $100 million in “housing infrastructure bonds” to help finance a range of affordable housing projects across the state.)
The lack of a big bonding bill this year wasn’t surprising because lawmakers traditionally focus on passing state operating budgets in odd-numbered years, such as this one. Then traditionally they concentrate on bonding bills in even-numbered years.
But in fact, almost every year is a bonding year, although the amounts vary significantly by odd and even years. Over the past decade bonding bills have averaged around $775 million in even-numbered years and $220 million in odd-numbered ones.
COSTS ARE RISING
Since last year’s requests went unanswered, MMB advised applicants who simply want to update their previous proposals to add 6 percent to the project costs to reflect inflationary increases for construction.
No one at the Capitol should be surprised that state and local officials are asking for more money for infrastructure projects next year. For years the state has had a backlog of requests for funding to take care of the lands and aging buildings government entities have. It’s called “deferred maintenance.”
In 2018, the Department of Administration projected that state agencies and public colleges would need $8.2 billion over the next decade to catch up on needed maintenance, renovations and replacements. That was more than governors and lawmakers had been willing to authorize in their two-year capital budgets — and that figure didn’t include the money local government officials said they needed.
State agencies and public colleges own nearly 7,500 buildings, and the Department of Natural Resources has more than 26,000 other facilities. They are expensive to maintain.
A FEW OF THE REQUESTS
Here are some of the big things in the state agency requests:
- Minnesota Department of Transportation seeks $1.4 billion, mostly for roads and bridges. Its big ask is for $800 million to repair or replace deteriorating “high priority bridges.” Most of the money would come from trunk highway bonds financed by gas taxes, license tab fees and motor vehicle sales taxes.
- Minnesota State college system requests $293 million and the University of Minnesota $271 million with most of the money going for asset preservation. The biggest building project proposed is $69 million for chemistry teaching laboratories on the U’s Minneapolis campus.
- Department of Natural Resources seeks $373 million, including $149 million to repair and maintain its lands and buildings.
- Housing Finance Agency asks for permission to issue $250 million in housing infrastructure bonds to finance affordable housing projects around the state.
- Pollution Control Agency seeks $236 million, including $170 million to clean up the closed Freeway Landfill and Dump in Burnsville.
- Department of Administration asks for $204 million to replace the Centennial Office Building on the Capitol campus.
- Public Facilities Authority requests $200 million for water infrastructure projects throughout the state.
Local government funding requests include Ramsey County’s pitch for $26 million for The Park at RiversEdge, which would extend from the downtown St. Paul river bluff over Shepard Road and the adjacent railway to the Mississippi River.
The City of St. Paul is seeking a total of $85 million, including $23 million for an eastbound Kellogg Boulevard-River Centre bridge and $20 million for the Great River Passage river recreation and environmental education center on the Mississippi River near the Watergate Marina.