April 3, 2008

Capital Investment Bill Passes House and Senate

On Wednesday, April 2, both the House and Senate passed the Omnibus Capital Investment Bill (HF 380). The House passed the bill 90-42 and the Senate passed the bill 57-10.

The bill approved by the conference committee is $100 million higher than the governor has recommended for general obligation bonding authority. Accordingly, there was much discussion on the level of debt service during debate in both bodies. Opponents raised concerns about how exceeding the cap would affect the state’s bond ratings and deviate from decades of policy agreement, while supporters provided arguments that the level of debt service would remain within the established 3% limit over time.

A specific provision was put in the bill to reassure the governor of the legislature’s intent not to exceed the 3% cap. The bill states that in calculating the debt service limits using the Department of Finance’s guidelines, the department must assume that the bonding amount in future odd-numbered years will be at the same amount assumed in the budget forecast and assume a bonding amount in future even-numbered years will be an amount that will allow general fund debt service payments to meet the guidelines.

House and Senate authors also emphasized that the higher level of investment in this bill would put more people to work in the short run, provide more jobs for the future and hedge against future inflationary pressures.

State Finance Commissioner Hanson reminded conference committee members on April 1 that the governor has made it clear that he wants to keep the bill at his $825 million recommendation. It is unclear whether the governor will exercise his line-item veto authority or simply veto the entire bill to achieve this spending limit.

The chart below highlights the major line item investments in transportation and economic development.

Transportation	Governor’s Recommendations	S.F. No. 3295	H.F. No. 380	SF 2538	Conference Committee Report
Local Bridge Program	225,000,000	0	0	0	0
Local Bridge Replacement & Rehabilitation- Hwy 36	0	1,000,000		2,000,000	2,000,000
Greater MN Transit	0	2,000,000		1,000,000	1,000,000
Rail Service Improvement	0	2,000,000		2,000,000	0
Port Development Assistance	0	2,000,000	2,500,000	2,000,000	2,000,000
St. Cloud Regional Airport	2,000,000	2,000,000	0	0	0
METRO COUNCIL – Urban Partnership Agreement	16,672,000	16,672,000	12,000,000	16,672,000	16,672,000
METRO COUNCIL – Bottineau Blvd. Transit Way	0	500,000	500,000	500,000	500,000
METRO COUNCIL – Cedar Avenue Bus Rapid Transit	0	6,000,000	500,000	4,000,000	4,000,000
METRO COUNCIL – Central Corridor Transit Way	70,000,000	70,000,000	70,000,000	70,000,000	70,000,000
METRO COUNCIL – I-94 Corridor Transit Way- Washington County	0	750,000	500,000	750,000	750,000
METRO COUNCIL – I-494 Corridor Transit Way	0	500,000	500,000	500,000	500,000
Red Rock Corridor Transit Way	0	500,000	500,000	500,000	500,000
Robert Street Corridor Transit Way	0	500,000	500,000	500,000	500,000
Rush Line Corridor Transit Way	0	500,000	500,000	500,000	500,000
Southwest Corridor Transit Way	0	500,000	500,000	500,000	500,000
Union Depot	0	1,000,000	4,500,000	2,000,000	2,000,000
High Speed Rail Line – St. Paul - Chicago	0	2,000,000	4,000,000	4,000,000	4,000,000
Northshore Express – St. Louis & Lake Counties RR Authority	0	1,500,000	500,000	1,500,000	0
Railroad Track Rehabilitation – MN Valley Regional Rail	0	00	7,000,000	4,000,000	3,000,000
Southeast Express – Rochester – St. Paul	0	00	500,000	500,000	500,000
Local Road Wetland Replacement Program	4,200,000	4,920,000	3,000,000	4,920,000	4,200,00
Economic Development
Greater Minnesota Business Infrastructure Grant Program	20,000,000	10,000,000	5,000,000	7,500,000	7,500,000
Bioscience Business Development Public Infrastructure Grant Program	10,000,000	10,000,000	9,325,000	9,000,000	9,000,000
Redevelopment Grant Program	20,000,00	10,000,000	5,000,000	7,500,000	8,500,000
Wastewater Infrastructure Fund	10,000,000	10,000,000	15,000,000	12,300,000	15,300,000
Minnesota Housing Finance Agency	0	0	2,000,000	2,000,000	1,000,000

Metro counties vote on sales tax

With authorization provided for in the 2008 Transportation Funding bill, five metro counties voted to impose a levy of an additional ¼ percent in the state sales tax that will enable a new joint powers board to expand light rail, commuter rail and busway systems throughout the metropolitan area. Anoka, Ramsey, Dakota, Hennepin, and Washington voted to impose this new levy. Carver and Scott decided not participate at this time but will still participate in the planning process established by the new joint powers board.

For more information, contact: Carol Lovro, AMC Policy Analyst

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Association of Minnesota Counties

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