Bonding among priorities as legislators return to St. Paul
By Janet Kubat Willette
jkubat@agrinews.com
Date Modified: 02/02/2012 9:15 AM
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For the first time in recent memory, legislators are returning to St. Paul without a budget deficit.
The November forecast predicted the state would actually see a budget surplus of $876 million for the 2012-13 biennium.
"We've had a miraculous turnaround," said Sen. Doug Magnus, R-Slayton, chairman of the Senate Agriculture and Rural Economies Division.
The state went from a $5 billion budget deficit in 2011 to a projected surplus of nearly $1 billion for the current biennium.
That doesn't mean lawmakers are flush with cash to spend on new projects as legislators return to St. Paul this week.
That money is already spoken for in law, legislators say, with roughly $300 million dedicated to replenishing the state's cash flow account so it can pay its bills without borrowing and another $600 million to $650 million going into the budget reserve account, also known as the rainy day fund.
Third, the money goes to pay for the school shift. The state has borrowed money from schools to help it balance its books in recent years.
Magnus said he doesn't sense a big appetite to spend a lot of money this session.
Instead the focus this session will be on bonding.
Gov. Mark Dayton released his bonding proposals Jan. 17.
Republicans who control the House and Senate have yet to release their bonding plans, but Magnus and Sen. Jeremy Miller, R-Winona, both
expect the Republicans to release a smaller proposal than the governor's $775 million proposal.
Typically, the Legislature has passed a $1 billion bonding bill every other year, Magnus said. The Legislature passed a $500 million bonding bill last summer in an effort to create jobs.
He's reluctant to pick a number, but says the bonding bill will likely be half normal size.
A member of the bonding committee, he has four criteria for projects:
• The project must have a broad area of effect, if not a statewide impact.
• A match, be it local or other, must be available to match state funding.
• What impact will the proposal have on immediate job creation?
• What is the long-term consequence of the proposal? If approved, can the project cash flow itself?
The governor's proposal includes $30 million for the Rural Finance Authority.
Magnus said that is separate and outside the general obligation bonds because these are user-financed bonds paid off when loans issued through the agency are paid back.
He is in conversation with the Department of Agriculture to make sure there are adequate funds in the RFA so they can continue to make loans to people who want to invest in their farming operations.
Rep. Andrew Falk, DFL-Murdock, is hoping to have two proposals included in the bonding bill. One is for installation of a commercial scale wind turbine at Minnesota West in Canby where they have a program to train technicians who work on turbines. His hope is when not in use for training, the turbine could be used to power the campus and perhaps sell energy back to utilities. Funding for predesign and planning money was line item vetoed from the bonding bill by Gov. Tim Pawlenty.
The second proposal is for an emergency operations center in Ortonville in Big Stone County.
Flood mitigation dollars are the bonding priority for Rep. Kent Eken, DFL-Twin Valley.
In order to pass a bonding bill, the governor and House and Senate leadership will need to agree on its size and what's included.