Capitol Watch: Billions more on the state credit card

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Huge surplus didn’t prevent legislature from record borrowing

Although Minnesota has a constitutional requirement for a balanced budget, the legislature is allowed to borrow money for capital building projects. In the 2023 session, they committed future taxpayers to $1.5 billion in debt, to be paid off over the next 20 years. Debt service has become one of the fastest growing areas of the state budget. In addition to borrowing, the bill included another $900 million in cash spending on projects, otherwise known as pork.

The 2023 capital borrowing bill includes hundreds of millions of dollars for swimming pools, hockey rinks, curling clubs, art centers, film facilities, bike paths, community centers, zoos, ski chalets, and our favorite, the National Loon Center.

Thirteen cities convinced state taxpayers to pay for their fire or police stations including Edina, Hibbing and Minneapolis. Why are income taxes used to pay for police and fire stations in some cities, while everyone else uses their property taxes? The bill also includes millions for local street projects in cities like Savage, Barnesville and Plymouth. Again, local streets should be paid for with property taxes, not income taxes. Why do some cities receive money for local streets while the rest use their property tax levy? Another core function of cities is water management. There are millions of dollars in the bill to pay for water treatment and wastewater management projects in cities across the state.

Cities that do the right thing, plan ahead and take care of their infrastructure look like suckers when others ask the legislature to fund their core services. Gov. Walz also signed a bill this year to fund the replacement of lead pipes throughout the state. Again, many cities don’t have any lead pipes left because they used property tax revenue to upgrade their infrastructure over the years.

An analysis of which districts won the capital projects lottery shows that it’s not necessarily the powerful committee chairs and senior members who are securing these pork projects for their districts. In fact, it’s the opposite. A lot of the pork goes to districts represented by newer, more politically vulnerable members under the mistaken belief that “bringing home the bacon” will bolster their reelection chances. There is no evidence that delivering projects in a borrowing bill leads to electoral success.

In 1999, Republicans had just taken over control of the House for the first time in a decade and Rep. Jim Knoblach of St. Cloud was the new chairman of the House Capital Investment Committee. Before holding a hearing on any request for borrowing, Knoblach brought forward and passed a bill that would fundamentally change the way bonding bills are put together.

The bill required projects to have statewide or at least regional significance in order to receive funding. No local projects, no pork. It also prohibited the creation of “inequities among local jurisdictions” in an attempt to prevent the legislature from picking winners and losers among cities and counties. Subdivision 3 of the bill was brilliantly written.

The capital borrowing bill in the 2000 session was a work of art. Instead of pork projects for weak legislators, the bill funded boring state infrastructure needs like the state college system, a new BCA crime lab, state parks and roads and bridges. Democrats complained that pet projects like the Schubert Theatre in Minneapolis and Public Television stations were denied funding. Total cost of the bill was $583 million.

Over the next ten years the legislature gradually ignored the new law requiring statewide significance and Subdivision 3 was outright repealed in 2009. The pork returned with a vengeance and each new borrowing bill tops the last one, with 2023 capping out at $2.6 billion.

The 2000 borrowing bill seems like a distant memory in today’s political climate.

To see the entire list of projects funded in the 2023 bill, click here.

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