Last minute wrinkle on key project could jeopardize bonding bill votes

A last minute dispute over details of a key project may jeopardize the passage of the DFL majority’s $846 million public works proposal.

The Minnesota House is scheduled to vote on the bill Thursday.  Democrats need some Republican support to pass it. Late Wednesday, DFL House leaders said they may have to pay cash for one key project – the Lewis & Clark water pipeline in southwest Minnesota.

House Speaker Paul Thissen said a $7 million federal grant could be in jeopardy if the state relies on borrowing authority to pay for the project.

The $22 million Lewis & Clark water project may have attracted enough Republican support to allow the bonding bill to move forward.  That support, however, may evaporate if the project is taken out.

Thissen said he thinks the Republican support for the bonding bill will be there regardless of how the Lewis & Clark project is financed.

“Whether it’s in the cash bill or in the bonding bill, the point is they want the project done,” Thissen said of Republicans who back Lewis & Clark. “This will get the project done just as good as if it’s in the bonding bill.”

Minnesota Management and Budget Commissioner Jim Schowalter says he’s confident that the state can issue bonds to borrow for the water pipeline but he said it could make it more difficult to secure federal funding for the project in the future.

“It is certainly OK to issue debt,” Schowalter said. “It is a complicated project particularly trying to get the federal reimbursement but we will make every effort to make this project work.”

Democrats may not be willing to take that chance. Thissen said it was “fortuitous” that they found out about the issue before lawmakers authorized bonds.

The bonding bill dispute creates another wrinkle for lawmakers as they try to wrap up their session. The legislature is trying to finish its work before Monday’s constitutional deadline to adjourn.

To pass the public works package that includes borrowing for state Capitol renovations and higher education projects, legislative leaders have worked to craft support of three-fifths of the House and Senate. Shifting projects at the last minute could create problems garnering the votes to pass the bill, particularly Republican votes from southwestern Minnesota.

On Wednesday night, GOP House Majority Leader Kurt Daudt said he’s still working with Thissen and DFL leaders on a compromise. He emphasized, however, that his caucus doesn’t support the $846 million bonding bill put forward today by Democrats.

Daudt was uncertain whether shifting the Lewis & Clark project into a separate bill that spends $200 million from the budget surplus on public projects would jeopardize GOP votes for the bonding bill.

“Obviously there were a couple of Republicans that for sure were going to vote for the bonding bill if that’s in it and now they’re going to be voting for the cash bill if that project is in it,” Daudt said. “Ultimately it has never been the goal of the Republicans to not have any votes. We want to do what’s best for Minnesotans and this is a really important project.”

Support for the bonding bill is less of an issue in the Minnesota Senate. Democrats only need to pick up two Republicans to pass the bill. Sen. Dave Senjem, R-Rochester, said there could be as many as ten Republicans who back the bill.