Collapse of bonding bill in Minnesota sparks political recrimination

A major public infrastructure package projected to create thousands of construction jobs around Minnesota faces an uncertain fate after the Legislature ended a special session Tuesday without agreement on a $1 billion-plus borrowing bill.

The collapse of the multiyear bonding bill was the third failed effort since the end of a regular Legislative session in May that was clouded by the coronavirus pandemic. Another special session in June, dominated by the police killing of George Floyd, also ended without a deal.

Lawmakers in the divided Legislature came together again late Monday night to pass sweeping police reforms in response to the death of Floyd and other Black men in encounters with police. Leaders in both parties praised the bipartisan effort to reach agreement on a police accountability measure, which Gov. Tim Walz is expected to sign later this week. But support for a $1.8 billion borrowing package failed to materialize, despite leaders' assurances that both sides were close to a deal in recent weeks. Political jockeying over Walz's use of executive powers during the pandemic, combined with differences over some of the building projects, sank the bonding bill before a self-imposed deadline to adjourn the weeklong special session.

House Republican Leader Kurt Daudt, who conditioned support for the bonding bill on ending Walz's emergency powers, left open the possibility of a deal next month when the Legislature is expected to return to review another potential extension of the peacetime emergency. "We'll be back here in three weeks and we can try again," he said in a House speech early Tuesday.

But construction industry and union groups backing the bonding bill say the continued inaction could again delay, or eventually doom, needed infrastructure improvements that could foster economic development and create jobs during the pandemic.

"They know the impact this is going to have and they did nothing anyway," said Jason George, business manager for the building trades union Operating Engineers Local 49. "That rises to disgust to me."

Walz and top leaders in the DFL-controlled House and the GOP-led Senate had pledged to make bonding a priority. But a revised proposal failed Monday amid continued opposition from the House GOP minority. Unlike other spending measures, the long-term borrowing bill requires a supermajority vote, meaning Republican votes were needed.

As the collapse of the bonding bill became evident early Tuesday, both sides cast blame. Walz blasted House Republicans for being "willing to walk away from the best economic thing we could do." He noted that majority leaders in both chambers negotiated a deal without tying the bonding bill to the coronavirus dispute.

"I think it's incredibly unfortunate, the idea we can't lift the highway in Henderson so it doesn't flood every year because I'm ordering masks for long-term-care facilities," Walz said. "That's part of dealing with the pandemic. I need to do that."

Daudt, R-Crown, blamed Democrats for packing the bill with "poison pills" they knew his GOP caucus wouldn't support, including language related to a light-rail transit expansion and a train to Duluth. "There were zero discussions with our caucus all day Monday, signaling that Democrats simply aren't serious about reaching a compromise," he said in a statement.

But Daudt's GOP counterpart in the Senate, Majority Leader Paul Gazelka, signaled support for the bonding bill, even though senators did not get a chance to vote on it.

Gazelka said the bill contained a "lot of good provisions," including money for wastewater infrastructure and $600 million for roads and bridges. "Both sides would say there was something in there they didn't like," Gazelka said in an interview Tuesday with WCCO Radio. "Welcome to divided politics. You don't get everything you want."

George, from Local 49, said while there was blame to go around, he remained "deeply disappointed" with the House Republicans' opposition, which blocked the bill in the lower chamber.

"Last night, with a good bonding bill in front of them, in my opinion, they chose to fight with the governor instead of create jobs," he said. "And that's something I just don't understand."

Legislators are likely to return to the Capitol for another special session in mid-August, if Walz extends his use of emergency powers. But a previously planned sale of government bonds in August complicates prospects for a deal, according to Walz, because the new borrowing could jeopardize the financing for projects that have already been approved.

A spokesman for Minnesota Management and Budget said given those plans and federal securities law, the "next opportunity for the Legislature to make any changes to the budget, including a bonding bill, must wait until late September when this blackout period ends."

And leaders in both parties fear that negotiations in any September session could be complicated by the November elections, when all House and Senate seats are up for grabs.

"We've tried two to three times on the bonding bill and the tax relief," Gazelka told WCCO. "At this point, it very may well be that we come in and we continue to advocate to get rid of the governor's emergency powers and then just … close up. Now we're aiming for the regular session in January."

House Speaker Melissa Hortman, D-Brooklyn Park, struck a similar tone. She said Senate Republicans indicated to her that Tuesday was the last chance for a deal this year.

"It may be much more difficult to get along and get things done as we move into the heat of the campaign season," she said.