After months of stalemate over a bonding bill, a surprising headline emerged late in the day on Wednesday, stating that Minnesota House Republicans are “willing to vote on bonding bill”  during the next special legislative session. This headline turned heads because for the last five months House Republicans have said they will not support a bonding bill unless Gov. Tim Walz relinquishes the peacetime emergency powers he has exercised since the onset of the pandemic in March. 
 
In an interview, House Minority Leader Kurt Daudt (R-Crown) said he notified DFL leaders that he would be willing to move forward with a bonding bill even if Gov. Walz does not relinquish his authority, but Rep. Daudt did set forth a new condition. With the state facing an estimated $4.7 billion general fund deficit for 2022-23, he said that any bonding bill passed by the Legislature should not add to the deficit. Privately, some House Republicans have communicated that this means that Rep. Daudt wants the general fund-backed debt service required to support the bonds in the bill to be offset by budget adjustments like spending reductions. 
 
Does this increase the likelihood that a bonding bill will pass in October? In one way, the House GOP’s shift in position is big news. While many House Republicans have communicated privately in recent months that they want to get a bonding bill done and are willing to step away from tying the bill to the Governor’s executive powers, this is the first time that statement has been made publicly. But by shifting to a new demand that involves budgetary adjustments that are likely to be controversial in their own right, this could also be viewed as more of a lateral move than progress. 
 
Some House GOP members have also discussed tax priorities as potential trade-offs for a bonding bill. For example, full conformity with federal tax code on Section 179 expensing remains a priority for some. The proposal comes with a significant upfront general fund cost but is a major issue of concern for some business and agriculture groups.
 
CGMC has long supported a robust bonding bill to address infrastructure needs around the state. We continue to believe that it is possible and necessary for the state to do both: pass a bonding bill that supports our economy and creates jobs and make budgetary decisions that limit the pain caused by the state’s budget situation. 
 
The current iteration of Gov. Walz’s peacetime emergency declaration expires Oct. 12, which means we are likely less than two weeks away from the Legislature’s fifth special session of the year. Please continue to contact your legislators to urge them to put politics aside and get a bonding bill done this year.