Bonding relies on technical definition

Talk about it

ST. PAUL – Minnesota’s bonding bill has three personalities – the public discussion about what public works projects will be funded, the insider talk about how many jobs it may create and the ultra-insider debate over how much interest the state can afford to repay on money borrowed for the projects.

It is the third one that will determine more than anything else how many projects the state can fund. Public works projects range from fixing college buildings to expanding trails to studying passenger rail lines.

Minnesota legislators long have informally agreed to hold “debt services” – money needed to repay bonds the state sells to finance public works projects – to 3 percent of the state budget.

It has not been in law, or even rule, but policymakers of all stripes accepted the concept.

They still do; it is just a matter of how that 3 percent mark is defined.

Republican Gov. Tim Pawlenty sent a letter to lawmakers warning they should not authorize more than $825 million in bonds or they risk going over the 3 percent mark. But Democrats in control of the Legislature said even if they sell $960 million, the state will not reach the magical 3 percent.

That is what much of the discussion will be as House and Senate negotiators work with Pawlenty’s staff in trying to hammer out a final bonding bill in the next few days.

Tags: minnesota_news, bonding, legislature