Our View: Don't delay overdue capital investments -- pay cash now
This is one of those rare circumstances when all of us (well, almost all of us) want the same things. Clean water. Top-notch universities and community colleges. Safe highways, railroads and airports. Quality housing for disabled veterans.
On Monday, Minnesota's DFL-controlled House passed a $1.9 billion capital investment package that would help ensure that current and future generations of Minnesotans will have clean drinking water, safe bridges, up-to-date educational facilities and a plethora of other infrastructure necessities that are crucial to our state's quality of life.
Because this bill included $1.5 billion in new borrowing, it required a three-fifths “supermajority” of votes, which means it needed the approval of 11 Republicans.
It got 21.
Even in this hyper-partisan age, this bipartisan vote doesn't surprise us. The so-called “bonding bill” spreads money all over Minnesota, and party affiliations tend to be pushed aside when one's constituents need a new wastewater treatment plant or are enduring lengthy detours because of failing bridges.
But now this spending package goes to the Senate, where its future is both confusing and uncertain amid an unprecedented confluence of circumstances. Consider:
- DFLers control the House, Senate and governor's office, a trifecta that has allowed them to pass both mundane and controversial legislation at what passes for breakneck speed in the current legislative session.
- Gridlock in the 2022 Legislature means that legislators now are tasked with passing a two-year budget as well as a capital investment package in the same session.
- Minnesota currently has a budget surplus of nearly $18 billion, and DFLers won't need a single Republican vote to use that surplus however they choose.
- Republicans who want some of that surplus to be “spent” on tax cuts have just one real bargaining chip; namely, the capital investment bill, which in its current form would need the votes of seven GOP senators.
In a business-as-usual legislative session (especially if this were an election year), we know how this situation would play out. Leaders from the two parties, along with the governor, would negotiate both the budget and capital investment bills behind closed doors. Little would happen until the final days of the session, and history tells us that whatever “handshake deal” is reached might fall apart at the last minute – scuttling the capital investment package and perhaps the budget, too. Special session, here we come.
This year, there's no excuse for such an outcome, because both sides already have opened the door to a perfectly acceptable, logical compromise: Pay with cash, not the state's credit card.
The capital investment bill is referred to as the “bonding bill” because Minnesota sells bonds to pay for the projects. Selling bonds is government-speak for borrowing money, which must be paid back with interest. And, in case you haven't heard, interest rates are soaring.
DFL leaders, most notably House Speaker Melissa Hortman, have raised the possibility of getting around the bonding bill's supermajority requirement by using the budget surplus to pay for it. The capital investment bill, in this case, wouldn't be a “bonding bill” at all. It would simply be a spending package, and it could pass with a simple majority.
While Hortman might have floated this option as leverage, as an implied threat that a cash-only plan would leave less room for the tax cuts Republicans are seeking, we'd like to see the GOP say, “Pay with cash? No new debt? Done deal!” A party that prides itself on fiscal conservatism should endorse a plan that would save Minnesota hundreds of millions of dollars in interest during the next 20 or 30 years.
Some House Republicans already have expressed support for the cash-only option, and politics aside, it makes good sense. If you have $500 in your pocket when you go out for an expensive dinner, why would you pay with a credit card – especially one that will start charging interest the moment the receipt is printed?
We firmly believe that if the House and Senate held votes on a $2 billion, cash-only capital investment bill, it would pass with supermajorities that, ironically, it wouldn't even need.
This is, after all, one of those rare circumstances when all of us (well, almost all of us) want the same things. Clean water. Top-notch universities and community colleges. Best-in-the-nation state parks and trails. Safe highways, railroads and airports. Quality housing for disabled veterans. Updated fire stations and first-responder training facilities.
Make the deal, legislators and Gov. Walz. Don't drag your feet for two months. Don't repeat the staredown of last May, when neither side blinked – and we all paid the price.