With thousands of talented Minnesotans looking for work due to the economic downturn, many legislators are advocating a comprehensive Capital Investment Bill as an important step toward economic recovery in 2010.

Commonly known as “bonding,” capital investment is the process by which the state issues bonds to fund public projects that have a state or regional significance. "These projects vary in size from things like roof repair and improved insulation at existing facilities to major new construction.

FIRSTHAND LOOK AT NEEDS

Between September and December of 2009, senators and staff from the Capital Investment Committee traveled thousands of miles to every corner of Minnesota from Nett Lake and Thief River Falls in the north to Caledonia and Luverne in the south – to take a firsthand look at projects for which state funding is being sought.

They also visited numerous projects that are shovel-ready, with plans in place and workers ready to go as soon as funding is approved. Sadly, funding for many of these projects was passed by the House and Senate in 2009 and line-item vetoed by Governor Pawlenty, meaning more months in which skilled people needing work sit idle. Undaunted, officials from state agencies, cities, counties, and the higher education community are still working hard to secure needed funding.

TIME TO BUILD

One message committee members heard time and again during their countless on-site meetings was that this is an ideal time to bond and build, as the economic  downturn has meant significant savings to taxpayers on things like building materials and labor. For example, a major construction project at Bemidji State University for which $15 million was budgeted is expected to cost just over $12 million when finished later this year.

The committee had more than $3 billion in requests for state funds. As there will likely be less than $1 billion to spend, many tough decisions will have to be made by legislators as the Senate’s final capital investment package is put together.

In testimony before the State Legislature, University of Minnesota economists have estimated that a new Minnesota job is created for every $100,000 in capital investment that becomes law. "ese jobs vary widely, from temporary trades and maintenance positions that go along with construction and refurbishment projects, to full-time positions created by the construction of new facilities, and even ancillary positions like hotel and restaurant workers needed to serve visitors at new convention and sports facilities.

VITAL JOB CREATION

In most cases, capital investment projects also mean business for Minnesota contractors and vendors. For example, during an October 2009 visit to the site of the new arena and convention facility under construction on the downtown waterfront in Duluth, local officials presented senators with a list of the contractors who have supplied materials in the building of the arena, which is scheduled to open in early 2011. Of the 39 companies under contract in Duluth, 37 of them are Minnesota-based, meaning much-needed business and jobs for people in our state. According to numbers presented to the Legislature, a comprehensive capital investment package passed in the 2010 Session and signed into law by the Governor could mean thousands of workers on the job as early as this spring, and as many as 10,000 jobs created statewide.

WHY BORROW?

A $1 billion bonding bill will cost $2.5 million in debt service this biennium, a small cost for such a big impact, especially because interest rates are very low. We only borrow for long-term capital “bricks and mortar” projects -- kind of like a home mortgage.

Key projects funded in this Senate Bonding Bill include:

• $3.9 million for classroom additions at Metro State
• $250,000 to plan a regional baseball park in St. Paul’s Lowertown
• $1.1 million in the House bonding bill for Phalen-Keller Regional Park
• $15 million for expansion of the Ordway Center Arts Partnership
• $65 million for asset preservation and upkeep at the University of Minnesota
• $5 million for renovation of the Cedar Street Armory
• $100,000 for the Hoffman Rail Yards
• $20 million for Gillette Childrens Hospital
• $11 million for the Como Zoo
• $5 million for the Asian Pacific Cultural Center