In 2024, the Minnesota Legislature adjourned without passing a bonding bill, leaving critical public works projects in limbo. However, advocates from construction, transportation, municipal sectors, and labor are hopeful that 2025 will bring a better outcome as they lobby for increased investments in vital infrastructure—from roads and bridges to affordable housing and public safety.

The challenge this year comes with a tight budget, as the state prioritizes funding its biennial budget, but there is growing momentum among industry leaders who believe now is the time to secure a sizable bonding package. Bonding discussions are picking up steam following Governor Tim Walz’s announcement of his $887 million "infrastructure plan."

Governor Walz’s plan is a comprehensive proposal that includes a variety of funding priorities. Among the most significant items are $239 million allocated for public safety projects, $206 million to maintain buildings at the University of Minnesota and Minnesota State colleges, and $144 million for water infrastructure improvements. Additionally, the plan includes funding for local government projects ($40 million), Rapidan Dam recovery ($10 million), and housing and environmental initiatives ($44 million). Notably, $17 million is earmarked to update the Minneapolis Veterans Home, while $7 million will go towards the rehabilitation of public housing units across the state.

The funding breakdown reveals that Walz's plan is composed of $790 million in general obligation bonds and $97 million in trunk highway bonds, according to the Minnesota Management and Budget office. While this recommendation is a step in the right direction, it falls short of the total $7.6 billion in funding requests received in 2024, which included $4.7 billion from state agencies and $2.9 billion from local governments.

Laura Ziegler, director of Highway/Heavy & Government Affairs for the Associated General Contractors of Minnesota, expressed that the governor’s proposal is a “critical first step” and serves as an important benchmark for ongoing public infrastructure debates at the Capitol.

Ziegler stressed that the number of regional and community projects needing funding continues to grow, making it likely that bonding discussions will be front and center during legislative sessions. “With the state’s financial challenges and the absence of a bonding bill in 2024, using our bonding capacity to invest in infrastructure is more important than ever. It’s a win for the public, the state, and the construction sector,” Ziegler said.

The path to a successful bonding bill will not be straightforward. The Minnesota Legislature is politically divided, and this is a budget year, which means securing a two-thirds supermajority for bonding bills will require support from both parties.

Senator Karin Housley, the Republican lead on the Senate Capital Investment Committee, shared her cautious perspective on Facebook, stating, “There’s room to bond for important, bipartisan projects, but this isn’t the time to max out the state’s credit card on ‘nice-to-haves.’”

However, industry leaders are optimistic that the absence of a bonding bill in 2024 presents a strong case for making substantial investments this year.

Joel Smith, president of the Laborers’ International Union of North America (LIUNA) for Minnesota and North Dakota, underscored the urgency of a robust bonding package. "Every year is the year to fix our crumbling roads, bridges, and water infrastructure. This year, the Legislature must pass a strong bonding bill to keep Minnesotans safe and create family-sustaining jobs for thousands of local building trades workers. Our communities and construction workers cannot afford another year of inaction,” Smith said.

The Associated Builders and Contractors (ABC) of Minnesota and North Dakota expressed satisfaction with Walz’s proposal but also called for reforms that could make construction projects more efficient. Adam Hanson, the chapter president, emphasized that in light of the state’s $5.1 billion budget deficit, lawmakers should consider making smart reforms that stretch taxpayer dollars further.

“The more effectively taxpayer money is used, the more roads, bridges, and infrastructure can be built across the state. Reforming outdated apprenticeship and prevailing wage laws would allow more Minnesotans to work on these projects while keeping costs aligned with the private sector,” Hanson argued.

Margaret Donahoe, executive director of the Minnesota Transportation Alliance, acknowledged the limited funds available but emphasized that there’s a clear need for more significant investments in public infrastructure, especially for local road and bridge projects.

“The state does have the capacity to issue additional trunk highway bonds while remaining within the Minnesota Department of Transportation’s debt service policy, and that should be part of the conversation this year,” Donahoe suggested. She also pointed out that the state’s limited bonding ability is affecting much-needed improvements to local roads, which are vital to the economic health of communities across Minnesota.

Local government leaders, particularly those representing municipalities, have voiced concern over the lack of action on bonding. Craig Johnson, lobbyist for the League of Minnesota Cities, noted that many city projects are on hold due to the absence of a bonding bill. “Hundreds of city projects around the state have already gone through state processes to determine their eligibility for funding, and we’re still waiting for a bonding bill,” Johnson said. “So, there are a lot of projects backed up that can’t move forward until the state passes a bonding bill.”

Cities are particularly focused on funding for local bridges, roads, and wetland replacement efforts, Johnson added. “If a local road disrupts a wetland, the state has an obligation to replace it. However, this is not adequately funded right now, and cities need the support to fulfill this responsibility.”

In terms of housing, Johnson expressed concerns over the lack of funding for new housing construction in Walz’s plan, pointing out that the general obligation bonds for housing in the governor's budget are solely designated for preserving existing public housing assets. “The housing crisis continues to worsen, yet the state is not investing in new housing construction, which only exacerbates the problem,” Johnson explained.

Despite these challenges, Johnson is optimistic that a bonding bill can pass this year. He noted that if the regular session doesn’t resolve the budget impasse, bonding could become a bargaining chip in special session negotiations.

“The bonding bill is like dessert in a full meal. It’s not passed until everyone has worked through the budget and tax bills,” Johnson quipped.

For some advocates, the stakes are not just about the bricks and mortar of infrastructure projects, but also the people who make these projects a reality. Barb Lau, executive director of the Association of Women Contractors in St. Paul, emphasized the human element of bonding investments. “Whether it’s a building or a bridge, these bonding dollars provide livelihoods to people working on these projects,” Lau said. “It’s about keeping food on the table for those in the construction industry.”

As the debate continues to unfold, many are hopeful that a balanced approach can be reached that addresses both the critical infrastructure needs of the state and the financial realities facing lawmakers. In a year when Minnesota is facing a $5.1 billion budget deficit, finding common ground on bonding is likely to be one of the most challenging—and crucial—tasks at the Capitol.