University officials declared a victory Thursday as lawmakers passed a plan to finance $206.8 million for campus building projects, using a rare parliamentary maneuver to help the school while staying within the state budget.
In a rush to beat the session adjournment, House and Senate members worked late into the night before passing the capital bonding bill on 86-47 and ??-?? votes. It will fund a record $999 million in statewide construction projects.
At this point only Gov. Arne Carlson could stop the bill from becoming law, but the governor has pledged support because it includes money for a St. Paul hockey arena.
Only 56 percent of the University’s share will come from the bonding bill. But if the school springs for $68.5 million for certain projects, the state will not require the University to repay an equal amount in loans.
Overall, the University came out as a big winner. The $53.5 million Walter Digital Library is the third largest project in the bonding bill, behind the Minneapolis Convention Center and St. Paul River Center Arena.
And the winnings didn’t stop with the library.
“It basically means that every one of the University’s projects were funded,” said University President Mark Yudof.
Among University projects, the Cellular and Molecular Biology building took the only major blow in the Legislature — the $70 million complex is half funded. If lawmakers approve the rest of the money in the next bonding session, construction will be about a year behind schedule, Yudof said.
The University originally requested $249 million from the Legislature; the bill allots $138.3 million. But the special amendment from a conference committee lets the school reap a much bigger reward.
Normally, the University would have to repay one-third of its bonding budget as “debt service” over 20 years. As a trade-off for funding four building projects itself, the amendment exempts the University from debt service payments.
The projects the school is responsible for include: an addition to the Architecture building, construction of the first half of the Molecular and Cellular Biology complex and renovations to Murphy and Ford halls.
The total cost to the University is the same as if lawmakers had paid the full $206.8 million and still charged the debt service.
“It’s a little bit of a slight of hand,” said Richard Pfutzenreuter, vice president for Budget and Finance.
School officials need to complete these initiatives by July 2002 or face debt service payments. Pfutzenreuter said the University will pay for the four projects by issuing bonds.
Some of the major University initiatives in the final capital bonding bill are:
(0149)$53.6 million to create a digital technology center in Walter Digital Library;
(0149)$28.2 million for an addition to the Math and Science building and infrastructure improvements on the Morris campus;
(0149)$4 million to renovate Gortner Hall and Snyder biology labs on the St. Paul campus;
(0149)$1.25 million for an addition to Amundson Hall.
“I think the real plus of it was that we were able to get the lion’s share of the University’s request,” said Rep. Lyndon Carlson, DFL-Crystal.
Yudof said the University’s success stemmed from several factors, especially the governor’s support.
“The governor stood shoulder to shoulder with us right down the line,” Yudof said, adding that the state’s surplus and his honeymoon period as president also factored into the game.
Lawmakers also approved an omnibus tax bill, but a proposed $7 million tax credit for student financial aid was dropped from the final draft. Gov. Carlson threatened to veto the bill if it included the “Grade 13” provision, intended to give a $500 tax credit to families of first-year students entering college directly after high school graduation. He disapproved because of the measure’s “tails” — the ongoing financial burden to the state.
“I was quite disappointed with that,” said Rep. Carlson, who proposed the tax break. He designed Grade 13 to piggyback the HOPE Scholarship, a federal measure which provides $1,500 in tax relief for students.