In pushing for the Governor’s proposed $775 million bonding proposal, it looks like the Dayton administration will focus on the proposals’ abilities to jumpstart private spending and the creation of permanent jobs. On Friday, the Governor’s team posted an example — a $25 million project to revitalize Nicollet Mall:

The revitalization of Nicollet Mall as a signature business, pedestrian, and retail corridor will help leverage $2.7 billion dollars in private investment to Downtown Minneapolis, creating 13,000 new permanent jobs by 2025. These jobs will generate $174 million dollars in direct revenue to the State of Minnesota. Additionally, reconstruction and redevelopment along the mall will create 22,000 construction related jobs.

Governor Dayton’s bonding proposals strengthen the Minnesota’s economy by using state resources to leverage increased private investment. Reinvigorating Nicollet Mall will help bring new jobs and investments to downtown Minneapolis, continuing a trend towards a more vibrant downtown. Governor Dayton is committed to growing our economy, improving quality of life, and Building a Better Minnesota through important projects like Nicollet Mall. [Emphasis added]

The administration’s focus on leveraging private investments is smart, because it really emphasizes the point of a stimulus program. It’s not just to spend money directly to create jobs — it’s to provide sparks to jumpstart the private economy. The Nicollet Mall project is a perfect example of that.

Even if the estimates above end up being significantly over-confident, a small public investment will jumpstart private investments many times larger than the relatively small cost of the project. This small public investment could leverage billions in private funding, creating thousands of jobs and ultimately paying for itself. How many Minnesotans would really object to that?

For a bit more context on just how inadequate the House GOP’s proposed $500 million bonding bill is, here’s a bit of historical context. The chart below shows bonding since 1994, expressed in terms of 2011 dollars:

(Source [PDF])

As you can see, and as I mentioned earlier, the Governor’s proposal is right in line with previous years. The House GOP’s proposal, on the other hand, would be the lowest in two decades.

It makes absolutely no sense to propose the smallest bonding bill in two decades at a time when we’re trying to recover from a recession. The GOP will try to pretend this is somehow about fiscal responsibility, but that’s nonsense. First of all, they’ve already proven that they don’t care about fiscal responsibly. Second, the Governor’s plan would reduce our debt-service payments. There’s simply no legitimate reason to hold back our economy.

Mark Dayton and the DFL are proposing a $775 million bonding bill this session, which is smaller than they should have; $1 billion would be much better. But despite the GOP’s professed commitment to jobs — a commitment we’ve never seen any evidence of — they’re planning a woefully inadequate bonding bill:

[House Capital Investment Committee Chair Larry] Howes says he thinks the maxiumum size for a bonding bill this year in the House is about $500 million.

Sorry, but that’s nowhere near good enough. Not only is it an insufficient job creator, it’s fiscally irresponsible. Interest rates are still historically low. Nobody can deny that our roads, bridges, and schools have been underfunded lately; why not improve them now before interest rates increase?

In fact, the Governor’s bonding proposal would reduce our debt service payments. According to Minnesota Management and Budget [PDF], the ten-year average for bonds is — wait for it — $775 million. That’s exactly what the Governor is proposing for this year, but in a year with very low interest rates. The effect will be to slightly reduce our debt service payments.

Given that the Governor’s proposal would reduce our debt-service payments, I can’t possibly think of a good reason to spend $300 million less and kill thousands of jobs.