House GOP, Dayton administration remain divided over how to fund new veterans homes

Republican lawmakers used a Wednesday hearing of the House State Government Finance Committee to further solidify their position of using funds reserved for U.S. Bank Stadium to pay for three new veterans homes in Greater Minnesota while criticizing Gov. Mark Dayton administration’s pushback on the idea.

The hearing was meant to provide more information on the so-called stadium reserve fund, which is tucked into the General Fund, and compare it to the administration’s proposal to sell bonds – or borrow – to fund veterans homes in Bemidji, Montevideo and Preston. The committee spent much of its time highlighting what Rep. Sarah Anderson (R-Plymouth) called “the excess of the excess” in the stadium reserve fund and repeatedly wondering aloud why the administration was protective of the stadium funds.

With his office saying he had a scheduling conflict, Minnesota Management and Budget Commissioner Myron Frans submitted a letter to the committee outlining the administration’s issues with the House Republican proposal, saying their funding was inadequate, that borrowing is “the best source” to fund the massive construction projects and using stadium funding could put taxpayers in trouble if there’s an economic downturn.

WATCH Full video of the committee hearing

In his letter, Frans and MMB estimate one veterans home will cost the state $24.9 million, while Republicans have banked on $26 million to cover all three. Rep. Greg Davids (R-Preston), who is pushing for a veterans home in his district, told the committee those numbers reflect “quite a disconnect.”

The nonpartisan House Fiscal Analysis office states there’s $26.8 million in the fund for Fiscal Year 2017 and it will grow to $38.4 million in Fiscal Year 2018. In its February Budget Forecast, MMB said the stadium reserve fund would reach $120.2 million in Fiscal Year 2021.

“It’s a better option from a fiscal standpoint,” Anderson told the media following the hearing. “We have the funds.”

“At this time, MMB does not recommend placing a bet on a significantly reduced stadium reserve balance being sufficient in an economic downturn,” Frans wrote. “Furthermore, the state should consider allowing the fund to grow.”