Minnesota Could Risk Federal Infrastructure Dollars If Legislature Doesn't Act, MnDOT Says

ST. PAUL, Minn. (WCCO) -- Minnesota could risk losing out on millions in federal funding provided by the $1.2 trillion infrastructure law Congress passed last year if the state legislature doesn't act soon on the transportation budget, the Minnesota Department of Transportation warns.

The federal infrastructure law, which includes $550 million in new spending, is estimated to bring $7.3 billion in total to Minnesota for roads, bridges, transit and more, according to Minnesota Management and Budget. Of those billions, most of it -- 84% --needs some sort of state match, which is on a sliding scale.

But the legislature adjourned without action on those state matching funds or a transportation budget that would've authorized MnDOT to spend its share of the new federal money allocated to the agency this biennium for roads and bridges.

"Other states are moving forward with putting their [Infrastructure Investment and Jobs Act] dollars to work, but Minnesotans won't see any benefits from that money until the Legislature provides the necessary budget authority," said Jake Loesch, director of communications at the MnDOT, adding it will cause project delays and reduce purchasing power.

Loesch also raised concern that without action on matching state funds, it puts the state at a disadvantage when applying for separate competitive grant funding from the legislation. Having those funds approved "makes Minnesota in the best position" against other states for the additional money, he said.

Sen. Scott Newman, R-Hutchinson, who chairs the Senate transportation committee, pushed back against the concerns of MnDOT, Gov. Tim Walz and others that the legislature needs to act with urgency in the coming weeks and months to fully leverage funding from the federal law.

He believes there's still time before the state would really lose out and there's no need for a special session to finish the work, though he acknowledged it would have been "better" if there was no impasse between the House DFL and Senate GOP over the supplemental transportation budget this year.

MnDOT can still apply for grants without funding sources identified, he said.

"It is not Armageddon if we don't act right now," Newman said. "There is time, and further discussions, I have no doubt, will be ongoing. But I do not think it's as dire as MnDOT and the governor and the House have said it is."

The governor has said he wants to call the legislature back for special session if legislative leaders and key lawmakers can wrap up negotiations, but it's unclear if that will happen. He shares the same urgency as Loesch and MnDOT about transportation funding.

"The idea that we would leave federal dollars on the table because we wouldn't be able to put this matching money in just doesn't make any sense," Walz said.

The legislative session ended with many key issues still unsettled, including public safety, education and transportation funding.

Republican leaders have said they don't want a special session, but House Minority Leader Kurt Daudt, R-Crown, last week said he was "open" to one to pass a bonding bill and passing state matching funds.

American Society of Civil Engineers in Minnesota recently gave the state an overall "C" grade for its infrastructure, with the lowest marks for transit (C-) and roads (D+).

"It's not a huge amount of money that's magically going to be able to replace everything, but every little bit helps," said Katie Zadrozny, an engineer with ASCE who contributes to infrastructure report card, said of the federal infrastructure law.