Once again it’s the time of year when political pundits dust off their crystal balls and have a crack at predicting what the Minnesota legislature will accomplish, or at least attempt to accomplish this session.

A new mantra can be heard in the Capital; jobs, jobs, jobs! The proposed merger of Northwest and Delta airlines and its accompanying move of Northwest’s corporate headquarters out of Minnesota and Macy’s recent regional headquarters closing, exemplify the concern.   

This is a bonding session. Legislators are working to determine how much the state will borrow, through the sale of general obligation bonds, to fund state building projects. While there is general consensus about the size of the bonding bill; $1 billion, the House speaker has said that more than $4 billion in requests have been received.

The opening gamut in this discussion has been laid out by the governor’s proposed $965 million bonding package; of which about 40 percent or $416 million would go to transportation, replacing bridges, improving roads, funding the Central Corridor light-rail project between Minneapolis and St Paul. The light-rail project funding is particularly important this session in order to capture federal funding, $258 million for higher education projects, $175 million for environmental and out door projects, $96 million for economic development, $68 million for state building preservation, $50 million for veterans and the military, and $41 million for public safety and corrections. Legislators will have to say “no” more often than they may say “yes” to bonding projects, a particularly hard thing for any elected official to do in an election year.

This legislative session, legislators will be tackling the forecasted deficit, presently projected at $373 million. This state forecast will be revisited at the end of February and a lot of state officials are publicly predicting it will be far worse. Estimates now exceed $800 million. State revenue is dependent on three primary sources; income tax, sales tax and property tax. Revenues from income and sales tax sources are likely to be down because of recessionary factors, property taxes revenue will ultimately feel the effect of record level foreclosures, and inflationary factors are increasing expenses. The choice will boil down to increasing revenues, decreasing expenses or as some advocate; reducing targeted corporate taxes with the goal of “growing the economy.”

This legislative session, legislators have received recommendations of a legislative commission and governors taskforce on health care reform. While legislators are taking these recommendations seriously, many recommendations are controversial. The question is: will the recommendations of these two work group reports merely provide the fodder for further discussions or result in real action?

The fact that transportations is a top agenda item this session should surprise no one. What would be a surprise however is if the legislature and governor actually produced a transportation package. Whether they’re able to negotiate a compromise will depend a lot on if  the governor’s office and the legislature can reach an agreement on legislative transportation proposals to increase tax and fees or the governor’s proposal to borrow the money to meet the need. A wild card in this discussion is, when and if, the legislature takes up the question of confirming Transportation Commissioner Carol Molnau.