State Bonding: Use Land Use as Criterion for Funding

Community assets help make places productive, attract residents and visitors, and establish identity. Some, like historic buildings and venues for arts events, can become iconic. While less pleasing to the eye, we also rely on community assets that treat our wastewater and make our transportation system safer.

Sustaining quality physical infrastructure is a critical public function, and cities and states are heavily involved in its planning and finance. Equitable access to clean water, excellent schools and safe streets are goals we all share regardless of geography or ideology. This year, local governments in Minnesota submitted 145 proposals for state capital funding for purposes ranging from civic building repair to public safety, energy to water treatment and management.

Source: Minnesota Management and Budget.
In Minnesota, requests for state capital available through bond issuance are accepted and vetted in a thorough process. Local governments and state agencies apply for capital funds, and legislative committees spend countless hours touring sites and deliberating proposals. They receive information detailing the rationale, other capital funding sources, energy efficiency of building designs and ownership of each project. All these items are important – but they may not go far enough to establish efficient land use as a criterion for state funding. For example:


What is the operating cost projected for the facility and what is the long-term local financing plan for its operation and maintenance? Information submitted to the state only details whether local officials anticipate seeking state operating funds in the future. It is in the interest of state taxpayers to invest strategically in local projects; it is also in their interest to ensure that operation and maintenance are adequately funded.


Are projects such as parks or civic buildings located in currently developed places, using existing infrastructure? If new community assets require investment in substantial additional infrastructure such as roads, this increases the likelihood of resulting budget stress in the future. From the state’s perspective, this may suggest “leverage” – but as we have all been reminded in recent years, leverage can work to the positive or the negative.


Part of the premise of state requests for investments is that projects will encourage and sustain private enterprise across Minnesota. It’s a sound premise: The private sector thrives in places with effective, integrated infrastructure. That’s why using land use to evaluate requests for state capital funding represents another place to start in increasing productivity.