Purpose of the Bill

This bill aims to improve the management of Minnesota's state finances by requiring a detailed forecast of the state's bonding capacity. It mandates the preparation and delivery of a bonding bill forecast to key government officials, ensuring transparency and informed decision-making regarding capital investments.

Main Provisions

• Debt Capacity Forecast: The bill requires the Commissioner of Management and Budget to create a debt capacity forecast in February and November each year. This forecast must include details of the state's long-term general obligation debt, such as bonds and notes. It should cover the actual debt service amount for the past two fiscal years and provide estimates for the current and upcoming six fiscal years. It also needs to account for authorized but unissued debt and future borrowing capacity.

• Bonding Bill Forecast: The bill establishes that a new forecast, specifically focused on the bonding bill, must be prepared and delivered within the same timeframe. This bonding bill forecast should specify the maximum amount of general obligation bonds that can be issued by the state. The issuance needs to ensure that the resulting debt service remains under 2.5% of the total nondedicated general fund revenues, maintaining fiscal responsibility.

Significant Changes

• It introduces a formal requirement for a bonding bill forecast, which was not previously mandated. This change seeks to provide a clear cap on state-issued bonds relative to the general fund revenues, ensuring that debt service expenses do not overly burden the state budget.

Relevant Terms

debt capacity forecast, bonding bill forecast, general obligation bonds, debt service, fiscal responsibility, capital investment, state finances, Minnesota legislature, nondedicated general fund revenues.