On Monday I wrote in Capitol Report that Hausman and her legislative colleagues have been waiting since August for the Department of Management and Budget to issue new rules about the level of debt the state can assume in financing capital investment projects. So I asked Pawlenty why the matter was taking longer than initially advertised.

PIM: There’s another fiscal matter on your desk right now, and that’s the redefinition of the state’s debt guidelines for purposes of bonding. According to Rep. Alice Hausman, Tom Hanson told her back in August that there would be new guidelines forthcoming by the end of that month. And apparently this is still an ongoing process. Can you say where that process stands, and give us any intimation of what the new guidelines might be?

Pawlenty: Yeah, I can. MMB is working on it. They’ve had some informal discussions with legislators in our office about what those might look like. The goal is to try to get an all-in measurement. Two things have happened, of course. The guidelines have never been put into law. It’s not a binding guideline. It’s just a benchmark. Generally that has been 3 percent–that’s 3 percent of the revenues available in the general fund. In other words, the current debt service obligations shouldn’t exceed 3 percent of the revenues in the general fund.

Sen. [Keith] Langseth [DFL-Glyndon, and the chair of the Senate Capital Investment Committee] and others have claimed over the years that that’s an improper measurement–that other states, and bonding agencies and others, look at other things. Like the percent of debt compared to personal income, or the percent of debt per capita by other economic measures. There was a recent study that showed Minnesota had the 42nd lowest state debt per capita of any state in the country.

What I asked Tom [Hanson] to do–there’s a bunch of stuff that’s off the books, to be blunt about it. So we pay for a big chunk of the University football stadium, but instead of carrying that in the debt service obligations, the U floated the bonds, and we send them cash on a legally binding basis, and that doesn’t count. And the U wants a bunch of bioscience buildings, and they put out the guidelines, so that gets moved into a special account. And there’s other things like that around the state.

So I told Tom, bundle up all of the–either actual debt service obligations, or all of the structural payment obligations that are designed to pay for capital debt, and put it all in one measurement. And give me that measurement. So that’s what he’s working on….

The point is, legislators–at least many legislators–long ago disregarded the 3 percent. And don’t think it’s a meaningful measure. Would like something different, a more robust measurement–I think with a goal of doing more bonding, from their standpoint. Hanson’s preparing something that would include everything [and] would line up with what the bond houses look at. That 3 percent is not what the bond houses look at. When we go to New York to justify our finances and the bonds, they have other measurements. I said, align our measurements with their measurements, because that’s why we have them in part. So that’s what he should be coming out with in the next few weeks or month.

PIM: But it will be prior to session?

Pawlenty: Yes. The Legislature–I don’t want to speak for them, but some of the leaders in the bonding debate don’t really care about the guidelines. They’re going to pass whatever bill they want, which is unsettling. The forecast in February called for a bonding bill of $700 to $800 million. That’s based on the fact that revenues are going to go down. We’ve got legislators talking about a $1 billion, $1.5 billion bonding bill. So I’m not so sure they’re focused on this guideline anyhow.

Reached by phone late this afternoon, Hausman reacted derisively to the governor’s claim that it’s hard to round up all the state’s debt, on or off the bonding list.

“It isn’t difficult to get the information,” she said. “We have all that stuff available to us all the time. It’s not hard to find. it’s kind of silly to say that that’s the holdup.

“I personally–I’m not the governor, and I could have that in 24 hours. My fiscal analyst could do it.”