By Esme Murphy

MINNEAPOLIS (WCCO) — Gov. Tim Walz rolled out the first phase of his proposed $2 billion spending bill.

Walz is asking for a record $276 million for affordable housing. It’s all part of the governor’s two-year bonding proposal.

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He is calling it his “Local Jobs and Projects” plan. Republicans are calling it expensive.

With the state of Minnesota sitting on a $1.3 billion surplus, Walz says now is the time to borrow and spend big on projects across the state.

“We are in the place to do this. The need is there. We have historically-low interest rates,” Walz said. “To not do this is not only wrong for future investments, but is fiscally irresponsible.”

The governor is calling for $276 million for new affordable housing, making the announcement at this newly-opened subsidized apartment building in Minneapolis that is now home to 44 formerly-homeless people, including Minnesota National Guard veteran Terry.

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“I love it here,” Terry said.

The governor’s proposal would create 1,000 to 1,600 affordable units.

Republican House Minority Leader Kurt Daudt says with the state in such good shape, he would like to see a bigger bonding, bill too — but his idea of big is smaller than the governor’s.

“In addition to bonding, what we would like to see is let’s reduce what costs to build a house,” Daudt said. “Two billion [dollars] is pretty extreme. It’s twice what we have done in the last 10 or 15 years.”

The argument at the legislature over how much to spend on public works will take place against the backdrop of an election year. All 201 seats in the Minnesota House and Senate are up for election this year.

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Republican Senate Majority Leader Paul Gazelka says he would prefer a bonding bill closer to $1 billion. The Minnesota legislative session starts on Feb. 11.

Esme Murphy