ELY—Bradley Peterson, a lobbyist for the Coalition of Greater Minnesota Cities (CGMC), updated Ely’s city council on Tuesday about threats to local government funding as well as the $1.24 billion dollar bonding bill that passed during the 2026 legislative session.
The CGMC, which represents over 100 cities outside the Twin Cities metropolitan area, including Ely and Babbitt, advocates on behalf of Greater Minnesota cities on local government aid, property taxes, environment and energy, housing, emergency medical services, economic development, transportation, annexation, land use, and labor.
Peterson offered a brief recap of the 2026 legislative session, highlighting the current divided nature of the state government. Currently, the state House is divided 67-67 while the DFL holds a one-seat majority in the state senate. This makes any legislative project into a four-way negotiation between the governor’s office, the House DFL, the Senate DFL, and the House GOP, Peterson noted. Gov. Walz also signed a two-year budget in 2025 for fiscal years 2026-27 which left little budget negotiation for the 2026 session. Peterson said there was very little talk about spending and taxes during the 2026 session. “That was largely all buttoned up,” he said.
According to Peterson, the 2025 session presented a major threat to local government funding when the Senate Tax Committee proposed cutting $20 million in local government aid. That proposal was defeated and local government aid remained at the same level for the 2026-2027 budget.
With local government aid cuts off the table, Peterson said the CGMC’s primary focus for the 2026 session was a bonding bill, which ended up passing with $1.24 billion allocated for capital investment. “There was a lot of appetite for bonding on the part of the Legislature,” Peterson said. The bill passed 122-11 in the House and 60-7 in the Senate.
The largest allocation in the bill was $420 million for water infrastructure, including $122 million for Public Facilities Authority grant and loan programs. The bill also included $25 million for bridges, $47 million for roads and $2 million for Business Development Public Infrastructure.
This included funding for Ely’s water supply improvement project. The Public Facilities Authority put $2.5 million towards the project, while $3.9 million came from state bonding, and an additional $2 million came from congressionally directed spending. “The stars kind of aligned on this project,” said Harold Langowski, the city clerk.
Peterson expressed some disappointment at the allocation of funds to replace lead service lines, only $15 million. A $240 million investment in 2023 allowed Minnesota to start replacing lines at scale, yet the total cost estimate across the state by the Department of Health is $15 billion to replace the lead lines. “Relying on the general fund or relying on the back and forth and unknowable things in the bonding bill is not going to get the job done,” Peterson said.
Peterson also drew the council’s attention to the Starter Home Act, which was defeated in the house during the 2026 session. The bill would require municipalities to allow smaller homes and increased density rather than allowing those decisions to be made at the local level. CGMC opposed the bill. “The answer, especially in Greater Minnesota, to housing concerns is not a question of zoning, but it is an issue of material costs, labor costs, the fact that there aren’t developers, the cost of infrastructure, things like that,” Peterson said.