MANKATO — The next week will likely determine the immediate fate of a $27.8 million plan to build a 1,100-seat performing arts theater in Mankato and substantially upgrade the civic center and All Seasons Arena.

Funding to pay nearly half the cost of the improvements — with local sales tax revenue covering the rest — is included in a public works bill the state House and Senate are expected to approve today. Gov. Tim Pawlenty, who had promised to veto a previous version of the bill, indicated Wednesday he will sign it.

But the Republican governor also said he will trim the bill with line-item vetoes, and earlier versions of the Mankato proposal were axed by Pawlenty in past legislative sessions.

“It’s still too large but it’s a bill we can work with,” Pawlenty said Wednesday of the $1 billion bonding bill. “We will just have to slim it down to something that’s more reasonable and responsible and affordable.”

The latest bonding bill is more to Pawlenty’s liking partly because it’s a bit smaller than the $1.1 billion bill originally approved by lawmakers in the Democratic-controlled Legislature. Even more important, the current bill includes funding for an expansion of the Moose Lake treatment facility for sexual offenders and for other projects important to the governor.

Because of his line-item veto authority, Pawlenty can sign the bill, get the projects he wants and reduce the legislation to his preferred size by eliminating the construction he doesn’t favor.

He didn’t say Wednesday which projects or how much he would trim from the bill.

Pawlenty released a bonding proposal in January calling for $685 million in general obligation bonds — which finance immediate construction and are repaid with general state taxes over two or three decades. That plan didn’t include the Mankato project, design money being sought by Minnesota State University for a new clinical science building, or funding to improve an outdated railroad serving Sibley County — all of which are in the legislative bill.

Supporters of those projects can take some hope from Pawlenty’s later statements that he was willing to accept a bill of about $725 million. Still, to reach that figure the governor would need to eliminate $275 million from the legislative bill.

The governor has spared funding for the Minnesota Valley Regional Railroad in previous years when line-item vetoing bonding projects. The railroad, which serves Sibley County and several others from the western Twin Cities to southwestern Minnesota, would receive $5 million in the legislative bill — down from $6.5 million in the earlier version.

There’s $1.3 million — reduced from $1.9 million — to design the proposed clinical sciences building to house MSU’s nursing, dental hygiene and speech and hearing departments.

Likely the most vulnerable local funding is the $12 million — already cut from the $13.9 million requested — to help pay for a $23.2 million auditorium/theater on the Second Street side of the civic center and about $4.5 million in improvements to the civic center and to All Seasons Arena. Pawlenty has specifically mentioned civic center projects as items that unnecessarily inflated the size of the DFL bonding bills.

Sen. Kathy Sheran, DFL-Mankato, is hoping that Mankato-area residents have persuaded the governor that the project is a wise use of state dollars because it will boost the local economy, provide valuable facilities for the entire region, and allow Mankato to receive the sort of state assistance that arenas and civic centers in other Minnesota cities have received for years.

A letter-writing campaign making those arguments produced an impressive number of letters, Sheran said. The key may be whether a smaller group of locals got involved and were persuasive.

“We’ve asked specifically people from our area who might have the ear of the governor and the trust of the governor to call and ask as well,” she said.

Whatever the fate of the Mankato funding, Sheran said it’s preferable to get a bill in mid-March — even if some projects are vetoed — than to wait until late-May in hopes of negotiating a bill in the final days of the legislative session that Pawlenty agrees to sign in its entirety. Earlier approval of the bill means that projects can be underway and out-of-work construction workers can be on the job as soon as the frost is out of the ground.

“Under any circumstance, it will employ more than are employed now and that’s a good thing,” she said.

— The Associated Press contributed to this story.