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Supplant or supplement?

Published (4/29/2010)
By Lee Ann Schutz
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Most state agencies, local governments and schools relying on the state’s General Fund are facing cuts, but the same can’t be said for many outdoor and clean water projects.

Thanks to a 2008 voter-approved constitutional amendment raising the state’s sales tax, about $60 million is expected to be available in fiscal year 2011 for outdoor heritage and clean water projects.

However, now in the second year of making appropriations, the new constitutional amendment is going through some growing pains — aggravated by the current biennium’s deficit — that may end up needing a court resolution.

The omnibus heritage and clean water fund bill contains recommendations from the Lessard-Sams Outdoor Heritage Council, the group responsible for providing annual input to the Legislature on how funds generated by the dedicated sales tax should be spent.

Approved April 27 by the House Ways and Means Committee, HF3790, sponsored by Rep. Mary Murphy (DFL-Hermantown), awaits action on the House floor. It has no Senate companion.

Council recommendations contained originally in HF2882, sponsored by Rep. Rick Hansen (DFL-South St. Paul), see most of the spending. But two other bills are included: HF3502, sponsored by Rep. Jean Wagenius (DFL-Mpls), and HF3258, sponsored by Rep. Mike Beard (R-Shakopee).

When the House Cultural and Outdoor Resources Finance Division approved the bill April 15, Murphy, the division chairwoman, said project priorities include maximizing non-state funding matches and statewide significance.

The bill would allocate:

• $18 million in projects for prairie restoration and acquisition of certain land and easements to enhance prairie and prairie wetland habitat;

• $17.5 million for projects related to aquatic habitat;

• $16.9 million for several land restoration projects; and

• $5.6 million for forest-related projects, including $1.55 million for Pheasants Forever to acquire land for sharp-tailed grouse habitat in certain northern Minnesota counties.

The bill also appropriates supplemental funds from the clean water fund, establishes a metropolitan area groundwater monitoring fee and an account to provide matching funds for costs of establishing a groundwater monitoring program in the 11-county Twin Cities metropolitan area.

Other provisions call for the Office of the Legislative Auditor to conduct restoration audits. According to the nonpartisan House Research Department, these are scientific evaluations of restored land to determine whether the restoration meets the requirements of the dedicated funds received. Audit costs would be paid by the funds.

The bill permits dedicated funds not spent in 2010 to be carried over for use in fiscal year 2011, and for land acquisitions through fiscal year 2012.

At the end of fiscal year 2011, the outdoor heritage fund balance is estimated to be $9.7 million and the clean water fund $2.7 million, Murphy said.

Issues raised during the committee process are expected to be aired when the bill is considered by the full House, Murphy said.

The main problem is that the constitutional amendment calls for the dedicated funds to supplement, not supplant, traditional funding. Amendment supporters wanted to ensure the priorities supported by the dedicated funds would continue to be enhanced. Murphy said that ultimately the supplement/supplant language may only be resolved by the courts.

“I’ll go forth with the idea that this discussion has to take place with the whole body and then with the Senate, who will become part of the conference committee, because it still isn’t clear enough in my mind,” Murphy said.

Reinvest in Minnesota Reserve funding points to the confusion.

Historically, RIM has received funding through the capital investment law. This year, the governor’s line-item veto, took away its $25 million, which also translated to a federal match loss of $35 million. The council funding recommendation of nearly $7 million was intended to act as a supplement.

Rep. Will Morgan (DFL-Burnsville) questioned whether this could now be considered supplanting the budget, since bonding is RIM’s traditional funding source.

“This is the add-on,” said Michael Kilgore, council chairman. “The amount we are recommending is above our recommendations brought to you in January, before the capital investment bill was put together, and before the governor’s veto. … This is above and beyond the traditional funding.”

Murphy countered, “If this committee takes your recommendation for RIM, how can we say we are not supplanting? … This is turning into ‘not above and beyond,’ but ‘instead of.’”

“Your intentions were correct; the Legislature’s intentions were correct; but it was interfered with by the governor’s veto,” said Rep. Phyllis Kahn (DFL-Mpls). “This is one of the textbook cases we looked at when we said we didn’t want supplanting to happen.”

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