On the very last day of the 2018 legislative session, at 4:35 in the afternoon, nine members of a conference committee met in the Capitol. Within 26 minutes, they approved an entirely new bill that packaged together $825 million in traditional bonding projects, trunk highway funds — and $45 million in projects to protect our air, water and land.
It also included a raid of the Environment and Natural Resources Trust Fund to pay for $98 million in infrastructure and bonding projects that didn't fit into the self-imposed $825 million general bonding bill target. In order to fund extra projects, while still sticking to their public target, legislators turned to another riskier and more expensive form of bonds not backed by the full faith and credit of the state: appropriation bonds.
No public testimony was taken.
In 1988, voters passed an amendment to Minnesota's Constitution dedicating some of the proceeds of the state lottery to the conservation of our state's habitat, water and natural resources. It expressed voters' desire for an additional, stable, pay-as-you-go source of funding for the innovation, research, protection and education projects needed to protect our natural resources — and ultimately ourselves — into the future. It has twice been extended with overwhelming voter support.
Over the last 30 years, the trust has funded over 2,000 projects that tackle issues critical to Minnesota's quality of life, including control of the common carp, protecting water quality and habitat, enhancing parks and trails, and advancements in our clean energy economy. Approximately $45 million a year has been directed to projects selected by a committee of citizens and legislators.
This year's raid will divert $7.84 million — or nearly one-eighth — of the available trust funds each year for the next 20 years. Not to fund innovation or resource protections that hold promise for the future — but to pay for a single year's worth of the bread-and-butter work of government.
Even worse, the raid uses a financing mechanism (appropriation bonds) with a higher interest rate than normal bonds. These projects are estimated to incur $66 million in interest — $35 million more than with traditional bonds.
The bill didn't reappear until the last hour of the session, when it quickly passed. In the midst of voting on thousands of pages of other legislation, many legislators didn't know — and couldn't know — what was in this bill or have time to weigh its implications or insist on changes. Many reluctantly voted yes, not wanting to scrap a bonding bill that funded important projects across the state.
But beyond the pressure-cooker of the end of session, we can see the damage done to the Trust Fund and the public trust. We can't brush off this raid as a one-time event. If it is allowed to stand, the floodgates could open. Further raids are possible on this and other constitutionally dedicated funds, as soon as another legislator is looking for a new funding source.
The trust wasn't designed to cover core functions of government, nor can it do so. This is why the enabling law for the constitutional amendment specifically prohibited these kinds of projects from being funded by the trust.
To disregard these statutes now, after Minnesotans have already committed their lottery dollars to protecting our air, land, wildlife and water, busts the trust with the voters. That's why the Minnesota Environmental Partnership and the Minnesota Outdoor Heritage Alliance joined with seven other organizations to bring a lawsuit challenging the constitutionality of this raid. It is brought not on behalf of our groups, but on behalf of all Minnesotans. This litigation has stopped the sale of these bonds.
Legislators may have felt they had little choice when boxed in at the end of session. But they have an opportunity in 2019 to fix this — to redo the funding for these bread-and-butter projects the right way: with traditional general obligation bonds. This is now the quickest, easiest, cheapest and most honorable route to getting state funds to the targeted projects. We ask our state leaders to make a bipartisan commitment to do so.
Steve Morse is executive director, Minnesota Environmental Partnership. David Carlson is president, Minnesota Outdoor Heritage Alliance.