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Continued: Legacy funds being used to cover cuts in conservation

Ten years ago, the state paid $150,000 to learn whether Lake Mille Lacs was polluted. It was the first step in a critical effort to protect one of Minnesota's largest and most beloved lakes, one shared by three counties, multiple watershed districts, resort owners, cabin owners and tens of thousands of anglers.

Now, the project is getting another $150,000 to actually start fixing the problems -- with native grasses along fragile shores and rain gardens to keep phosphorus out of the water.

Only this time the money didn't come from the state's regular coffers. Instead, it came from sales tax income from the 2008 Legacy Amendment.

That, conservationists say, is a clear case of how the Legislature is ignoring the will of voters and clear constitutional guidance by substituting Legacy funds for traditional tax revenues that funded longstanding conservation projects.

"This is the red flag," said Cheryl Appeldorn, a research consultant who conducted a new analysis of state and Legacy spending for Conservation Minnesota, a statewide advocacy group.

By that tally, several million dollars in Legacy funds had been used by legislators to offset disproportionate budget cuts handed out to the state's conservation agencies.

It's been four years since voters overwhelmingly voted to raise the state sales tax by a whopping $250 million annually -- mostly to protect Minnesota's outdoors -- and arguments at the Capitol over exactly what voters expected are as heated as ever.

"It's a real tough issue," said a clearly frustrated Sen. Bill Ingebrigtsen, R-Alexandria, chairman of the Senate Environment and Natural Resources Committee. "If a statute could change that in some way, I'd be all for it, to put it to bed one way or the other."

The Legacy Amendment authorized a three-eighths of 1 percent increase in the state sales tax, a clear message that voters were willing to raise their taxes for causes close to their hearts. In this case, one-fifth of the new revenue is dedicated to arts and culture and the rest to clean water, conservation and parks and trails.

The amendment was proposed by advocates as a permanent solution to a long-term erosion of environmental protections.

Since 1991, the amount of general-fund dollars devoted to clean water and the outdoors had declined by half -- down to 1 percent of the general-fund budget, Conservation Minnesota said. The amendment passed overwhelmingly.

'Supplement'

From the start, the key point of contention was a phrase in the amendment that says that the new revenue "must supplement traditional sources of funding for these purposes and may not be used as a substitute."

Last year, the debate over what exactly that phrase meant became even more heated as legislators struggled through a wrenching budget crisis that resulted in a monthlong government shutdown and sobering budget cuts.

"It's very tempting," said Ingebrigtsen, describing recent efforts to use Legacy funds for everything from electric carp barriers to a Vikings stadium. "It's the only place where there is any money. I almost have to put an armed guard at the door."

There is no question, say environmental and conservation advocates, that the Legacy money is making an impact in restoring and protecting the prairies and forests that are part of the state's heritage and accelerating the enormous job of assessing and cleaning up its lakes and rivers.

"There are impacts in every county in Minnesota," said Paul Austin, executive director of Conservation Minnesota. "The question is, is it a net gain compared to previous budgets?"

Many say it isn't.

Last summer's budget deal between DFL Gov. Mark Dayton and the Republican-led Legislature cut most state budgets by 5 or 10 percent, according to the Conservation Minnesota study.

But the five state agencies devoted to clean water and conservation were dealt much deeper cuts, totaling a 25 percent reduction in general-fund support for conservation. The Department of Natural Resources, for example, lost 15 percent, primarily in parks and trails and forest management. The Pollution Control Agency (PCA), charged with protecting water in the state, lost 40 percent of its general-fund budget.

At the PCA, the biggest hit was taken by the small Clean Water Partnership program, which since 1986 has helped lake associations and small local governments to study pollution in lakes and rivers. It's done so with a steady flow of $2.3 million annually appropriated by the Legislature from the state's general fund -- enough for 12 to 15 projects per year. Since 2010, it has also received about $800,000 per year in Legacy funds.

This year, however, the Clean Water Partnership got only $400,000 in general-fund money from the Legislature, with the result that Legacy funds became its primary source of grants for big lakes like Mille Lacs and small ones like Lake Harriet in Minneapolis.

That, advocates say, was a clear case of "supplantation.'' In order to fulfill the intent of the Legacy Amendment, advocates argue, the Legislature has an obligation to maintain the same level of environmental funding -- about 1 percent of the state budget -- that was in place when the amendment passed in 2008. Cuts should be proportional to other agencies, they say.

Sources or levels?

"That is a totally valid, legitimate argument to make," said Judy Randall, an evaluator in the legislative auditor's office who helped conduct a long-awaited analysis of the issue.

But, she added, it's not that simple. The amendment does not require the Legislature to maintain a certain level of spending on the outdoors. It merely protects "traditional sources, not traditional levels," she said.

The legislative auditor recommended that the Legislature pay closer attention to historical sources of funding for environmental protections and perhaps to require financial analyses. If nothing else, that would lay out the rationale for its decisions if it's challenged in court, the report said.

At this point, however, there is no resolution in sight -- neither proposed legislation nor a lawsuit that would put the question in the hands of a judge. As a result, the tug of war over divining the hearts and minds of voters is not going to go away, the legislative auditor's office told legislators.

"The Legislature will have to struggle [with these concerns] over the life of the amendment," Randall told Ingebrigtsen's committee at a recent hearing.

In the end, the auditor's report only served to muddy the issue further, said Gene Merriam, a former state senator and DNR commissioner and now president of the Freshwater Society.

"It was harmful," he said. "The independent, objective legislative auditor said, 'It's unclear what the language means.'"

It was also an invitation for future Legislatures to continue picking away at all other environmental funding, he said.

"You are not likely to see very direct substitution," he said. "But the risk is continued erosion and the indirect substitution that we are already starting to see."

Josephine Marcotty • 612-673-7394

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  • Jamie McBride, left, and Mike Perniel, of the Minneapolis Park and Recreation Board, took water samples from Lake Harriet last week.

  • Jamie McBride took water samples at Lake Harriet. State budget cuts led to a drastic drop in funding for agencies like the Clean Water Partnership, which now relies primarily on Legacy Amendment income.

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