Groups urge vetoes over ‘raid’ of environmental trust fund

Published 7:50 pm Thursday, May 24, 2018

MINNEAPOLIS — Environmental and conservation groups urged Gov. Mark Dayton on Thursday to cancel $98 million in projects funded by what they consider an improper raid on a trust fund that depends on state lottery proceeds.

The wastewater infrastructure projects for smaller communities, and some other projects, are part of a $1.5 billion public works borrowing bill. But the money for them would come out of the Environment and Natural Resources Trust Fund. The 23 groups said the trust fund was never meant to be used for big capital projects, which are normally funded with bonds repaid from the state’s general fund.

They asked Dayton to use his line-item veto power to cancel them.

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The trust fund’s projects are normally vetted by the semi-independent Legislative-Citizens Commission on Minnesota Resources. But the idea of tapping the fund for the disputed projects didn’t surface until late in the session. The language to allow it wasn’t added to the big borrowing bill until the final hours of the session, and the proposal never went through the commission’s arduous review process.

However, using bonds financed by the trust fund helped keep the longer list of projects financed from the general fund below $1 billion, a Republican priority.

Rep. Josh Heintzeman, a Republican from Nisswa and a co-chair of the commission, said Dayton shouldn’t veto the projects, which he called a creative and appropriate use of the trust fund. One of the biggest things Minnesota can do to protect water quality is to ensure adequate wastewater treatment, he said.

“I think it’s really smart what we are trying to do,” he said.

Dayton, a Democrat, has not said publicly whether he’ll reject any parts of the borrowing bill. He vetoed two massive tax and budget bills on Wednesday that passed in the waning days of the session.

The maneuver late in the session with no chance for public input violates the trust of voters who approved the constitutional amendment that authorized the state lottery and using its proceeds to fill the environmental trust fund, said Steve Morse, executive director of the Minnesota Environmental Partnership, which drafted the letter.

Current state law prohibits using the trust fund to repay bonds or to fund municipal wastewater treatment projects. The bill would change the statute to allow it. Dayton can line-item veto money for the disputed projects, but not the revised statutory language, if he signs the overall bill.

The groups upset with the move likely would have supported the disputed projects had they been funded through normal borrowing or paid for in cash, said Trevor Russell, water program director for Friends of the Mississippi River, one of the groups that signed the letter.

“The door is now open for future legislatures to raid the environmental trust fund really for any purpose,” he said.

Nancy Gibson, a co-vice chair of the commission, expressed frustration with being shut out of the decision and the lack of proper public hearings on the plan. She said the panel already has requests for $191 million in projects statewide for next year, and if the plan goes through there will be “significantly less” money available for them because the fund will have to pay principal and interest on the new debt for 20 years.

“We don’t do capital funding unless it’s a very unique project,” she said. “It’s not what the environmental trust fund was designed for.”