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Legacy funds would pay PILT

Published (5/6/2011)
By Sue Hegarty
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A proposal to set aside a portion of the Legacy funds to pay counties a payment in lieu of taxes has rerouted the Legacy funding bill to the House Taxes Committee before it can advance to the House floor.

Sponsored by Rep. Dean Urdahl (R-Grove City), HF1061was approved as amended

May 3 by the House Legacy Funding Division and two days later by the House Environment, Energy and Natural Resources Policy and Finance Committee.

The bill includes appropriations to all four Legacy funds: one year of funding for the Outdoor Heritage projects, and two years of appropriations for the Clean Water, Parks and Trails, and the Arts and Cultural Heritage.

As proposed, when new state land is acquired with the Legacy funds, a portion of the money would be transferred into a land management account to pay for ongoing maintenance associated with newly acquired land, including payment in lieu of taxes.

Rep. Jean Wagenius (DFL-Mpls) said using dedicated tax revenue to pay local government “property taxes” is not what the voters intended when they passed the 2008 constitutional amendment, which dedicates 0.375 percent of sales tax receipts to the four funds.

Two of the funds were particularly criticized.

The Parks and Trails Fund is primarily divided three ways between the Department of Natural Resources, the Metropolitan Council and a state grants program. Urdahl proposes changing the appropriations formula from a 43-43-14 percent split to a 40-40-20 percent split. The seven-county metropolitan area would receive a disproportionate amount, because the Twin Cities area generates the majority of the tax revenue and has a higher percentage of park users, Wagenius said.

The Arts and Cultural Heritage account would become mainly a competitive grants program for public broadcasters, zoos, libraries, language preservation educators and several other groups that have received set amounts in the past. The Minnesota Humanities Center, the Department of Natural Resources, Department of Agriculture and the Department of Administration would serve as grantors.

“The essence is not to change what’s been done. It’s just a different way of doing it,” said Urdahl, noting the earmarks would go away and the responsibility for allocating the funds would change.

Rep. Ryan Winkler (DFL-Golden Valley) said there’s at least one earmark that remains in the bill: $450,000 for capital upgrades at two veterans camps, “which is the least defendable” expenditure of Legacy funds, he said.

The bill also would create a State Capitol Preservation Commission, which would receive $550,000 to conduct pre-design work in preparation for bonding for capital improvements next year. Some legislators want the commission to examine whether the second floor balcony, overlooking the mall, could be reopened to the public. There is concern by others that work to bring the balcony into compliance with ADA standards would significantly affect the historical and aesthetic appearance of the building and could be a huge liability to the state.

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