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Minnesota Legislature

Less means more

Published (4/29/2011)
By Sue Hegarty
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For Rep. Dean Urdahl (R-Grove City) it’s all about trying to find some middle ground as he tries to satisfy recipients of the Parks and Trails Fund, one of the four main appropriations in the Legacy funding bill.

“I have to try to find some kind of middle ground where nobody’s happy,” he said.

When trying to divvy up more than $38 million a year between the Department of Natural Resources, the Metropolitan Council and a Parks and Trails Fund grant program, he asked for help from members of the House Legacy Funding Division, which he chairs.

The help he got depended on members’ perspectives: Some wanted the DNR and the Met Council to each receive

42 percent of the funds with the remaining 16 percent used for grants. Others argued for a 43-43-14 split, but also denying the Met Council grant eligibility. Urdahl decided the best way to divide the funds is 40-40-20, and still allow the Met Council to apply for the 20 percent grant program.

He was quick to remind the agencies that even though their percentages dropped, the amount they’ll receive is still more than previous appropriations due to growth in the fund.

“Remember, nobody gets cut. You’re getting less of more,” Urdahl said.

That was no consolation for division members who said the Twin Cities metropolitan area got the short end of the stick.

Rep. Ryan Winkler (DFL-Golden Valley) said the split was inequitable and slanted toward Greater Minnesota. In an 8-3 roll-call vote April 27, division members approved HF1061 and referred it to the House Environment, Energy and Natural Resources Policy and Finance Committee.

“It doesn’t meet the fairness test: 55 percent of the population is in the metro. While no one expects the same percent to be spent (in the metro), there needs to be reasonable balance,” said Rep. Jean Wagenius (DFL-Mpls).

The legacy funds are revenue generated from a three-eighths of 1 percent sales tax that voters approved in a 2008 state constitutional amendment. The other three funds include the Outdoor Heritage, Clean Water, and Arts and Cultural Heritage funds.

No substitutes

Rep. Mary Murphy (DFL-Hermantown), the former division chairwoman, supported the bill, saying “for the most part, it follows the principles and outcomes previously adopted.” As the bill moves through the committee process, she said it’s important to emphasize that the funds are to be used to supplement and not supplant traditional means of funding.

“It’s not our intention to substitute in any place,” Urdahl said. “We distribute money to various entities, and they then make the determination of how that money is distributed. From my standpoint, we are not saying to anybody, ‘use this money to substitute.’”

The Lessard-Sams Outdoor Heritage Council is the only formal council that makes recommendations on how to spend 33 percent of the funds. Though she doesn’t support the idea, Murphy said there may be some who would like to see similar councils for the other three funds.

One way the LSOHC ensures the money they distribute is not substituting for traditional funding is by requiring very detailed planning reports. For example, applicants must report the number of employees and their salaries funded through an appropriation and any capital equipment they plan to purchase valued at more than $10,000, according to Bill Becker, LSOHC executive director. Anticipated outcomes also must be listed and are published on the council’s website.

The bill under consideration also states that if someone files a lawsuit and a court determines that an appropriation unconstitutionally substituted for traditional funding sources, the appropriation is canceled.

Accountability and transparency

Last year, the state regional libraries offered a speaker series of book authors funded in part with legacy dollars. One particular author was paid roughly $45,000, which division members said was excessive. When considering how much money to appropriate in the current funding proposal, Urdahl sent the libraries a strong warning by deducting $45,000 from their expected appropriation. He considers new accountability and transparency measures a hallmark of the bill.

Previous Legacy fund recipients were not sure how much of their appropriations they could use for overhead costs, so some took nothing while others reimbursed themselves. Drafts of the bill would have placed a 5 percent cap on overhead costs, but after discussions, Urdahl said he removed any caps. Rather, recipients will need to justify their administrative costs and reimbursements. Recipients of a direct appropriation also would need to submit a report to the Legislative Coordinating Commission and the Legislative Reference Library containing all available and required information.

“It’s going to be audited, and if we find it’s a problem, a cap will have to be placed,” Urdahl said.

Wagenius said she appreciates the added accountability but there’s one thing missing. A lot of the projects include acquisition of easements, but when easements are written, there is no one to review them prior to adoption, she said.

“How an easement is written is critical,” she said.

Also, Board of Water and Soil Resources appropriations need to ensure that there are positive outcomes. Projects should do more than “sprinkle money across the land,” she said.

Special projects

There was a fund balance of $2.6 million when Urdahl became division chairman this year. He proposed taking $1 million of the balance for two new arts and cultural heritage projects: a one-time $450,000 appropriation for upgrades to two military veterans’ camps and $550,000 to establish a State Capitol Preservation Commission, who would lead pre-design work for State Capitol Building repairs. There is bipartisan support for using the funds for the pre-design work, in preparation for a bonding bill next year. Urdahl said he’s discussed the pre-design proposal with Gov. Mark Dayton and he was “receptive” to the idea.

“I think it will get us off the dime,” Murphy said in support of the provision.

However, one of the reasons Winkler voted against the bill was because he opposes using Legacy funds for capital improvements. Besides the pre-design costs, the Arts and Cultural Heritage funds would be spent on capital improvements at the veterans’ camps and at county fairs.

Two other provisions in the House bill, not in the Senate’s or governor’s recommendations, are two new special revenue accounts within the DNR. The purpose of the $5.6 million Outdoor Heritage Land Management account would be to pay for ongoing costs for newly acquired public land. For example, if the DNR purchased land with legacy funds, a portion of the funding would go into the land management account to pay for long-term maintenance on the land, such as occasional seeding or prescribed burns. Likewise, $750,000 would be set aside in a Forests for the Future Conservation Easement account.

The land management account would also be used to reimburse local governments for taking land off the property tax rolls when the state acquires it, also known as payment in lieu of taxes, or PILT. Wagenius said she agrees with the concept of planning for ongoing maintenance but questions whether it’s an appropriate use of the Legacy funds to pay PILT.

Chances are good that if the House and Senate pass the bills, they would end up in a conference committee to iron out the differences, such as the PILT issue.

Sen. Bill Ingebrigtsen (R-Alexandria) sponsors the Senate legacy funding bill, SF158, which was expected to be heard in the Senate State Government Innovation and Veterans Committee April 28.

“I expect the Senate to be receptive to many of our ideas,” Urdahl said. “There’s a lot of ownership of a lot of people in what we put together.”

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