2008 amendment offers buffet of outdoors, arts funds

Moose meeting

By Don Davis

The moose population in northern Minnesota’s forests is dwindling, but a tax that voters raised in 2008 could help save the giants.

“All of us came together on this project, Minnesota Moose Collaborative, to do what we know would work for one element to improve the moose’s existence: improving habitat,” President Mark Johnson of the Minnesota Deer Hunters Association said.

The $3 million the organization has received is being used to clear areas of forest of brush, some of which was 20 feet tall, to make way for better grazing areas. It also is being used to plant trees to give shade from the warm summer sun.

“From a moose’s standpoint, it is like we renewed the buffet,” Johnson said.

“Buffet” may be a good way to describe where the moose project received its funding, because like a food buffet gives a diner lots of options, a large variety of funding opportunities came in the “legacy amendment” voters approved in 2008.

In what is known as the Clean Water, Land and Legacy Amendment, Minnesota voters approved a constitutional change to increase the state income tax three-eighths of a percent. In the first six years of funding, including money legislators approved this spring, about $1.5 billion has been split among four funds: outdoor heritage, clean water, parks-trails and arts-cultural.

Revenue voters raised in 2008 provides money for projects as varied as $334 so the Becker County Historical Society could microfilm newspapers to $36 million for one of several projects to protect the state’s forests.

Nearly 10,000 projects have received funding from the state funding buffet.

The amendment requires that all money be spent on things the state otherwise would not fund. The sales tax increase ends after 25 years.

In the program’s sixth year, which is just beginning, $378 million is being spent on projects that otherwise would not have received money.

Pam Aakre, a Clay County Fair Board member, credits a mural painted on the back of the grandstand to the funds.

“We would not have been able to do it without legacy funds,” she said, a comment heard across Minnesota from funding recipients.

A handful of other states have looked into expanding outdoors-related spending, and a few did by raising taxes, but Minnesota lawmakers found they needed to include money for arts and culture projects, such as theaters and artwork, for the measure to get enough legislative votes. The amendment faced relatively mild opposition once in front of voters, and indications are it passed mostly to boost outdoors program spending.

“Minnesotans feel so strongly about our great outdoors, when given the choice they are willing to pay for it,” Executive Director Brett Feldman of the Minnesota Parks and Trails Council said.

And it happened during a recession. It allowed Minnesota to increase spending in the four areas at a time when the economy forced other states to cut back.

“I think it is just phenomenal,” state Natural Resources Commissioner Tom Landwehr said of the first five years.

“We are in the early stages of constructing a house,” Landwehr said, illustrating why he and others think it is too early to declare the legacy amendment a total success.

Those involved with legacy funds generally agree the biggest problem has been geographic balance, especially in parks spending.

“One of the most disappointing aspects to us is our systems had to battle one another for limited resources,” Feldman said about state, greater Minnesota and Twin Cities parks.

Creation of a greater Minnesota parks organization has smoothed things out, but “as long as there is money, there always are going to be battles,” Feldman said.

Minnesotans cannot get a full handle on geographic distribution of the money because most projects cover more than one county and determining how much each county benefits from each project is next to impossible.

Data compiled by the Legislative Coordinating Commission show each of the state’s 87 counties got a piece of the pie, with counties with more people getting more projects.

In northwest Minnesota, Mahnomen County got the fewest projects, 82, while the state’s largest county, Hennepin, led the way with 2,081 projects that used legacy money.

There have been attempts to shift money from urban to rural and vice versa, but the battles have fallen far short of fears. Lawmakers retain final say over how money is spent after committees for each fund make their recommendations.

Some lawmakers, mostly Republicans, question land the state is buying with legacy money, saying it should be left in private hands. Rep. Denny McNamara, R-Hastings, said that while overall legacy funds are “doing so many great things,” there needs to be more discussion about land purchases.

“How are we going to deal with the cost?” he asked about ongoing expenses such as management and fire protection.

McNamara, Landwehr and others said they worry about the costs of creating new programs and suggested more work needs to be done so budgets do not balloon to take care of legacy projects.

Landwehr worries that the public could expect too much from legacy funds. They cannot solve all problems, he said.

In the clean water arena, for instance, Landwehr said that even though it gets nearly a third of all legacy money, all Minnesota water will not be clean when the legacy program ends in 2034. There are just too many problems with the water, he said.

Even with potential problems, interviews with people involved in legacy funding showed most consider the amendment a huge success. Few naysayers could be found.

The biggest success so far may be spending $36 million to protect large blocks of forest in northern Minnesota ($6 million more came from other sources).

Landwehr called it a “stellar example of a project you never would have seen” without the legacy amendment.

Other forest land near Brainerd and in southeast Minnesota also was protected, and legacy money helped leverage federal funds to clean up land along the St. Louis River near Duluth.

Compared to the forest work, the Worthington International Festival is a small-dollar user of legacy funds.

In past years, the festival often has received $5,000 for the annual mid-July festival.

This year, Rod Sankey, a Worthington City Council member, said he liked the International Festival approach because it offers a venue for Worthington’s diverse residents to mix and mingle.

“I think even more people should come down here because it’s a good way to begin understanding other cultures instead of just having negative attitudes about our diversity,” Sankey said.

Like the International Festival, the Clay County Fair has received smaller legacy grants.

In addition to the $10,250 the fair received for the grandstand mural, it got about $15,000 in two years to bring in singers, square dancers, a puppeteer and artist to offer family activities the fair otherwise could not afford.

“With this money, we are able to spend maybe a little bit more just to get some more quality arts and entertainment,” Aakre said.

 Reporter Jane Moore contributed to this story.

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International mask

Projects, spending per fund

Arts and Cultural Heritage Fund, 7,345; $317 million

Clean Water Fund, 1,233; $533.9 million

Outdoor Heritage Fund, 141; $533.4 million

Parks and Trails Fund, 238; $228.9 million

Subject of projects

Agriculture-forestry-mining, 72

Archeology, 3

Arts, 6,261

Arts access, 5,113

Biological diversity, 121

Cultural heritage preservation, 1,409

Education outreach, 2,269

Historic preservation, 270

History, 733

Natural areas and habitat, 284

Legacy spending by county

Statewide, 414

Aitkin, 176

Anoka, 467

Becker, 214

Beltrami, 313

Benton, 205

Big Stone, 124

Blue Earth, 446

Brown, 252

Carlton, 180

Carver, 350

Cass, 254

Chippewa, 132

Chisago, 249

Clay, 193

Clearwater, 146

Cook, 218

Cottonwood, 131

Crow Wing, 270

Dakota, 609

Dodge, 167

Douglas, 159

Faribault, 181

Fillmore, 263

Freeborn, 172

Goodhue, 325

Grant, 104

Hennepin, 2,082

Houston, 165

Hubbard, 184

Isanti, 208

Itasca, 260

Jackson, 118

Kanabec, 114

Kandiyohi, 236

Kittson, 95

Koochiching, 126

Lac qui Parle, 123

Lake, 199

Lake of the Woods, 108

Le Sueur, 265

Lincoln, 111

Lyon, 151

Mahnomen, 82

Marshall, 123

Martin, 148

McLeod, 203

Meeker, 188

Mille Lacs, 144

Morrison, 253

Mower, 209

Murray, 87

Nicollet, 297

Nobles, 116

Norman, 88

Olmsted, 436

Otter Tail, 294

Pennington, 119

Pine, 166

Pipestone, 95

Polk, 192

Pope, 140

Ramsey, 1332

Red Lake, 82

Redwood, 138

Renville, 158

Rice, 364

Rock, 86

Roseau, 155

Scott, 325

Sherburne, 283

Sibley, 190

St. Louis, 809

Stearns, 544

Steele, 197

Stevens, 125

Swift, 109

Todd, 215

Traverse, 67

Wabasha, 186

Wadena, 169

Waseca, 169

Washington, 472

Watonwan, 135

Wilkin, 95

Winona, 279

Wright, 340

Yellow Medicine, 119

 Source: www.legacy.leg.mn

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Minnesotans advise North Dakota

Minnesotans entering their sixth year of a fund that pays for a variety of outdoor projects have some advice for their North Dakota neighbors who this fall may decide to implement a similar fund: Work out spending details early.

One of the few major problems encountered in launching the Minnesota legacy fund, with money coming from a sales tax increase, was vague language about how parks and trails money may be spent. That issue only arose following a mostly harmonious campaign to get the constitutional amendment passed.

“One of the lessons that was learned in Minnesota is if you don’t identify and advance the process on allocating funds, you will have a lot of agreement before the ballot (vote), but a bloodbath after the ballot,” Minnesota Natural Resources Commissioner Tom Landwehr said.

While the constitutional amendment Minnesota voters approved in 2008 specifically divided the new tax money among four funds — outdoor heritage, clean water, parks-trails and arts-culture — it left specifics alone, which became an issue when it came to the $30 million to $40 million parks and trails receive each year.

The feeling before the 2008 vote was “we will play nice in the sandbox,” Landwehr said about parks and trails advocates. “Now it is this annual bloodbath among the metro (Twin Cities) parks, the regional parks and the state.”

The addition of a commission to look after park interests outside the Twin Cities has helped, the commissioner said, since state and Twin Cities parks already had organizations.

A broad-based coalition opposing the North Dakota amendment touches on the issue: “This measure would commit 5 percent of North Dakota’s oil extraction tax — at least $300 million per biennium — to a new massive conservation fund with no clear idea of how the money would be spent.”

The amendment North Dakotans will consider is different from the Minnesota one in several ways.

Most importantly, the Minnesota fund divvies up the new sales tax money four ways: 33 percent to clean water, 33 percent to outdoor heritage, 19.75 percent to arts and cultural heritage projects (something not included in the North Dakota proposal) and 14.25 percent to parks and trails.

The Minnesota Legislature has final say over spending money, but various boards made recommendations, which lawmakers generally follow. In North Dakota, a 13-member citizen board would recommend spending to a commission composed of the governor, attorney general and agriculture commissioner, which would have the final spending decisions.

Minnesota Sen. Tom Saxhaug, D-Grand Rapids, said he knows a bit about the North Dakota issue, which “seems to have a much more organized campaign against it than we did.” The opposition coalition includes members from farm, business, local government and energy organizations.

Saxhaug, Landwehr and others suggested that one thing North Dakotans should consider is how to fund ongoing operating costs after the state buys more land and starts programs with the new money. Such costs usually fall into the regular state budget, which may not be able to take on the added costs.

But President Mark Johnson of the Minnesota Deer Hunters Association had just one bit of advice: “North Dakota, jump on it.”

Johnson said that despite what many people think, “if they wait 20 years, the money is not going to be there. … If they want to keep their standard of living, from a natural resources standpoint, now is when they need to be doing it.”

‘Legacy’ has different meanings

Minnesota and North Dakota may be neighbors, but they do not always speak the same language.

In Minnesota, “legacy fund” means revenue from an increase in the state sales tax that voters approved in 2008. The money goes to outdoors, clean water, parks, trails, arts and culture programs.

In North Dakota, voters approved a measure in 2009 they know as the “legacy fund” to use revenues from the state oil and gas tax to build up a budget reserve in case it is needed for any reason in the future. The state calls its proposed constitutional change, similar to the Minnesota 2008 one, the Clean Water, Wildlife and Parks Amendment.

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Creek change

Other money joins legacy funds

The “legacy amendment” usually is blended with other money to fund nearly 10,000 projects around Minnesota.

One of the most complex projects fell on the shoulders of Myron Jesme, Red Lake Watershed District director in northwestern Minnesota, to implement. He cobbled nearly $12 million from about a dozen federal, state and local sources to fix problems caused in 1904 when a straight channel was cut to replace six miles of the meandering Grand Marais Creek from near Fisher to the Red River.

Jesme said that about $3 million in legacy money was the key, especially a $2.32 million allotment from the outdoor heritage fund.

“We needed this $2.32 million to put the gas in the car and start driving,” Jesme said. “Once we got that money, the federal government came in.”

Other agencies began joining the project, too. Each has its own reason, but combined they are funding flood reduction, erosion control, water quality improvement and habitat restoration along the creek.

After a multiyear effort, the hope is to have water flowing through the original channel by year’s end, keeping the shorter straight channel for flood relief when that is needed. Putting water through a curvy creek will keep 700 tons of sediment out of the Red River each year.

Restoring the last six miles of the 45-mile-long Grand Marais Creek has many benefits, Jesme said, by returning aquatic and related ecological systems to how they were before the 1904 channel was changed.

Legacy money often provides the seed funds to attract other projects. In that way, it is like the Minnesota Environment and Natural Resources Trust Fund. That fund has nothing to do with the legacy amendment, but it gets a lot of attention on a Web page otherwise devoted to legacy funds and has been around longer than the legacy amendment.

The Legislative Coordinating Commission reports that the fund, which gets revenue from the Minnesota Lottery, attracts nearly as many page visits as its legacy home page. The arts and cultural heritage fund gets about a third of the page visits, slightly more than a page about the clean water fund.

The Legislative-Citizen Commission on Minnesota Resources, which recommends to lawmakers how to spend the lottery money, recently compiled a $45.8 million list of 64 projects for consideration next year.

The list includes items ranging from a University of Minnesota research center aimed at slowing the spread of invasive plants and animals to researching animals including bats, turtles, elk, loons and white pelicans to improve preservation efforts.

Such projects are similar to some of the outdoors-related ones that get legacy money, and the two pots of revenue often are confused.

Here are some examples of projects at least partially funded by legacy money:

– Becker County Historical Society, $334, to add 12 rolls of microfilmed newspapers to broaden public accessibility to primary records.

– Goodhue Soil and Water Conservation District, $105,450, to construct seven grade stabilization structures in Minneola Township to reduce erosion and sedimentation to North Fork of Zumbro River, protect public roads, retain water, create wildlife habitat and increase groundwater recharge.

– Stevens County Water Quality Initiative, $84,000, to establish up to 12 miles of buffers along the Pomme de Terre River and its tributaries and install up to five rain gardens within the cities of Morris and Chokio.

– Clay County Fair, $10,250, to create a mural on the back of the grandstand that embodies the activities and spirit of the Clay County Fair.

– Friends of Lake Bronson State Park (Kittson County), $5,050, for the Woodcarvers’ Festival.

– Crow Wing Soil and Water Conservation District, $329,750, to improve the water quality of Little Buffalo Creek, a tributary to the Mississippi River.

– City of Kandiyohi, $6,114, to install new doors and windows to the well house, purchase and install six wellhead protection signs.

– Farmington Elementary School, $13,603, for all students at Farmington Elementary to work with artists using the European and American folk song and dance, Ghanaian drumming, West African dance and puppetry.

– Beltrami County Historical Society, $6,896, for Doctor, Doctor, Give Me the News: Early Healthcare, an exhibit on early county health care drawn from primary records in local and state repositories.

– Minnesota Public Television Association, $6.2 million, for production and to buy programs.

– Minnesota Discovery Center (St. Louis County), $4,829, to create an exhibit on the history of the Iron Range as told through personal narrative of 10 residents.

– Nobles Soil and Water Conservation District, $22,346, to test waters needing data for impairment listing in the Rock River and Little Sioux watersheds.

– University of Minnesota, $4.4 million, to establish an aquatic invasive species research center to fight species such as Asian carp and zebra mussels.

– Park Rapids, $8,058, to test wells water and aquifer.

– Boys and Girls Club of Morrison County, $4,500, to invite a resident artist and arts educator, Jodi Legeros, to conduct fine arts programs at the Little Falls club location.

– Carlos Township in Douglas County, $28,000, to evaluate alternatives to fix failing sewage treatment systems.

– Wadena-Deer Creek School District, $11,836, to create works of art and learn creative problem solving strategies.

– Cottage Grove, $6,500, for spill response plan and well survey.

– Woodbury, $10,000, for well site study, ordinance review and public education.

– Dakota County Historical Society, $6,183, for 20 interviews about the history of the Hastings State Hospital, 1938-78.

– Carlton County Soil and Water Conservation District, $130,055, to develop the watershed restoration and protection, while also enlarging and sustaining public participation.

Capitol notebook: Minnesota budget reserve up

By Don Davis

Minnesota officials bumped up the state budget reserve $150 million Tuesday, the first increase in 13 years.

Legislation that took effect Tuesday altered the $39 billion, two-year state budget lawmakers and Gov. Mark Dayton adopted a year ago. The reserve increase included in this year’s budget tweak leaves the budget cushion at $811 million, the biggest in state history.

“This action is a substantial step towards additional budget stability and prudent financial management for the state,” Commissioner Jim Schowalter of Minnesota Management and Budget said.  “Increasing the budget reserve helps the state manage economic risk and is viewed positively by the state’s bond rating agencies.”

Dayton said the reserve increase shows that “Minnesota has finally turned the corner on a decade of deficits that shortchanged our students and stymied needed progress for our state.”

Abortions down in Minnesota

The number of abortions dropped in Minnesota in 2013 for the seventh straight year.

The 9,903 abortions is the lowest number since 1974 and a 7.5 percent decrease from the previous year.

Tuesday’s Minnesota Health Department report confirms the success of laws that provide abortion information and alternatives, the Minnesota Citizens Concerned for Life anti-abortion group said.

Still, MCCL Executive Director Scott Fischbach said, the abortion rate could have been lower.

“As governor, Mark Dayton has vetoed seven protective measures, at least four of which would have protected women and further reduced the number of abortions last year,” Fischbach said. “Dayton’s defense of the abortion industry has been at the expense of unborn babies and their mothers, who are nonetheless rejecting the self-destruction, dehumanization and death that result from abortion.”

Minnesota health spending slows

Minnesota health-care spending increased by 4 percent from 2011 to 2012, a slower rate than in the past.

The state Health Department reported Tuesday that the most recent numbers show a nearly $40 billion increase in public and private health-care spending.

Minnesota spending growth was about the same as the national rate. But the state’s per-person spending of $7,403 was lower than the national figure.

“By historic standards, Minnesota saw low growth in health care spending in 2012,” Health Commissioner Dr. Ed Ehlinger said. “However, projections of future spending highlight that we must continue to focus on disease prevention and creating healthy communities if we are going ensure sustainability of health care costs over the long term.”

Ehlinger’s department credited several factors for the slower increase, including a waning recession, shifting costs to consumers, slower development of new medical technologies and legal requirements that insurers spend a certain percentage of premiums on health care services.

Pipelines allow Legislature to flow to end

Minnesota Senate

By Don Davis

Pipe dreams expressed early in the 2014 Minnesota legislative session gave way to pipelines as it neared an end Friday night.

The House adjourned for the year at 8:59 p.m. Friday, with the Senate following at 10:13 p.m. after two pipeline issues were settled in the final day. Oil-carrying pipelines, mostly in northern Minnesota, and southwest Minnesota’s water pipeline project received funding after talks among legislative leaders and Gov. Mark Dayton produced results that allowed for a smooth session close.

House Speaker Paul Thissen, D-Minneapolis, declared the 2014 session that began Feb. 25 and the 2013 session legislative successes.

“I think we had a productive two years, this year building on the work of last year,” Thissen said.

He pointed out measures lawmakers passed throughout the session such as raising the minimum wage, a measure to prevent school bullying and approving two tax-cut bills.

Republicans could not leave the Capitol quickly enough.

“Minnesota state government has not served Minnesotans well,” House Minority Leader Kurt Daudt, R-Crown, said, noting that Democrats control the House, Senate and governor’s office.

“As a result of this (two-year) session, we have one of the highest tax increases in state history,” Daudt said. “We have the highest budget increase in state history.”

While leaders of the two parties disagreed on the outcome of the 88th Minnesota legislative session, there was relatively little partisan debate Friday as work wound down.

Lawmakers Friday approved more than $1 billion in public works projects, legalized medical marijuana, lowered some taxes and told the state lottery to get out of online scratch-off game sales.

Pipelines took the spotlight in late-session negotiations.

A budget bill that wrapped up early Friday includes $3.75 million to increase training and buy equipment for first responders such as fire departments to deal with potential oil spills from pipelines. The money would come from assessments placed on pipeline companies.

The bill already contained more than $8 million for training and equipment where oil-carrying trains travel. The rail provision also would add two or three railroad inspectors to the one the state already employs.

About 900,000 Minnesotans live near oil pipelines, and many more live near railroad tracks where oil trains travel. Most oil trains go through Moorhead, St. Cloud and the Twin Cities, but trains do travel other parts of the state.

House Transportation Finance Chairman Frank Hornstein, D-Minneapolis, said a key part of the bill requires the state Public Safety Department to study oil transportation safety — including trains, pipelines, trucks and boats — and provide information next year to legislators about what else needs to be done.

The House wanted the pipeline safety provision, but the Senate included no funding. Budget negotiators opted to include pipeline safety after Dayton piped up and demanded it.

The bill containing the oil pipeline safety items was an overall budget bill that increases spending $262 million in a $39 billion, two-year budget. Among its other provisions:

– Home and community-based health care workers and rural nursing homes all will get more state funding.

– Public education will receive $54 million more, including funds to increase early-childhood learning for more than 1,000 youths.

– Broadband high-speed Internet expansion efforts will get a $20 million boost.

– More than $31 million will be spent on a road program known as Corridors of Commerce.

– Another $10 million will be spent to fix potholes.

Dayton told lawmakers that he wanted money for the Lewis and Clark water system to serve southwestern Minnesota. Legislators obliged by approving $22 million from the state budget reserve to build the pipeline from the South Dakota line to Luverne and giving local governments authority to borrow $45 million to extend the system through several counties, with the state paying two-thirds of the loan costs.

“It is very important to the governor, first of all,” Thissen said of Lewis and Clark. “He gets a lot of credit for this making its way through.”

Thissen said the Lewis and Clark funding deal opened the door for adjournment.

“The main thing that happened in the last 24 to 36 hours is we put our heads together and figured out a better way to fund Lewis and Clark …” Thissen said. “It broke everything loose and everything fell into place.”

Also as the session neared its end, lawmakers voted to restrict online sales of state lottery games. While lotto-type tickets would remain available, the online version of scratch-off games the lottery introduced in February would disappear if the governor opts to sign the bill into law.

Conferees wrap up $283 million supplemental budget

By Charley Shaw, Session Daily

The House and Senate early this morning wrapped up negotiations on the supplemental budget bill.

Led by Rep. Lyndon Carlson Sr., D-Crystal, and Sen. Richard Cohen, D-St. Paul, negotiators decided to distribute $283 million in budget surplus money for programs ranging from higher education to corrections.

The conference report was adopted at 2 a.m.

An education funding agreement advanced by the committee would boost spending $54 million in the current biennium.

The deal features a compromise that would increase the per-pupil funding formula by $25. The formula increase, which would be permanent, would cost $23.4 million in 2015.

The House initially budgeted a $54 million formula increase while the Senate’s position heading into conference didn’t include an increase.

Rep. Paul Marquart, D-Dilworth, said increased funding will provide school districts with the “flexibility they need to get to the world’s best workforce.”

When the committee turned to agriculture and environment, a couple of differences between the House and Senate were unresolved and, as a result, $1.95 million of its $12 million target was still up for grabs.

Agriculture Commissioner Dave Frederickson testified that he had three concerns about the bill. Lacking, he said, was $350,000 in the department’s base for retail food handler inspections in St. Paul, $310,000 for the Board of Animal Health for a new inspection program for dog and cat breeders and $200,000 for research into porcine epidemic diarrhea virus.

The committee recessed and lawmakers haggled over their differences well into the night before reconvening. The committee later in the evening adopted the administration’s three requests.

A controversy then ensued over the Toxic Free Kids Act, which would require companies to report to the state if they sell products that contain certain toxic chemicals as determined by the Department of Health. Rep. Jean Wagenius, D-Minneapolis, spoke in favor of the proposal, stating the state “can’t give children the best education we can if we don’t protect their developing brains.”

Cohen noted the proposal would have a “domino effect” in the larger end-of-session negotiations to the point that House Republicans wouldn’t support the bonding bill on the House Floor if it advanced. No motion was made to add the Toxic Free Kids Act to the bill.

 

Shaw writes for the nonpartisan Session Daily (www.house.leg.state.mn.us/sessiondaily) in the Minnesota House Public Information Office.

Minnesota Legislature’s end is near

By Don Davis

The Minnesota House takes up medical marijuana today in what could be a debate lasting well into the night while pieces fall into place on tax and spending bills as the Minnesota Legislature nears the end of its 2014 session.

Debate on the much-discussed proposal to allow children with seizures and adults with extreme pain to use marijuana extracts is expected to begin in the early afternoon, and could last hours. Senators overwhelmingly approved a more liberal bill earlier in the week, but it may go too far for Gov. Mark Dayton to sign it into law.

On Thursday, Dayton would not commit to backing a more restrictive marijuana bill by Rep. Carly Melin, D-Hibbing, that only allows one medical marijuana manufacturer, instead of 55 in the Senate-passed bill. Allowing 55 centers around the state “seems to be quite unworkable,” said Dayton, who has required medical and law enforcement support before signing off on any marijuana plan.

The Democratic governor said that Health Department staffers have been working the last several days to make sure any medical marijuana bill that passes is workable.

“Legislators’ hearts are in a good place,” he said. “They want to do something, but it has to be functional.”

If the House passes Melin’s bill today, House and Senate negotiators will take up the complex task of merging the two different bills into a compromise proposal. And it must be done in just a few days.

The state Constitution requires the Legislature to adjourn no later than May 19. While some legislative leaders had predicted a pre-Easter adjournment, the final day now looks to be no earlier than mid-week next week.

“The sooner we are done the better,” Rep. Pat Garofalo, R-Farmington, said. “I would really like to get done this week. … No one is safe until the Legislature adjourns.”

Formal and informal negotiations continue on several unresolved issues. Prime among them are how to spend a budget increase and what public works projects get state money.

Legislative leaders sent four key lawmakers into a room Thursday to negotiate a public works bill, to be funded by the state selling bonds. The hope is that the four can work out the bonding bill so it is acceptable to the House and Senate, thus avoiding after-the-fact negotiations.

“It’s good to see cooperation and coordination, even beforehand,” Sen. Kent Eken, D-Twin Valley, said.

House Speaker Paul Thissen, D-Minneapolis, said leaders did not give orders to the four bonding negotiators about specifics that must be included in the bill. However, House Minority Leader Kurt Daudt, R-Crown, said there is an understanding that all four legislative leaders expect funding for the hot-button bonding issue: southwestern Minnesota’s Lewis and Clark water project.

The project, to bring water in from South Dakota, has produced by far the most bonding discussion.

Daudt said he hopes Lewis and Clark can get the $20 million needed to bring water to Luverne and a like about to fund the next phase. However, money may not be approved for the third phase, to extend the pipeline to Worthington, the minority leader said.

Rep. Rod Hamilton, R-Mountain Lake, said he is pushing for the entire $69 million Lewis and Clark funding.

While debate continues on how to spend money, a tax bill has been negotiated. It features an average $200 property tax break for farmers, as well as cuts for renters and homeowners.

Minnesota revenue falls

Revenues flowing into Minnesota state coffers slowed in February.

While individual income tax revenues exceeded earlier expectations, other revenues fell from what was predicted in February.

Minnesota Management and Budget reports that some of the change comes from lower taxes paid on tobacco product sales. Various other smaller revenue sources also fell.

Overall, total February revenues were $2.6 billion, down $67 million from expectations. Income taxes were up $28 million.

Sales taxes were $4 million below predictions, which state officials said may due to lower spending during a harsh winter.

State officials warn not to draw long-term conclusions from monthly revenue reports.

House budget bill leans toward greater Minnesota

Anzelc lobbies Fabian

By Don Davis

Much of the money in the Minnesota House’s plan to tweak the state’s two-year budget would go to greater Minnesota.

“We focused on rural Minnesota and greater Minnesota,” House Majority Leader Erin Murphy, D-St. Paul, said, because many rural parts of the state have not recovered from the recession as well as the Twin Cities.

The House passed the bill 70-59 late Thursday to add $322 million to the $39 billion, two-year state budget enacted last year.

House Minority Leader Kurt Daudt, R-Crown, said the budget plan is one “Democrats are pushing like drugs on the House floor. They can’t spend enough.”

Provisions aimed at areas outside the Twin Cities include those giving a 5 percent increase to home health care providers, pumping more into rural nursing homes that pay employees $14 an hour or less, adding money to elderly meal programs that mostly serve rural Minnesotans, setting up grants to develop high-speed Internet connections, putting $6 million more into greater Minnesota economic development efforts, increasing spending more for highway repairs and creating a center to fight invasive plants and animals moving into the state.

When they were briefing the media on the budget bill, Democratic House Speaker Paul Thissen of Minneapolis and Murphy Paul frequently pointed out items that would help rural or greater Minnesota.

For instance, they said, in approving $25 million for broadband Internet improvements, a fraction of what supporters wanted, businesses in areas of slow Internet coverage could become competitive with places that enjoy faster service.

“Expanded access to broadband Internet access is critical for greater Minnesota,” said Rep. Erik Simonson, D-Duluth. “If we want businesses to set up shop and expand in our communities, we need to provide them the resources they need in order to be successful. But in many areas of the state, high-speed Internet access just isn’t an option.”

Murphy denied that the rural emphasis is an attempt to improve Democratic chances in this year’s elections. At least seven rural House districts now held by Democrats are considered to be in play this year.

Overall, the bill divides the $322 million it spends several ways:

– $92 million for education, including raising public school funding $58 per pupil, adding money to school lunch programs and reducing special education paperwork.

– $91 million to health needs, including increasing funds 5 percent for care providers who serve patients at home, raising rural nursing home payments and assisting mostly rural elderly meal programs.

– $37 million for economic development, including the broadband grants and $6 million for six greater Minnesota economic development programs.

– $50 million for transportation, half of which would go to fill potholes after a winter that has been tough on roads.

– $36 million for public safety, especially sending more to the Corrections Department.

– $16 million for agriculture and the environment to fight invasive species moving into Minnesota and help fund locally grown food for food shelves.

The Senate Finance Committee plans to finish its budget proposal today. It could come up for debate early next week.

Added money for home health care providers follows last year’s 5 percent increase in nursing home funding.

Rep. Tom Huntley, D-Duluth, said funds for rural nursing homes need to increase because the expected passage of a $9.50-an-hour minimum wage would affect them since many workers do not receive the minimum wage.

Some new money the Corrections Department would receive is to pay county jails to house up to 500 prisoners. Rep. Michael Paymar, D-St. Paul, said the department underestimated the number of prisoners it would house this year.

As a snowstorm headed toward St. Paul, Rep. Frank Hornstein, D-Minneapolis, said his transportation funding provisions include $15 million to help local governments fill potholes after a rough winter, with another $10 million destined for the state to do the same.

Hornstein’s bill also provides $10 million for the Corridors of Commerce highway repair program that mostly would go to greater Minnesota roads.

Also in the bill is a provision to increase an assessment on railroads and add one on pipelines to fund $2.5 million worth of more training that first responders such as firefighters need to battle crude oil accidents.

The House voted to ban state funds for abortions and to prohibit an abortion of a fetus more than 20 weeks old. Most of the nearly 100 amendment proposals were rejected.

Republicans repeatedly tried to pass amendments to change the MNsure health insurance exchange, but Democrats would not allow most to be debated.

Dayton would limit surplus spending to $162 million

By Don Davis

A $1.2 billion budget surplus does not mean massive new state spending.

Gov. Mark Dayton made that clear Thursday when he unveiled his plan for election-year budget changes: About half of the projected surplus would go to tax cuts, $162 million would be spent on what he called “essential” needs and the rest would go into the state budget reserve.

Lawmakers and Dayton last year approved a $39 billion, two-year budget and Thursday’s announcement centered on how the governor would deal with the $1.2 billion surplus announced Friday. Legislators will draw up their own budget proposals and negotiate with the governor before the legislative session ends by May 19.

New spending Dayton suggests includes a boost for those who care for the elderly and disabled, and $20 million legislators already approved to increase heating aid, especially for those who cannot afford propane after big price spikes earlier this year. He also wants to add $3.5 million to the school lunch program to help students that cannot afford to buy meals.

The Democratic governor remains confined to home after hip surgery and released his budget tweaks in a conference call with reporters.

He said he wants to cap spending increases at $162 million so the state can put $455 million more in the budget reserve in case the economy goes sour. That would leave the reserve at $1.1 billion.

After his announcement, Dayton took hits from both sides: some criticized him for not recommending spending on their pet projects while Republicans were not happy with his suggestion to increase spending at all.

“Gov. Dayton is squandering the opportunity for real reform, using the surplus to adjust his 2013 tax increase and adding millions more in spending, even after his budget spent 10 percent more than the last two years,” Senate Minority Leader David Hann, R-Eden Prairie, said.

Dayton’s biggest spending increase request is $64.3 million for people who serve the elderly and disabled.

There is widespread support for increasing worker pay, but soon after Dayton released his budget plan a key organization supporting the added pay was critical.

The Long-Term Care Imperative issued statement saying the Dayton plan “takes a good first step toward restoring the funding of long term care for older adults,” but said the governor did not go far enough.

Dayton said he knows not everyone got what they wanted.

“Most of the agencies have had to restrain, if not cut, their operating expenses,” Dayton said.

An example is the Department of Natural Resources. A February story in the West Central Tribune of Willmar reported the department has a $1.5 million shortfall in its parks account, forcing some jobs to remain empty.

Dayton said the DNR did not seek more parks money, and said that state agencies need to watch their spending.

“There are a lot of needs out there that I am not addressing,” Dayton said. “There are people who are going to be unhappy with that.”

A rural issue that Dayton lists as a priority also did not get extra money: statewide high-speed Internet.

“I wanted to see border-to-border cell phone and high-speed Internet coverage by the end of my first term,” Dayton said. “We are going to fall short of that, but that still is my goal.”

The governor said he did not put broadband funds in his Thursday budget plan because those who want to increase coverage and speed have asked for up to $100 million, but have not spelled out specific details about how the money would be used.

Glencoe Mayor Randy Wilson, president of the Coalition of Greater Minnesota Cities, was not happy that Dayton left out broadband.

“Given the importance of the issue and years of talk, it is perplexing that Gov. Dayton failed to dedicate a portion of the surplus to enhance broadband speed and accessibility across Minnesota,” Wilson said.

Wilson also criticized Dayton for not recommending that the state increase aid it pays to cities.

Dayton proposed increasing Minnesota State Colleges and Universities system spending $17 million so it will not be forced to lay off faculty.

He also wants to up the University of Minnesota budget $5 million. While he and the Legislature cannot tell the university specifically how to spend the money, he said that he wants the money to go to the University of Minnesota Duluth.

“It is my intention of providing an additional $5 million … so they will not have to lay off faculty there,” Dayton said.

Also getting more money under Dayton’s plan would be the Minnesota Sex Offender Program, which is under a federal court order to fund an expert review of its services. A federal judge could take over the program if the state does not change it from a program that looks more like a prison to something that treats offenders.

Dayton wants more than $30 million new money for the Corrections Department to keep staff as prison populations grow.

Lawmakers divided on priorities for $1.2 billion state budget surplus

Kalambokidis

By Don Davis

Good economic news looks like it will lead to a few Democratic squabbles over how to spend a budget surplus, with Minnesotans wondering if they will see taxes fall or state spending increase.

“I’m happy to be here to deliver this budget forecast, not the weather forecast,” Commissioner Jim Schowalter of Minnesota Management and Budget said Friday, as snow began to fall in St. Paul.

He announced that the state has a $1.2 billion budget surplus, up $408 million in the past three months.

The news means state leaders must decide what to do with the money: give it back to Minnesotans via tax cuts, increase spending or boost the budget reserve. They likely will do a bit of all three, but Democrats who control the House, Senate and governor’s office do not fully agree on the split.

House Speaker Paul Thissen, D-Minneapolis, and Gov. Mark Dayton put priorities on a $500 million tax cut and spending cash on some public works projects that the state usually borrows money to fund.

Senate Majority Leader Tom Bakk, D-Cook, said it may be too late for some of the House’s $500 million tax-cut bill to help people filing this year. He doubted that software could be upgraded in time to include any state tax changes before April 15.

Bakk and Assistant Majority Leader Katie Sieben, D-Cottage Grove, did not reject tax cuts and higher spending, but indicated their priority is putting more money into the reserve.

The debate over how to use surplus money has not been common in recent years. The $1.2 billion surplus is the biggest projected since February 1999. Since then, the twice-a-year budget forecasts often have shown deficits.

The report shows revenues up $366 million above earlier projections in the budget that ends June 30, 2015. Individual income tax led the way with a $188 million increase, followed by sales taxes up $167 million.

A 0.1 percent spending decrease and lower-than-expected interest rates on bonds sold to finance a new Vikings stadium also helped the financial picture.

Schowalter and State Economist Laura Kalambokidis warned that good times are not guaranteed. For one thing, harsh winter weather could have a more long-lasting impact than predicted.

While many legislative Democrats credit the surplus to a $2.3 billion tax increase and spending changes they passed last year, fellow Democrat Dayton did not. Republicans took credit because of budgets they wrote or heavily influenced in recent years, saying the economy could not turn around in eight months since Democrats’ budget started.

Schowalter and Kalambokidis said there is no evidence that the 2013 tax increase affected the economy.

Kalambokidis said the harsh winter weather influenced the 2014 economy to begin on the soft side, but predicted that it will pick up.

All aspects of the state economy are improving, she said, other than federal government employment and manufacturing.

Dayton singled out figures in the report that showed Minnesota employers added 3,500 jobs a month in 2012 and 3,800 last year.

Schowalter, who favors a bigger budget reserve because it provides a “shock absorber” for the state budget, said the state has about 2.3 percent of its budget set aside now, but financial agencies prefer to see 4.9 percent. He is expected to recommend that to Dayton, who hinted he is unlikely to recommend that big of a reserve.

The governor plans to release his proposal for budget and tax changes next week, a document legislative leaders will use to craft their own proposals.

The Legislature and Dayton approved a $39 billion, two-year budget last year and only need to make minor changes this year.

There is widespread legislative support to spend some of the surplus on nursing homes and other long-term care programs, with a goal of increasing worker pay.

A group pushing for more elderly and disability aid said the forecast bolsters their chances. The 5 Percent Campaign is seeking $80 million to help 92,500 Minnesotans.

“A rate increase for home and community-based services is the major issue that wasn’t addressed in 2013,” bill sponsor Sen. Kent Eken, D-Twin Valley, said Friday. “Today’s forecast tells us we have the resources to address this priority in 2014.”

Other than long-term care spending, Senate Minority Leader David Hann, R-Eden Prairie, said: “We think we need to give it back.”

Budget surplus up to $1.2 billion

By Don Davis

Minnesota’s state budget surplus is growing.

A report released this morning shows the state has a $1.2 billion surplus, $408 million more than predicted in early December. Minnesota Management and Budget reports that revenues are up $366 million from December projections and spending is falling slightly.

A $2.6 billion surplus is predicted for 2016-2017.

The report opens the door to increased spending requests, deeper tax cuts and, perhaps, adding more to the state budget reserve during the legislative session that began Tuesday.

Details of the budget forecast, including predictions about the state’s economy, were to be released later today.

A similar December budget and economy report, known as a budget forecast, showed the state with about a $1 billion surplus, which shrunk to $825 million after the state repaid schools money it had borrowed from them in recent years.

The forecast is important because it shows Gov. Mark Dayton and legislators how much money they have available this year.

In the third day of the legislative session, Thursday, the House Taxes Committee approved a bill sending $500 million back to businesses and middle-class Minnesotans, eating up a good portion of the surplus they thought they had at the time.

Before the forecast was released, Senate Majority Leader Tom Bakk, D-Cook, said he would wait to make decisions about spending, taxing and whether to add to the state’s budget reserve until after the forecast. Bakk said he remembers the days during Gov. Jesse Ventura’s administration when the state sent rebate checks to the public, with the state soon running into economic problems and running low on money.

Senators are not up for election this year, but all House districts are elected every two years and leaders of that chamber are eager to show their willingness to cut taxes this year after last year raising them more than $2 billion.

The Legislature and Dayton approved a $38 billion, two-year budget last year and only need to make minor changes this year.

Dayton planned to wait until after the forecast to announce plans to tweak the existing budget.

The governor and legislative leaders warn groups against asking for money this year, saying that even with a surplus the state cannot afford expanding the budget. However, groups ranging from those supporting expanding high-speed Internet service to those behind better long-term care are asking for money. Most groups say that funds could come from the surplus.

House Speaker Paul Thissen, D-Minneapolis, said before the forecast that he cannot support proposed transportation tax increases made by fellow Democrats. However, he added, funds could come from surplus money.

Bakk floated a plan to use surplus funds to increase spending on public works projects. He said, for instance, that the $100 million-plus needed to finish the state Capitol renovation project could come from cash, opening the regular public works funding bill for more projects.

Notebook: Tax revenues mixed

By Don Davis

Minnesota sales and personal income tax receipts were up in the first three months of the state fiscal year as state revenues came in just short of projections.

Minnesota Management and Budget on Thursday reported that overall state tax collections were down $2 million, less than 0.1 percent, compared to expectations.

Cigarette and other tobacco taxes fell $29 million below projections, about 21 percent short. Corporate income taxes were down $342 million, an 11 percent fall.

Nearly making up for those losses were a $46 million sales tax gain (4.2 percent higher) and $27 million more in individual income taxes (1.3 percent up)

The state collected more than $4 billion in the three-month period. Tax increases the Legislature and Gov. Mark Dayton approved earlier this year were to bring in $240 million during that quarter, but total revenue was $336 million more than a year ago.

No gun sales?

A Minnesota lawmaker questions a provision in contracts for a new stadium that he says appears to ban many businesses from selling guns there.

The chairwoman of the authority that runs the stadium said that Rep. Pat Garofalo, R-Farmington, misread the document.

“We certainly never intentionally prohibited gun sales” in the documents signed last week, Chairman Michele Kelm-Helgen of the Minnesota Sports Facilities Authority said in an interview.

However, the document Kelm-Helgen and other authority board members signed a week ago says that it prohibits the stadium from being used by “any gun shop or other store whose primary business is the sale of guns or other weapons.” It also bans “adults-only use,” such as movies and other adult entertainment, as well as pawn shops or head shops.

Kelm-Helgen said the authority’s intention was to not allow the Minnesota Vikings football team to sell guns in its team store in the stadium.

In a letter to the authority, Garofalo said exhibitors at outdoor trade shows and the like should be allowed to sell weapons as long as they comply with laws and stadium policies.

“The people’s stadium should not, under any circumstances, arbitrarily prohibit these types of events…” the lawmaker wrote.

Kelm-Helgen said the authority so far has dealt only with rules dealing with the Vikings. “We haven’t really addressed whether we can have a gun show there.”

Invasive training required

More Minnesota businesses now are required to take training dealing with aquatic invasive species.

The Department of Natural Resources offers the training to lake service provider businesses this fall so they can legally work in the state’s waters. Those firms include ones that rent or decontaminate boats and other water equipment.

A law that began in July requires the three-hour training.

“Before this change, the law applied only to businesses such as marinas, dock haulers, boat clubs and others who install or remove equipment from state waters,” the DNR’s April Rust said.