Conservation Minnesota

Calling on Legislature to Preserve Long-term Bonding Investments

“It is extremely desirable to remove as speedily as possible so vexing a question from our State politics, not allowing it to remain for years to disturb our own elections…”

Alexander Ramsey*

1861

Minnesota’s Second Governor Alexander Ramsey took the helm of our state at an absolutely daunting time. He faced rumblings from the East Coast warning of an impending storm that would divide the nation into North and South for a Civil War. Making things worse he also faced a financial crisis at home. The state that was born in a wave of optimism for pioneer growth was mired in a financial crisis. It was this financial crisis that was the vexing question Ramsey referred to in his first inaugural address.

Soon after statehood, Minnesota’s political leaders gambled everything on an ever-expanding Westward expansion. Land speculators ran up debts like drunken sailors with dreams of great riches on the western frontier.  Unfortunately, on August 24, 1857 at the height of this land speculation frenzy, the Ohio Life Insurance and Trust Company failed in the East, which sent a shockwave throughout the nation’s financial institutions, wreaking havoc on the nation’s economy.

Minnesota was hit extremely hard with nearly all of her banks collapsing. Within a year Minnesota’s population almost dropped by half.  In order to stem the slide, the Legislature came up with a scheme of floating a $5 million loan on the state’s credit to enhance the development of railroads with the hope of spurring its economy.  Unfortunately, this scheme was a bust and this debt would vex the state for the next five decades as the state struggled to pay off the obligation without any railroads ever being built.

Even though Minnesota was born with a significant government debt crisis, it did mature into one of the most financially prudent states in the nation in managing its debt.  As Minnesota has struggled through one of the greatest financial downturns since the Great Depression, it only lost one point in its credit rating.  This summer it dropped from the highest AAA rating down to an AA+. This was actually a far better result than most state and local governments. This was not due to its debt management, but rather the inability for the Legislature to create a permanent solution to their ongoing budget.

Nonetheless, this present daunting financial crisis is casting a huge shadow over the coming legislative session.  There is a clear desire to focus on jobs and job creation. This week Gov. Dayton rolled out his jobs proposal that included a capital investments bill of $775 million. This should position the conservation community for some positive gains.

Typically the major bonding bill is only done once every 2 years on the even-numbered year. In the past the Legislature has done some supplemental bonding in the first year of the session, but this year as part of the final deal the governor was able to negotiate a $500 million bonding bill.  Over a quarter of investments in this bill were for conservation efforts.

If the governor were successful in his request of $775 million of bonding, this biennial budget would produce the largest amount of capital investments in any two-year cycle in the state’s history. Unfortunately, indications from the new Senate Majority Leader Dave Senjem are that the Legislature will not want that large of a number. At a recent forum Senjem suggested that he anticipates that the Legislative package will be in the neighborhood of $400 million. That would be more in line with the average capital investments made in a two-year cycle in past sessions.

This year’s capital investments bill is extremely important for the protection of our great outdoors and the ongoing effort to clean up our lakes and rivers.  These dollars have traditionally been used to protect critical lands for conservation, improve our state’s parks and trails and to build wastewater treatment facilities. As part of the Clean Water, Land and Legacy Amendment, these traditional sources of funding should be preserved while the Legacy money goes to supplement these efforts. In other words, the dollars may not be used as a substitute for existing funds to solve short-term state budget problems.  To keep true to the Legacy Amendment, the conservation community is calling on the Legislature to preserve long-term bonding investments for clean water, wildlife habitat, natural areas, outdoor recreation and land conservation at 22.2% of the overall bonding bill. This amount is the 10-year average for these projects.

Next week the governor will propose where he recommends his proposed $775 million be invested. Conservation Minnesota will be assessing whether his proposal honors the desire of the voters when they adopted the Clean Water, Land and Legacy Amendment and continues a funding level at the historic 22.2%.

About John Tuma

John Tuma
John is a former state legislator and litigation attorney. He served in the Minnesota House of Representatives for eight years from the Northfield area, beginning in 1994. Elected as a Republican, John was known for his independent thinking and ability to work across party lines. He is well-known in Minnesota state government circles.
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