Conservation Minnesota

Watching for Potholes: Analysis of Governor Pawlenty’s Proposed Budget

Governor Pawlenty’s proposed reductions and fund shifts for the state’s 2010 and 2011 budgets run afoul of what voters approved at the polls in November 2008, Conservation Minnesota reported today.

To read our analysis of the Governor’s proposals, click here.

In its periodic analysis of the state’s conservation and environmental budget, Conservation Minnesota said the Governor’s proposed use of conservation funds dedicated to specific natural resources clashes with the Clean Water, Land and Legacy Amendment.

“Voters said yes to new natural resource funding without raiding existing funds,” Executive Director Paul Austin said.  “Now the governor is saying no to their intent.”

Key findings of the report:

The Governor’s proposed budget solution raids the Natural Resources Fund and the Environmental Fund, among others.  The proposal uses them to fill the state’s budget hole instead of the purposes for which they were intended.  This is the kind of erosion of existing funds prohibited by the language of the Clean Water, Land and Legacy constitutional amendment.

The governor’s raids on statutorily dedicated funds have a disproportionate impact on conservation agencies because those agencies rely more heavily on dedicated funds.  Statewide, the Governor proposes a total of $125.4 million in transfers to the general fund from statutorily dedicated funds. Of this amount, $9.56 million, or 7.6% is from the primary conservation agency budgets, despite the fact that these agencies represent only 1% of the state general fund budget and 2.5% of total state spending.

Conservation Minnesota also uncovered some relatively good news:

Although the Governor proposes general fund cuts to conservation and environment, it appears the cuts were roughly proportional to the overall reduction in general fund spending.  In FY 2008-09, when voters approved the Legacy Amendment, conservation spending  represented 1.1% ($346.2 million) of total state general fund spending of $33.86 billion.  Under the Governor’s supplemental budget, funding for conservation agencies slips to $312.5 million of a general fund budget of $30.21 billion, just over 1%.

There are clouds on the horizon, however. The general fund cuts proposed by the governor are deep and will grow in the next biennium.   If the Governor’s budget were enacted as proposed, the share of state general fund allocated to conservation and environment would dip to 0.86% – significantly less than the level when the Legacy Amendment was passed.

Both the Governor and Legislature Initially Continued Traditional Levels of Bonding for Conservation, But Significant Conservation Investments Were Vetoed by the Governor.  Bonding bills are an important traditional source of funding for conservation and the environment, and, historically, 22.2% of bonding projects have been allocated to these purposes. Of a total package of $685 million, the Governor proposed $164 million for conservation, or 23.9%. The House and Senate conference committee recommended a total of $999.9 million in bonding, with  25.3% for conservation.

Unfortunately, on Monday, March 15, Governor Pawlenty vetoed $75 million in transit and conservation projects from a bonding bill passed by the Legislature, including:

* $43.5 million in the transit capital improvement program, which would have expanded transit in the Twin Cities, and $2.5 million for transit in Greater Minnesota.

* $25 million for Reinvest in Minnesota (RIM) Conservation Reserve, which pays farmers for permanent conservation easements on marginal farm land often found near lakes, rivers or which contain wetlands. The veto will cost Minnesota more than $35 million in federal matching dollars.

* $4.5 million to purchase scientific and natural areas that include plants, wildlife and scenery of statewide importance.

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