Now that Gov. Tim Walz and the 2019 Legislature have begun work, we believe their agenda must include correcting a serious breach of constitutional authority that includes an ill-conceived financial scheme. This 2018 legislation thwarts the will of Minnesota voters and compounds the costs of certain capital improvements over the next two decades.

Our constitution directs 40 percent of state lottery net proceeds to the Environment and Natural Resources Trust Fund. That fund may only be spent as authorized by the legislature for “protection, conservation, preservation and enhancement of the state’s...natural resources.” Minnesota law provides, “The trust fund may not be used as a substitute for traditional sources of funding environmental and natural resources activities....” By law, the Legislative-Citizen Commission on Minnesota Resources must review proposals and make recommendations to the legislature for expenditures from the trust. This process worked well since 1988, when the trust fund and lottery were approved by voters as amendments to the state constitution – until the 2018 session, that is.

The final bill enacted during the contentious 2018 session was the biennial capital investment bill, commonly called the bonding bill. It also included appropriations from the Environment and Natural Resources Trust Fund that had been recommended after LCCMR review. A surprise was revealed late in the afternoon of the last day when a committee unveiled a $98 million raid on the Trust Fund. There was no opportunity for public testimony. It was just tucked into this voluminous bill. Given the crunch of business that last day, quite likely most legislators had no idea this provision even existed.

Foolishly, the irresponsible legislators concocted a scheme using “appropriation” bonds to be paid from the Trust Fund over the next 20 years, rather than using standard general obligation bonds. Apparently, this was an attempt to appear to be spending less by not counting these bond authorizations against self-imposed limits. But, because bondholders have less security, the market requires higher interest rates, and consequently greater debt service costs. Minnesota Management and Budget has estimated the “appropriation” bonds to incur $66 million in interest. This compares to $31 million estimated interest for traditional general obligation bonds.

The $98 million funds many municipal sewer and water projects, which the governor recommended be included among the authorized state general obligation bonds. For decades, the state has authorized similar projects among those traditional bonds in the biennial bonding bill.

For unknown reasons, Gov. Mark Dayton signed this bill into law without a line-item veto of the $98 million Trust Fund raid. Dayton did, however, send a strongly worded message to legislators upon returning the signed bill, saying they “shamefully subverted” the prescribed LCCMR process. Dayton continued, “Even worse, legislators invaded the Trust Fund to pay for another $98 million of projects through issuing Appropriation Bonds. I strongly urge future legislatures to immediately correct this travesty and restore the integrity of this 30-year-old fund for future generations.”

Over three decades, with the overwhelming passage of three separate constitutional amendments relating to the Environment and Natural Resources Trust Fund, Minnesotans have made clear their support. Legislators need to heed that message.

A lawsuit challenging the constitutionality of this Trust Fund raid has been filed, and with this cloud of uncertainty the “appropriation” bonds authorized last May have not been issued. Moreover, they likely will not be issued for months or maybe years, if ever. This is unfortunate for those needing funds for the affected projects.

We wholeheartedly agree with Dayton’s statement urging quick legislative action to fix the problem and not wait for resolution of the litigation. The simplest, quickest solution is to authorize $98 million of general obligation bonds to replace those authorized by the Trust Fund raid. Furthermore, we implore legislators to cease these smoke and mirrors tactics that create suspicion and mistrust with the citizenry.

An opinion of the Adams Publishing – ECM Editorial Board. Reactions welcome. Send to

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