Lake Bemidji in Fall. Image: Lightinacube
In addition to this year’s momentous election, Minnesota voters will be asked on November 5 whether to renew the constitutional amendment that created the Environment and Natural Resources Trust Fund in 1988.
Perhaps without knowing it, we have all enjoyed the benefits of this historic commitment. Often called the Lottery Fund, it uses 40 percent of lottery proceeds to protect our natural resources. It is probably less well-known than the later 2008 Legacy Amendment, but it invests about $80 million per year in projects such as repairing state trails and bridges, improving control of invasive carp, basic and applied research on environmental questions, and opportunities for outdoor recreation.
Advocates hope for a strong vote in favor, as happened when the Fund was established and twice renewed. But observers agree we shouldn’t take the dedication—or its method of allocating money—for granted. And it’s important to note that skipping this box on your ballot counts as a No vote.
A bumpy road
The law creating the fund specifically states the money “may not be used as a substitute for traditional sources of funding environmental and natural resources activities, but the trust fund shall supplement the traditional sources.”
At times some legislators have had trouble adhering to this part of the law. In the early years, the fund was administered by the Legislative Commission on Natural Resources (LCMR). After public complaints about too much political influence (think “pork”), Gov. Tim Pawlenty set up a committee in 2004 to recommend changes. Geologist and environmental consultant Jeff Broberg volunteered to serve on the committee. After learning how much work it was to review project proposals, Broberg says he asked then-Speaker of the House Steve Swiggum why legislators wanted to be on the LCMR. According to Broberg, Swiggum responded, “Simple: they each get to pick two projects.”
The reform committee came up with a formula which Broberg and others say has worked well. Seven citizens were added to the review group, now called the Legislative-Citizen Commission on Minnesota Resources (LCCMR). This group establishes a six-year strategic plan and then reviews proposed projects based on priorities in that plan. It submits a bill with recommendations to the legislature, which has the ultimate authority over which projects are funded.
Michael Banker was a key staffer at the LCCMR as it was being created. He helped design the review system. “We prided ourselves on making sure it was rigorous and transparent,” Banker says. “If proposers submitted their proposals early enough, we gave detailed feedback. In the last few months of each review period, we spent a lot of time calling people and asking questions to make sure they explained their project thoroughly. That was a way of creating a more level playing field,” he says.
But the political battles aren’t over. In 2018 lawmakers used $164 million from the Trust Fund to pay for state bonding projects, mostly wastewater treatment plants. Environmental groups objected; the language establishing the Trust Fund was clear, they said: the money can be used “for the public purpose of protection, conservation, preservation, and enhancement of the state’s air, water, land, fish, wildlife, and other natural resources.” And it is not supposed to substitute for regular government work, which includes assistance to cities for wastewater treatment.
Controversy ensued, and the environmental groups prepared a lawsuit, which slowed the bond sales. The following year, the legislature provided general-obligation bonding for wastewater treatment plants and the money was returned to the Trust Fund.
In 2022 the legislature approved several projects that were never reviewed by the LCCMR. Gov. Tim Walz signed the bill but scolded legislators (“I implore the legislature to cease adding unvetted projects to this bill…”).
Trust Fund advocates remain nervous. “I don’t think (legislators) have learned their lesson,” says Lance Ness, past president of the Fish and Wildlife Legislative Alliance and other outdoors groups and a force behind initial passage of the amendment. Ness says legislators are still protective of their prerogative to control state financial resources. “I’ve been in legislators’ offices many times and they point to an election certificate on the wall and say, ‘when you get that, you can spend the money.’ It’s been a challenge to preserve the Trust Fund as intended.”
Language in the current constitutional amendment to renew the fund dedication specifically outlaws the use of ENRTF funds for wastewater infrastructure.
Another original supporter, David Zentner, a former national president of the Izaak Walton League among other roles, points out that the push for the Trust Fund “originated with declining funding for environmental needs at state and national levels beginning in the 80s (think Reagan) and continuing today.” Zentner says the current structure of the LCCMR improves accountability. But he says legislators will continue to be tempted to use dedicated funding to avoid allocating money in the state budget. “Preventing that kind of substitution is going to require eternal vigilance from activists and regular citizens.”
A new dedication
This year’s amendment also increases the annual withdrawal from the ENRTF from 5.5% to 7% and directs the additional 1.5% to a new Community Grant Program. The process of applying for funding from the Trust is lengthy and complex and requires a high level of organization. Historically, most of the money has been allocated to large, well-established organizations; tribes, small nonprofits and BIPOC-led groups have been underrepresented. In 2023, for example, of the $73.3 million total, the DNR received more than $43 million and the University of Minnesota received more than $19 million. The DNR regularly passes some grant money to other groups. Still, the LCCMR and legislators wanted to make the money more widely available.
Minnesota a leader
According to the Trust for Public Land, most states have mechanisms to dedicate money to land conservation. States use income from real estate taxes, sporting goods sales taxes, mineral revenues, and income tax checkoffs. But Minnesota is one of only ten states with dedicated funding embedded in the state constitution, which is considered the most reliable way to protect the money.
Twenty years after the lottery vote, Minnesotans supported another constitutional amendment to increase our sales tax and dedicate most of the new money to the environment. The Clean Water, Land and Legacy Amendment of 2008 increased the state sales tax by three-eighths of one percent until 2034, when we will have an opportunity to pass it again. This program is probably better-known than the Trust Fund is. Here, money is specifically dedicated to projects that protect drinking water, natural habitats and waters, and support parks, trails, and cultural resources.
The Trust Fund from the lottery has a broader mandate with greater flexibility in the types of projects it can fund, and often pays for long-term research projects. Just one example: the LCCMR funded research that found triclosan (a hormone-disrupting chemical that contributes to antibiotic-resistant bacteria) in Minnesota’s waters.
In 2017 Minnesota began regulating triclosan, and the federal government followed suit a few months later.
The Trust Fund also funds basic research such as the state Biological Survey and county geologic atlases. Other recent topics include research on cover crops, bird and pollinator habitats, aquatic and terrestrial invasive species, and chronic wasting disease.
The DNR’s budget for 2024-25 is two billion dollars.The state General Fund pays for $604 million, which is less than 1% of the total General Fund budget. The two c onstitutionally dedicated funds together contribute an astonishing 27% of the DNR’s overall budget.
Longtime environmental activist Jeff Broberg says, “We’ve lost track of how much money it takes to manage the environment.” He also notes that recreation is important. “If we can’t get people outdoors, they won’t respect it enough to fund it.”
Regarding the current work of the LCCMR, Dave Zentner says the board is working well and the staff are highly professional. “It’s tough work; it’s supposed to be,” he says. “We have to honor what our citizens do to support the work by giving the results they deserve. We have to be careful that we’re walking that walk.”
Thanks to the staff of the Minnesota Legislative Reference Library for their assistance in preparing this report.
