Update: Clean Water Fund bills pit key water programs against one another

The Clean Water Fund is designated to protect, enhance, and restore water quality in lakes, rivers, and streams and to protect groundwater from degradation. Both the Minnesota Senate and House have authored spending proposals, but they're very different. (Photo by Tom Reiter)

In recent weeks, committees in the House and Senate have laid out how they think Minnesota should spend its Legacy Amendment funding for clean water programs.

These bills, the House and Senate "Clean Water Fund" bills have major differences between them, with significant implications for programs that impact the health of the Mississippi River, FMR's top legislative priorities.

Unfortunately, what the bills have in common is a call to use these special, voter-created funds for programs normally supported through more routine channels. Now, three broadly-supported programs — The Conservation Reserve Enhancement Program, Forever Green and funding for Soil and Water Conservation Districts — have been essentially pitted against one another during a time of a billion-dollar surplus.

The Clean Water Fund

In 2008, Minnesota voters approved the Clean Water, Land and Legacy Amendment to our state constitution, providing a 3/8th of 1 percent sales tax increase dedicated to water quality, land conservation, parks and trails and the arts. The Clean Water Fund is one of four Legacy-backed funds — and receives 33% of all receipts. 

The state's 28-member Clean Water Council makes recommendations to spend or appropriate the Clean Water Fund, though final allocations must be made by the Legislature and signed by the governor.

For this session, the council originally recommended $262 million in investments, to be trimmed by about $1.44 million[i] after the program's financial forecast was adjusted downward in February.

The Legislature’s response

Both the House and Senate Clean Water Fund bills depart from the council’s recommendation, with significant implications for programs that are important to the health of the Mississippi River.

  • House position (House File 653 - Rep. Lillie)
    The House Clean Water Fund bill (HF 653) alters about 9% ($24 million) of the council recommendations. The headline change is moving “extra” Conservation Reserve Enhancement Program (CREP) money out of year one of the bill (due to federal delays in being able to spend that money right away) and using it to fully fund Forever Green. The Forever Green program is one of FMR’s top priorities for the session, though we would much prefer it be funded with general fund money.

    The big changes are as follows:
    • Forever Green: Full funding for the University of Minnesota’s Forever Green Initiative at $10 million for the biennium. 
    • CREP delay: Reduced year 1 funding for the Conservation Reserve Enhancement Program, in order to free up funds for Forever Green. This change is proposed because federal delays prevent the state from using CREP money this year.
    • Other cuts: The House zeroes out several items, including agricultural research, a Clean Water Council awareness campaign, Department of Natural Resources infrared imaging, urban stormwater funding and conservation drainage funding.
    • Other additions or increases: Additional funding was provided for micro/nano-plastic and surface water monitoring, as well as grants to the Metropolitan Council.
       
  • Senate position (Senate File 836 - Rep. Ruud)
    The Senate Clean Water Fund bill (SF 836) also alters the council recommendations, largely to fund local Soil & Water Conservation District (SWCD) operations to the tune of $24 million.

    Big changes include:
    • $24 million to SWCDs: The bill provides $24 million in funds for local Soil & Water Conservation Districts. This controversial provision is one FMR opposes, as local government operations have historically been funded with state general fund money.
    • Cuts to most agency budgets: $24 million in SWCD money had to come from somewhere, so most (but not all) of the programs in the fund are trimmed back to clear room for this money.
    • Other cuts: The Senate zeroes out funding for Forests for the Future, the Clean Water Council awareness campaign and additional work at the University of Minnesota and Board of Water & Soil Resources, and cuts about half the support budget for the Clean Water Council.
    • Other additions or increases: The Senate provides new money for the Red River Water Management Board and some stream monitoring programs.

Resolving conflicts between the “big three” items

At the heart of the Clean Water Fund debate are three competing items (CREP, Forever Green and SWCD funding). Each has broad support, and each has alternative sources of funding that could be included in other legislation.  

  1. Forever Green: FMR and our allies advocated strongly that this money come from the state’s general fund budget (through the Omnibus Agriculture Finance Bill). That bill could be amended to provide full funding for Forever Green. If not, the “extra” CREP money in the Clean Water Fund bill (see below) could be used for Forever Green or SWCDs.
  2. Conservation Reserve Enhancement Program: This program has traditionally been funded through bonding. A bonding bill that includes CREP would free up Clean Water Fund resources, but the two sides aren’t close on bonding negotiations. Meanwhile, delays at the federal level mean CREP money can’t be used in the first year of this budget — potentially freeing those “extra” funds up for Forever Green or SWCDs independent of a bonding bill.  
  3. Soil & Water Conservation Districts: The House includes some money for SWCDs in the state’s general fund budget (through the Omnibus Environment Finance Bill). The Senate environment bill does not, pushing all SWCD funding into the Clean Water Fund instead. Amending the final Omnibus Environment Finance Bill to include SWCD funding frees up Clean Water Fund money for CREP or Forever Green.

End-of-session negotiations between the House, Senate and Gov. Walz will involve negotiations on a final state budget bill, a bonding bill and the Clean Water Fund bill. How each is decided has implications for each of the “big three” items in the Clean Water Fund this session.

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[i] The state is required to leave 5% of the fund unallocated as a cushion in case forecasts fail to match actual revenues.