Wednesday, February 8th, 2023
Wednesday, February 8th, 2023

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Committee questions use of lottery dollars

St. Paul, Minn. The House Environment and Natural Resources
committee sent a letter Tuesday to DNR Commissioner Allen Garber
questioning the agency’s spending of the lottery in-lieu dollars
for the upcoming biennium.

During its 2000 session, the state Legislature shifted
approximately $25.5 million in lottery sales tax proceeds from the
General Fund to natural resources funding. The Legislature directed
half the money toward game and fish resources, and the remainder
was earmarked for state and metro parks, and trails. The law
regulating the use of the dollars said that the revenues could not
be used as a substitute for traditional sources of funding.

In Tuesday’s correspondence, however, the committee outlined
concerns that the DNR’s 2002-03 budget does just that: uses
lottery-in-lieu expenditures to offset budget reductions in other
basic services. The letter said:

“Our review of DNR’s budget reallocations and lottery-in-lieu
expenditure proposals shows an alarming correlation. DNR is making
reductions which will have negative impacts to services and
resources while also proposing Lottery-in-Lieu expenditures that
offset those reductions.

“Further, it is interesting to note that the majority of general
fund reallocation increases occur in the Division of Operations
Support, which does not receive Lottery-in-Lieu monies.”

Thirteen members of the committee signed the letter: Rep. Mark
Holsten, Tom Osthoff, Tim Finseth, Loren Jennings, Margaret
Anderson Kelliher, Tom Hackbarth, Howard Swenson, Tom Workman, Tom
Bakk, Jean Wagenius, Larry Howes, and Scott Wasiluk.

During budget planning last year, Gov. Jesse Ventura challenged
state agencies to reallocate dollars from existing programs, rather
than request increased funding, to finance new or high priorities.
The committee’s letter noted the challenge from Ventura.

“Although we recognize the difficult budget constraints Gov.
Ventura placed on your agency, we are skeptical at best, that the
DNR’s proposals meet the spirit and language of state law
297.44(f), that regulates the use of Lottery-in-Lieu money.”

The committee has compiled several pages of examples showing
base resources that have been reallocated adjacent to
lottery-in-lieu monies that now fund those same services. In its
letter to the DNR, the committee said that the DNR’s budgetary
actions for FY02 and FY03 threaten the future of lottery
monies.

“The Legislature, sportsmen and sportswomen, and environmental
organizations worked diligently to secure the Lottery-in-Lieu
monies as an additional source of funding to improve and enhance
Minnesota’s fish and wildlife resources, parks and trails.

“DNR’s budgetary actions for FY02 and FY03 minimize this
commitment and further jeopardizes the future of lottery
monies.”

Committee Chair Mark Holsten, R-Stillwater, who authored the
House language last year for the lottery dollars said he believes
the budget proposal violates proponents’ original reasoning behind
the funding.

“The groups who worked very hard to secure these monies should
be a little disheartened,” he said. “They worked to create this to
shore up areas that have been deficient in funding, especially for
habitat work.”

Asked if Legislative approval of the DNR’s budget proposal would
violate the legal language behind lottery-in-lieu, Holsten replied,
“As I see it, we’re pulling money away from base funding and
back-filling it with lottery money. That would appear to be very
contradictory to the law we wrote.”

One example Holsten cited was a shift of emergency maintenance
resources in parks and recreation. In FY02, the budget calls for
moving $75,000 out of emergency work on roads, electric lines,
sewers, and other park infrastructure maintenance. At the same
time, the budget directs a $280,000 allocation from lottery-in-lieu
monies toward “emergency maintenance” for state parks.

DNR Deputy Commissioner Steve Morse said the funding
reallocation affects less than 1 percent of the entire DNR budget
and will result in a more efficient DNR providing more services for
the public.

“We’re not removing any funding from the agency. We’re
redistributing funds to get the most bang for the public dollar,”
he said.

The operations support division supports ground services,
including game and fish programs, he said.

“Game and Fish are going to be big beneficiaries of this while
contributing a modest amount.”

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