Tuesday, January 31st, 2023
Tuesday, January 31st, 2023

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DNR considers options for big budget-crunch

St. Paul – The state of Minnesota’s current economic hard times
likely won’t affect the DNR much – at least not yet, according to

Last week, state leaders were mulling how to deal with a
projected $5 billion budget deficit over the 2010-11 biennium; it’s
a topic legislators will take up in January. In the meantime,
there’s the smaller matter of a $400 million-plus shortfall over
the remaining six months of fiscal year 2009.

“There are two different budget problems – the existing budget,
and structuring the budget for the next biennium,” DNR Commissioner
Mark Holsten said earlier this week.

Holsten said unlike other state agencies, the current shortfall
won’t cause much of a shakeup in the DNR. That’s because, he said,
the agency “has been very conservative in management,” anticipating
the likelihood of budget shortfalls this year.

“We’re not expecting to see any significant impacts in the next
six months,” Holsten said. “We’ve been saving where we could … in
case we got into this situation.”

Holsten said part of the strategy has been leaving vacancies
open when employees, such as retirees, have left the agency.
Further, General Fund (state) dollars represent a small percentage
of the DNR’s Fish and Wildlife Division’s overall budget; of a
budget of $60 million to $70 million, only about $2 million to $3
million comes from state General Fund coffers, he said.

When it comes to addressing department funding over the course
of the next two years, the situation would be different, Holsten
said. Although the agency’s dependence on license dollars makes it
to a lesser degree immune to state financial ailment, bootstraps
nonetheless will require tightening. How that will be done is under
consideration, he said. “(With) everything within this budget …
we’re looking at money-saving opportunities.”

The DNR’s 2008-09 budgeted expenditures included about $248
million from the General Fund – about one-third of the department’s
expended funds. Denise Anderson, the DNR’s chief financial officer,
said part of that funding is pass-through PILT (payment in lieu of
taxes) to municipalities.

(According to the DNR web site, under current law, 86 percent of
the money in the state General Fund will be spent in the next two
fiscal years – 2008-09 – on the following: K-12 education, health
and human services, higher ed, and aid to local governments. Less
than 14 percent … will be spent on all other state agency
operations and services. The DNR General Fund budget is less than 1
percent of the statewide General Fund.)

The DNR’s next-biggest pot is the Game and Fish Fund, which
consists of funds from licenses, stamps and permits, some federal
funds, and others. That fund accounts for about one-fourth of the
DNR’s revenue.

The Natural Resources Fund – with revenues from recreational
vehicle registration, some timber sales, and more – accounts for
about 22 percent of the DNR’s expenditures.

Also paying for DNR expenses are federal funds, the Environment
and Natural Resources Trust Fund, and special revenue.

Holsten said it’s uncertain which of the DNR’s divisions might
be more greatly affected by reductions in funding during the next
two fiscal years. He said the Forestry Division, as well as Parks
and Recreation, and Trails and Waterways, have been most reliant on
General Funds in the past. The latter two divisions are in the
process of consolidation. (See related story on Page 4.)

Besides state funding, other sources also might be subject to a
downturn, given the nation’s struggling economy. Holsten said he
hadn’t seen the latest on hunting license sales in the state, but
added that fishing license sales were down this year. Formulas for
receiving federal dollars recently were revised, he added, meaning
the state DNR recently has received more funding.

But they’re no likely to offset General Fund losses in coming
years. Early retirement offerings might be one of many options the
DNR considers to meet state-mandated agency spending reductions,
Holsten said.

“We’re going to be leaner, there’s no question about that,” he
said. “It’s just a question of how lean.”

State agencies are working with Gov. Tim Pawlenty’s
administration and Minnesota Management and Budget to formulate
budget requests; the state Legislature will take up budgeting when
the session begins in January.

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