Capitol Update for March 23, 2007

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John Tuma has sent his weekly update from the Capitol:

“Money, get back.
I’m all right, Jack, keep your hands off of my stack.
Money, it’s a hit.”
–Pink Floyd

The Money Song by Pink Floyd hit the top 20 on the charts in 1973 when I was listening to KDWB on the bus riding into the Don Maguire Middle School in the then farming community of Lakeville.  Now that I think of it, the 70’s were kind of the dry period for good rock ‘n roll.  Nonetheless, this old British rock song was banging around in my head this week at the Capitol for good reason.  The legislative session has hit that period of time when the committee process puts together their funding bills.  Here are some of the nitty-gritty details from this week’s legislative budget performances.

The Senate Environment, Energy and Natural Resources Budget Division, chaired by Sen. Ellen Anderson, put together its omnibus bill on Tuesday.  It was a very complicated budget structure because the Senate general fund targets were very tight for the environment.  The Senate Finance Committee only allocated $20 million of additional permanent and ongoing funding over existing general fund base of $334 million.  This $20 million had to be spread across the Pollution Control Agency, Department of Natural Resources, the Minnesota Zoo, the Board of Water and Soil Resources (BWSR), and the energy portions of the Department of Commerce. 

The committee was also allocated a generous $81 million in one-time revenues.  This is additional revenue that is in the bank from collections of revenue over the last biennium.  It is like money sitting in your savings account.  You get to spend it once, but you can’t commit it to ongoing future budget spending.  Therefore, the committee did some creative accounting with the designated accounts and one-time money. 

The Clean Water Legacy (CWL) funding was some of the most creative.  The Senate plan is to fund $35 million each year of the biennium for CWL out of the one-time money.  This is despite the fact that the money is going toward programs that are anticipated to be ongoing commitments of the state.  The theory is that the dedicated funding constitutional amendment will provide the CWL funding in the next biennium and beyond. 

This is a risky endeavor.  If the dedicated funding constitutional amendment does not pass the Legislature or fails at the ballot box, the CWL programs will be in serious jeopardy.  Further, the $35 million is substantially below the $100 million dollars needed annually to get Minnesota on track to identify the condition of lakes and rivers in the next 10 years.  Hopefully this number will improve when we get to the conference committee and with additional funding in next year’s Capitol Investments Bill.

The Senate Division showed a strong commitment to energy programs.  They proposed $500,000 for bioenergy monitoring grants and $200,000 for Reinvest in Minnesota (RIM) clean energy standards in one-time money going to BWSR. It doesn’t appear that they provided any funding for the actual RIM clean energy easements.  The division recommended new ongoing base funding for the Demand Efficiency Program at $2.8 million for the first year and a $4.9 million for the second year.

The Senate substantially increased the Renewable Development Account by requiring Xcel Energy to pay another $16 million annually to be able to store casks at their Monticello nuclear plant.  It already pays $16 million annually for the Prairie Island dry casks.  The obligation to pay does not take place until Xcel actually starts storing spent rods in dry casks at the Monticello plant which will probably not take place for another year or two.

The Senate has tentatively scheduled the omnibus environment bill to be heard in the full Finance Committee next Tuesday and on the floor of the Senate next Wednesday.  The Senate set a more aggressive deadline for itself on passage of omnibus bills.  They want all bills passed off the Senate floor before they go on Easter break April 2. 

In keeping up the Senate’s aggressive pace, the Agriculture and Veterans Affairs budget bill passed off the floor Thursday.  Thanks to the chair, Sen. Jim Vickerman and Sen. Gary Kubly the bill has a strong commitment to the next generation of ethanol from prairie grass.  This bill included all our producer incentive payment program language, the revolving loan fund, and research funding.   Even though the committee had tight budget targets, the next generation provisions received $4.9 million.  Unfortunately, the committee diluted some of the planting restrictions.

The House has taken a more deliberate approach to its funding bills.  The budget divisions only have to pass their bills out by Easter break.  The House Environment and Natural Resources Finance Division has significantly more money to work with than the Senate.  The House Ways and Means Committee gave the Environment Division approximately $75 million over the previous biennium.  The committee will also get some one-time funding to supplement this base funding.  The environment community owes a debt of gratitude to Rep. Jean Wagenius, chair of the Environment Finance Division, for skillfully obtaining a good funding target for her division.

The big picture on the budget is that going into the session the environment sat at a 30 year low as a percent of the general fund.  This was created because the environment budget took a significant hit four years ago to help balance the budget.  The proposals in both the House and Senate do not get us back to the level of funding from four years ago, but they make a significant step in the right direction.  There will be a lot of pressure from other interest groups to go after our money and we will have to work hard to “keep their hands off of our stack”.

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