Capitol Update for April 17, 2009

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This week’s update from lobbyist John Tuma:

“When I find a guy who can paddle better, shoot straighter, snowshoe faster, split wood quicker, and portage bigger loads, I’ll marry him.”
– Dorothy Molter, 1907-1986*

Dorothy Molter is arguably the last of a long line of resourceful pioneer women in Minnesota history.  Dorothy was an athletic and shy nurse from Chicago who had just finished her nursing training when she went on a fishing trip with her father in the late 1920s to a remote wilderness camp on Knife Lake on the Canadian border.  She fell in love with the wilderness life and stayed on as an employee of Bill Berglund’s Pine Island resort.  These rugged wilderness resorts that were within what is now the Boundary Waters Canoe Area Wilderness were nothing like what we consider resorts today.  They were essentially permanent camp sites that required physical labor, living off the resources of the land, and a long day’s paddle to get any supplies from the outpost town of Ely.

Dorothy inherited the wilderness resort in 1948 after Bill Berglund died.  Dorothy single-handedly packed Bill out on a toboggan in the middle of a blizzard after he fell sick.  Dorothy was first referred to as the Florence Nightingale of the wilderness because of her nursing skills.  She would occasionally return to Chicago during the winter to visit family and work double shifts in Chicago hospitals around Christmas.  This gave her the financial means to remain in the wilderness.  Ely wilderness outfitters would always put a mark on their clients’ maps where Dorothy’s cabin was just in case they got injured.

As the wilderness designation to the Boundary Waters was being established, several other resorts had to shut down.  Dorothy and a few of the other longtime residents were allowed to live out their days on their property, but as part of the buyout were not allowed to run a business.  Always resourceful, she provided ice cold homemade root beer to passing canoeists for a small “donation.”  She became a folk legend to canoeists who would stop by to visit the Root Beer Lady and donate broken paddles to the fence that encircled her garden.  She was a master of resourcefulness, living a simple life on her own in the wilderness.  She was renowned for her ability to paddle and portage with the best.  Apparently she never did find anyone who could keep up with her in the wilderness because she never married.  Dorothy became one of the last residents to still live in the BWCA well into her 70s.  She passed away in her winter cabin in December of 1986.

The 2009 Minnesota state budget is shaping up to be as unrelenting and brutal as the Boundary Waters Wilderness in the winter.  State revenues have plummeted and the budget forecasts are indicating that almost 20% of our state’s anticipated revenues have been lost.  Past budget difficulties have resulted in disaster for environmental programs.  Therefore, we are in need of a resourceful woman or two like Dorothy to get us out of this jam.  We are at the stage of the legislative process where the finance committee chairs working closely with their committees start to put together and pass the budget proposals.  The two environmental finance chairs, Rep. Jean Wagenuis (DFL-Minneapolis) and Sen. Ellen Anderson (DFL-St. Paul), have now rolled out their budget proposals.  These two women have definitely shown some resourcefulness in trying to meet some very difficult budget targets given to them by their legislative leadership.

With the passage of the Clean Water, Land and Legacy constitutional amendment, environmental groups are watching closely to make sure the intent of the citizens to enhance environmental funding is actually accomplished as opposed to just using the money to back-fill budget shortfalls.  The standard we have been suggesting is that conservation and water programs should not be cut disproportionately.  In past state budget shortfalls, these areas have typically taken the largest proportional hits.  At first glance, the budgets proposed this week by chairs Wagenuis and Anderson have come up with some resourceful solutions attempting to avoid disproportional reductions.

The three largest agencies dealing with conservation and water programs are the Pollution Control Agency (PCA), Department of Natural Resources (DNR) and the Board of Water and Soil Resources (BWSR), which have just over $1 billion in expenditures.  The Governor recommended an overall funding reduction of 1.8% in these three agencies.  By comparison, the Senate recommended a similar reduction of 1.7%.  The House actually had a slight increase to the overall budget, thanks to nearly $24 million in additional fees going into the dedicated Environment Fund.  Most of the DNR and PCA funding comes from dedicated revenue sources like the Environment Fund which is outside of the general fund budget.

Under the Senate plan, the PCA would see about a 5.8% reduction in their general fund expenditures compared to a 10% cut in the general fund under the House proposal.  It is in the PCA budget where Rep. Wagenuis uses most of her resourceful fee increases, $20.07 million to be exact.  Therefore, despite the 10% cut in the general fund, she is able to give the PCA a significant increase in their budget to put an emphasis on water programs.  Although this is great on the expenditure side, we will hear from those who have to actually pay the fees.  A few of our traditional partners in the Clean Water Legacy coalition known as the G-16 are howling like the wolves outside of Dorothy Molter’s cabin door.  In particular, the cities and businesses will be paying higher water and air permitting fees under this proposal.  The Senate proposal has no similar fee increases to the Environment Fund.  This will set up some interesting challenges as we go into conference committee.

The overall DNR budget decreases by a little over 2% in both the House and Senate proposals.  The general fund budget is decreased by 6.3% in the Senate and 6.6% in the House.  Both the House and Senate have proposed to increase mining permit fees by $1.2 million a year.  The Senate has an additional $2.2 million in fee increases which is the reason their cut is slightly less to the DNR.

BWSR is the hardest hit of the three major conservation and water agencies.  It is a much smaller agency than either the DNR or PCA with an overall budget around $40 million.  It also suffers during lean general fund budget times because the majority of the agency’s budget comes from the state general fund.  The Governor had proposed a 10% cut to the agency’s general fund budget.  Because almost all of their programming is for conservation and water protection, it is one agency that if cut disproportionately could arguably be a violation of the Constitution.  Therefore, the 10.9% general fund cut by the Senate is somewhat concerning.  The Senate was very careful to point out that the programs directly connected to conservation and water were only cut between 5% and 7% each.  Because the Senate has set a goal to have a 7% across-the-board cut, they would argue that they have not violated the constitutional requirement that money generated from the dedicated sales tax increase are not replacing traditional sources of funding spent on those programs.

The House treats the BWSR budget slightly better by making only a 5.7% cut to the agency’s general fund.  This was due in part to an additional million dollars in feedlot monitoring resources being provided to the agency.  Again, the House’s willingness to increase fees gave them more room to protect BWSR’s budget.

The environmental community will be carefully analyzing the budgets as they continue to develop to determine whether there is a violation of constitutional language that prohibits the new sales-tax dollars from being used to replace traditional sources of funding.  The challenge will be analyzing these omnibus finance bills with the separate bills that spend the new constitutional amendment resources which will be put together next week.  The one thing the constitutional amendment has done is place environmental agency budgets in a far better position at this first step in the budget process compared to other down budget years.

However, don’t get too excited about being in a good position at this stage of the game.  Even though the differences between the Governor, the House and the Senate seem small right now, they are predicated on $1.5 to $2 billion of “funny money.”  Each of the three parties has about $1.5 to $2 billion in areas where they know the other parties will likely not want to go.  The Governor has a significant amount of his budget balanced on a shaky untested refinancing scheme and huge cuts in Health and Human Services he knows the DFL will not accept.  Both the House and Senate balance their budgets on huge tax increases they know that the Governor and his Republican allies in the Legislature will not accept.  If the legislative leaders and the Governor can’t work out these differences, chairs Wagenuis and Anderson will be carrying some pretty big loads on the budget portage by the end of session.

*From Root Beer Lady: The story of Dorothy Molter, by Bob Cary, Pfeifer-Hamilton Publishers, 1993, page 48.

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