Minnesota voters will decide whether to keep using lottery dollars for environmental restoration

Minnesota voters will get the chance next year to renew a 35-year-old program that directs much of the state's lottery profits to water and environmental restoration projects.

Lawmakers agreed to ask voters on the 2024 ballot to renew a constitutional amendment that gives 40% of lottery profits to the state's environmental and natural resources trust fund. They also added language that tries to prevent future lawmakers from drawing on the money for costly sewage treatment projects.

The environmental and natural resources trust fund was approved by voters in 1988 and is set to expire in 2025. To date, it has provided more than $800 million to research and restoration projects.

The fund has paid for studies on the state's black bears and gray wolves, and the cost of relocating and rescuing tiny endangered ball cacti and bristleberries. It has helped restore wetlands and keep shorelines from eroding. And it has paid for reintroducing native mussels, restoring small segments of prairie and slowing down the spread of invasive carp.

The state needs the keep the fund strong, said state Sen. Foung Hawj, DFL-St. Paul.

"This protects and preserves our air, water, land, fish, wildlife and other natural resources," he said. "When people buy a lottery ticket, they know it at least serves some purpose — that a percentage will go to the environment."

The Senate voted 36-29, largely along party lines, to push forward the renewal. If approved by voters, it would extend the fund until 2050.

In recent years, the money has been increasingly tied up in political battles that have delayed or threatened dozens of projects. Republican lawmakers have tried to use some of the money to pay for water treatment plants and upgrade wastewater systems, especially in rural areas — moves that Democrats and environmental groups decried as attempts to raid the fund.

The proposed amendment would explicitly ban using the trust fund for any wastewater infrastructure projects.

"There's a disconnect here," said state Sen. Torrey Westrom, R-Alexandria. "Cleaning up wastewater would be about as strong of a thing you could do if your mission is to protect and enhance the environment."

Hawj said that the state typically pays for wastewater and infrastructure upgrades through its bonding process. The trust fund would be quickly depleted if it were used to build treatment systems, he said.

"We have to be conscious of how we use the funds, so it's not raided," he said.

If it is renewed, lawmakers would also start using more of the fund each year. The state would spend 7% of the trust fund every year, up from 5.5%. The increase would amount to about $24 million a year, which would specifically be set aside for smaller community grants to fund projects in communities that haven't typically received trust fund dollars in the past.

Under the new format, lawmakers would continue to approve how 5.5% of the fund is spent under its current system. The Department of Natural Resources and a citizens advisory committee would decide how to award the 1.5% in smaller community grants, giving priority to projects in places that have been "adversely affected by pollution and environmental degradation."

"What we've learned is that some of these larger projects are sinking $10,000 or $20,000 or more when they're applying for grants," Hawj said. "That's not an option for a lot of smaller projects throughout the state. This will make sure that underserved places are not getting left behind."

Lottery sales and profits are expected to increase in the coming years. The trust fund is expected to have a $1.5 billion balance in 2024. Even with the increased spending that is expected to grow to $2.2 billion by 2040.

63.5 cents: Player winnings
12.4 cents: State's general fund
6.7 cents: Incentives and commissions for retailers
6.6 cents: Tickets, vendors and administration
5.9 cents: Environment and natural resources trust fund
4.9 cents: Other environmental programs

Source: Minnesota Lottery