Nonprofit, independent journalism. Supported by readers.


Future of Minnesota environment funding, state lottery could be on your ballot in 2024

While the constitutional update is flying somewhat under the radar at the Capitol given a record $17.5 billion surplus, legislation to renew lottery money for the Environment and Natural Resources Trust Fund could be among the more notable policies under consideration this year.


This summer and next summer, a team led by Briana Gross will spread out across northeastern Minnesota to count the flowers of wild blueberries while measuring the size, weight and other aspects of the fruit and a few closely related species.

“We have people in my lab who mush up the fruit and count the number of seeds,” said Gross, who is a professor at the University of Minnesota Duluth.

The goal? To scrutinize how berry populations react to land management, and to learn more about the genetic diversity and reproductive health of a fruit that is an important food source for Minnesota’s Indigenous communities and a treasured wild crop across the Arrowhead region that inspires at least one festival, baked goods and even blueberry beer. The study could yield valuable information on how to improve the long-term prospects of wild blueberries.

Gross’ research was one of 80 projects to get money in 2022 from the Environment and Natural Resources Trust Fund, which is seeded by cash from Minnesota’s lottery. That fund has doled out more than $900 million since 1991 for a wide variety of environmental projects.

Article continues after advertisement

But part of the Minnesota Constitution that directs lottery money into the trust fund is set to expire in 2025. That’s why state lawmakers are working on an extension that could be on the statewide ballot in 2024.

It’s a major milestone that will determine the future of environmental funding in Minnesota. And while the constitutional update is flying somewhat under the radar at the Capitol given a record $17.5 billion surplus, legislation to renew the trust fund could be among the more notable policies under consideration this year.

Democrats who control the Minnesota Legislature have proposed some tweaks to how the cash is spent, including one motivated by a debate over using the money for wastewater treatment plants. Lawmakers may also change the council that vets and recommends projects.

There have been periods of criticism and controversy over the years about the environmental trust fund. And some Republicans in the Legislature have pushed for bigger changes to what the lottery pays for. Meanwhile, nonprofits and advocacy groups — many of which benefit from the money — have been gearing up to support a new constitutional amendment.

History of the environmental trust fund

In 1988, Minnesota voters first authorized the Environment and Natural Resources Trust Fund along with a state lottery. A portion of that lottery money — first because of state law, then later because of a second constitutional amendment — flows into the environmental fund. Right now 40% of net lottery proceeds are dedicated to the trust fund, while the other 60% goes into the state’s general fund.

A certain amount of the cash can be used each year on the “protection, conservation, preservation, and enhancement of the state’s air, water, land, fish, wildlife, and other natural resources.”

But there are some limits. For instance, state law says the money is meant to supplement the work of state environmental agencies, not supplant regular funding for basic services. Exactly what counts as supplemental has been a topic of debate.

The Legislative-Citizen Commission on Minnesota Resources, a 17-member council made up of Republican and DFL state legislators and people appointed by lawmakers and the governor, oversees the money. The council screens proposals and this year recommended 85 projects with a total $79.8 million price tag. Ultimately, the Legislature decides what to fund.

Article continues after advertisement

A large share of the money usually ends up in the hands of state agencies like the DNR, or is used by the University of Minnesota system. But local and tribal governments, soil and water conservation districts, nonprofits, and other organizations do get cash, too. This year, the LCCMR recommended projects run by Friends of the Mississippi River, Audubon Minnesota, Hawk Ridge Bird Observatory, The Nature Conservancy, the University of St. Thomas and more.

The trust fund was approved overwhelmingly by voters in 1988 and more than 77% of voters chose to extend the constitutional amendment dedicating lottery money for the trust fund in 1998. But interpreting exactly what voters wanted has led to debate and disagreement at times. For example, some legislators have wanted the money to focus more on projects that directly benefit recreation like hunting, fishing and trails while others have pushed for research and other environmental efforts like helping pollinators.

Legislators also sometimes stray from LCCMR recommendations, which can cause controversy and accusations of political opportunism or wrongful interference in the vetting process.

Perhaps the most heated controversy over the trust fund in recent years came in 2018. That year, lawmakers used trust fund money to pay the debt service on special bonds for a $98 million package of construction projects benefiting the environment, including water treatment in small towns. State laws authorized alongside the constitutional amendment said the cash could not be used to control city water pollution with an exception for certain loans. But legislators that year simply changed the law to allow lottery money to pay for what a bonding bill normally would fund.

The spending drew protests from environmental nonprofits and some Democrats, who argued that trust fund money was not meant for such infrastructure and that the budget maneuver also violated the state constitution. Legislators backtracked in 2019 following a lawsuit from organizations like the Minnesota Center for Environmental Advocacy and Friends of the Mississippi River.

One important note: The trust fund and lottery system is completely separate from the Clean Water, Land and Legacy Amendment approved by voters in 2008. That money has similarities in how it’s used. But that constitutional amendment dedicated money from a new state sales tax for environmental projects, along with arts and cultural heritage programs.

What DFL lawmakers have proposed

The trust fund itself is permanent. But the Minnesota Constitution says 40% of the lottery proceeds must go to the trust fund until 2025, meaning the account is set to lose its primary source of money. The fund can also take donations, and the State Investment Board invests the cash to bring in extra returns from the stock market. 

Still, the end of dedicated lottery funding is why lawmakers are working on a new constitutional amendment that would extend the current funding stream. The Legislature can send the question for voters to consider on the 2024 ballot with a simple majority vote in the House and Senate.

Article continues after advertisement

The most recent version of the extension proposal, sponsored in the House by Rep. Athena Hollins, DFL-St. Paul, and in the Senate by Sen. Foung Hawj, DFL-St. Paul, would change the current status quo. Under the plan, the constitution would dedicate more of the lottery money — 50% instead of 40% — to the trust fund. And lawmakers would be able to spend more of the fund in every biennium. The House plan includes a 2050 sunset for using lottery money to bankroll the trust fund, while the Senate bill currently doesn’t have an end date.

The proposal also says the money can’t be used to pay the principal or interest of any bonds. And it would ban lawmakers from using the money to pay for upgrades to wastewater treatment facilities, a direct response to the 2018 debate.

State Rep. Athena Hollins
State Rep. Athena Hollins
Hollins said wastewater treatment could “suck up a good amount of money that goes into the trust fund” and potentially allow Republicans to sidestep a process for traditional bonding that is already politically fraught but typically involves money for the water plants. “We really just wanted to make sure that we nip that in the bud and limit the uses of this particular program to what is clearly stated in the purpose language,” she said.

Another change to the trust fund in Hollins’ bill would create a roughly $20 million per year “community grant program” aimed at helping smaller nonprofits access the money, especially groups that seek to help people of color or low-income rural areas. Extra income into the fund from unclaimed lottery prizes and the larger share of lottery money would help fund the initiative.

Lastly, House Democrats have proposed modifying the LCCMR, expanding the council from 17 to 19 members and changing the makeup in several ways, including a requirement that one member be recommended by the state’s Indian Affairs Council. The bill would also ban registered lobbyists, lower a voting threshold for official recommendations meant to make it easier for the council to make official recommendations and impose eight-year term limits on citizen members. The idea of term limits has at least some Republican support.

The House DFL plan would also block LCCMR members from voting to recommend projects tied to an organization they have “direct personal financial interest” in. The LCCMR changes would be made in state law, not the constitution.

Response from Republicans and environmental groups

Republicans in the Minnesota Legislature have their own ideas for what should be next for the trust fund. Rep. Josh Heintzeman, R-Nisswa, sits on the LCCMR and is the top Republican on the House’s environmental committee. He told MinnPost that he would prefer to dedicate the 60% of lottery revenue that now flows into the state’s general fund to pay for upgrades to parks and trails across the state.

“Our parks and trail systems in many cases are really showing their age in terms of the infrastructure, and the paths and the paved trails themselves being in disrepair,” he said. “We’re not going to magically fix this problem if we stay on the current trajectory.”

Other than that, perhaps Heintzeman’s biggest concern is about banning the money from helping wastewater treatment plants or from being used in bonding. He said the debate over whether that would be “supplemental” funding or not is esoteric when Minnesotans simply want the money to help pay for cleaner water, parks, trails, infrastructure and more.

Article continues after advertisement

Assuming the House version of the bill passes, Heintzeman said when he heads to the polls in 2024 as a voter he’s not sure if he would support renewing lottery money for the trust fund for another 25 years. “I might have to protest vote ‘no’ just on a personal level,” he said. “I guess I would have to think about that.”

Democrats haven’t advanced Heintzeman’s ideas for parks and trails. And the DFL has a majority in the House and Senate, allowing them to move ahead with their plan for the trust fund.

An array of environmental organizations have backed that plan, including Conservation Minnesota, Ducks Unlimited and the Nature Conservancy.

Kateri Routh, executive director of Great River Greening, said during a late March hearing in the House Environment and Natural Resources Finance and Policy Committee that her organization has received money to help pollinator habitat, implement cover crops aimed at reducing agricultural water pollution, and more. They hope to get more money in the future to help improve urban tree canopy. 

Eli Mansfield, board chairman for the Minnesota chapter of the Backcountry Hunters and Anglers, said the trust fund can help projects around the state.“There are thousands of individuals across Minnesota … who want to leave our wild places and wild things better than we found them,” Mansfield said. “Their ideas and their projects need funding.”

Briana Gross
Briana Gross
Gross, the UMD professor studying berries, said the research funded with $191,000 from the trust fund and carried out with the help of graduate and undergraduate students is important to better understand fundamental questions about culturally important wild fruit. For instance, inbreeding in a berry crop with a lack of genetic diversity can result in small berries, or sometimes no berries. Her work could lead to real solutions for problems.

“Let’s imagine that we find that there’s not enough genetic diversity in these (berry) populations,” Gross said. “The good thing is we can germinate the seeds for these species pretty easily. So one obvious fix would be, OK we’ve got this berry population, people love picking blueberries here, we want to preserve it, let’s just go in and let’s plant some seedlings and get some new genetic diversity in the population.

“It might not require very much modification to get that population producing again over the long term,” she said.