Clean Water Legacy Act and Constitutional Dedication of Sales Tax
December 2011: Legislative Auditor Releases Reports on Legacy Funding
The Office of the Legislative Auditor conducted both fiscal and program reviews of the constitutional legacy funding. The audit found some accounting issues and raised questions about potential conflicts of interest. It did not recommend some of the changes proposed in the legislature last session, finding that the existing oversight structures each had some benefits.
The program audit reviewed the four funding streams set up by the constitutional Legacy Amendment: habitat, clean water, parks and trails, and arts. Each of the four funds has a different method of oversight and distribution and the audit did not recommend major structural changes. A bill introduced during the 2011 session proposed to eliminate the existing Clean Water Council and create a new legislative oversight body in the shape of the Lessard-Sams Outdoor Heritage Council. The report determined that the differences in oversight “reflect varying histories, purposes, constituencies, and approaches to an ongoing struggle between keeping administrative layers to a minimum and ensuring transparency and accountability.”
Legislators, agencies, grantees, and observers have had difficulty interpreting the constitutional language instructing that the funding be used to “supplement not substitute for traditional sources of funding.” The audit found that the interpretations of this language had changed over time, with the legislature moving away from the idea that the Legacy money could support administrative costs. The report did not provide its own definition or instructions on how to interpret the language, but suggested that the Department of Management and Budget do so. To date, MCEA has worked to ensure that general funding is maintained at existing levels and the Legacy funding is added to that total.
In addressing concerns from outside groups, the report noted that environmental groups sought to ensure the clean water funding was spent efficiently and led to water quality improvements. The report quoted MCEA’s report on grants issued by the Board of Water and Soil Resources for clean water and a letter written by Freshwater Society President (and MCEA board member) Gene Merriam. MCEA has worked to ensure that the funding yields the greatest improvements in water quality for the money spent and will continue to do so.
The fiscal audit looked at accounting procedures and grants made by the state agencies. The audit found that accounting procedures were generally good, with a few exceptions. Multiple agencies issued grant funding without following the procedures requiring reimbursement with proper documentation. The agencies did not always have controls in place to ensure that the spending was consistent with the funding restrictions of Legacy grants. The report recommended increasing accounting controls and documentation to ensure proper spending.
Read more:
Program Audit of the Legacy Amendment (PDF) / Official Summary (PDF)
Funding Audit of the Legacy Amendment (PDF) / Official Summary
Current Clean Water Legacy Funding
The constitutional amendment currently provides approximately $85 million per year for clean water. This funding has been distributed to state agencies, which grant a portion of the total to local governments for projects on the ground. The funding supports water quality monitoring, preparation of clean up plans for impaired waters (TMDLs), sewage treatment plant upgrades, drinking water protection, improved agricultural practices, and water quality research tools.
Read a two-page summary or this document with additional details to see how the Legislature allocated the Clean Water Fund for fiscal years 2012 and 2013.
Given the scope of the problem, public funds to reduce agricultural runoff must be targeted to the places that can have the greatest impact. MCEA evaluated the nonpoint source projects funded under the constitutional amendment and the Clean Water Legacy Act through grants distributed to local units of government by the Board of Water and Soil Resources (BWSR). MCEA chose to analyze this spending because it is the only programmatic clean water funding stream that is not subject to ranked list of priority work based on water quality benefit. We found that much of the spending was poorly targeted, in part because of inadequate identification of specific agricultural pollution sources in Total Maximum Daily Load studies. MCEA has had several positive discussions with BWSR about implementing recommendations made in the report.
History
Beginning in 2004, representatives of business, agriculture, local governments and environmental organizations gathered together to tackle the problem of water pollution and Minnesota’s lack of financial resources needed to fulfilling the mandates of the federal Clean Water Act. The group, appointed by the Minnesota Pollution Control Agency, dubbed itself the “G16.” Minnesota Center for Environmental Advocacy was a leading player in the group.
The G16 determined that in order to meet the federal standards, Minnesota agencies needed $100 million per year to test the lakes and rivers once every 10 years and develop and implement plans to clean up those that are polluted.
In 2006, the state Legislature passed the Clean Water Legacy Act to provide funding to monitor, clean up, and prevent pollution of lakes, rivers, and streams. However, advocates of the act, including MCEA, felt the Legislature gave the effort too little money in the end to address the extent of Minnesota’s water problems. Additional funding was appropriated in 2007, though it was still disproportional to the need and far less than the needed $100 million.
However, the efforts of MCEA and other groups in passing the Clean Water, Land and Legacy constitutional amendment in 2008 means that substantial funds are available for the Clean Water Legacy. The members of the G16 and the Clean Water Council will be monitoring the money to make sure it is spent correctly and our rivers and lakes can finally meet the standards of the 1972 Clean Water Act.