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Conservation groups suing state over use of environment fund

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A coalition of eight conservation groups has served notice that they plan to sue the state of Minnesota for using the Environment and Natural Resources Trust Fund to finance infrastructure projects.

The groups include the Minnesota Environmental Partnership, Friends of the Mississippi River, the Izaak Walton League of Minnesota, the Minnesota Outdoor Heritage Alliance and others.  

They are challenging the Legislature's action earlier this year to tap the fund to pay interest on $98 million in bonds for sewer improvements and other projects.

"Although there have been some inappropriate uses of the fund in the past, this is the most flagrant violation of the constitution that we've really seen, and really crosses the line into where we feel litigation is necessary to try to get this ship back on course," said Steve Morse, executive director of the Minnesota Environmental Partnership. 

The Environment and Natural Resources Trust Fund was approved by voters in three constitutional amendments over three decades. It receives lottery dollars every year for "protection, conservation, preservation, and enhancement of the state's air, water, land, fish, wildlife, and other natural resources."

At the end of this year's session, the Legislature passed a law allowing Minnesota Management and Budget to issue up to $98 million in appropriation bonds to pay for sewer improvements, lake dredging and other infrastructure projects.

The Legislature directed MMB to pay the annual debt service on the bonds from the Environment and Natural Resources Trust Fund, which the conservation groups say violates the state constitution.

Morse said the move set a dangerous precedent. He said it's also more expensive because of the higher interest rates on appropriation bonds. 

"We support the projects," Morse said. "But they're irresponsibly financed, more than double the cost and unconstitutional."

Instead, the Legislature should pass a bonding bill next year that finances the projects through general obligation bonds, Morse said.

Myron Frans, MMB commissioner, emailed a statement in response to the lawsuit that said his office will carefully review the complaint "and assess our next steps." The attorney general's office will represent MMB, Frans said.