Minnesota lawmakers are making progress toward approving a ballot query in 2024 that may let voters resolve whether to increase using lottery money for environmental projects.

But some major changes proposed by Democrats to the Environment and Natural Resources Trust Fund — that may have resulted in extra money for the account — won’t be a part of the constitutional amendment before voters in spite of everything. 

On Wednesday, House and Senate lawmakers removed a provision that may have dedicated an additional 10% of net lottery proceeds to the environmental trust fund. And in addition they nixed a possible change in state law that may direct money from unclaimed lottery prizes to the trust fund. Combined, the cash would have added roughly $20 million annually to the account, which received $44.3 million from the lottery in 2022.

“I appreciate the chance to be here today and to strip out all the cash from my bill,” state Rep. Athena Hollins, DFL-St. Paul, told the House Ways and Means Committee with lighthearted sarcasm. “Hopefully this will likely be the least painful thing you could have to do today.”

The trust fund was first authorized together with a state lottery in 1988. The cash is doled out by lawmakers, but they get recommendations from a 17-member council. This yr, the Legislative-Citizen Commission on Minnesota Resources really helpful 85 projects with a complete $79.8 million price tag.

But a link between the lottery and the trust fund is about to run out, motivating legislators to place an extension before voters in 2024. The Minnesota Structure says 40% of lottery proceeds must go to the trust fund until 2025. Right away, 60% of lottery proceeds flow into the state’s general fund, which is the principal pot of cash used to pay for state services like education, health care and more.

Hollins and Sen. Foung Hawj, DFL-St. Paul, sponsored the proposal for a brand new constitutional amendment. And so they initially wanted extra cash for the trust fund. 

Under their first plan, the structure would have as an alternative dedicated 50% of lottery money for the environmental account if the ballot query was approved by voters. And the DFL proposal also would have modified state law to direct unclaimed lottery prizes into the trust fund somewhat than the overall fund. 

The additional money would grow the scale of the fund, helping to pay for a brand new “community grants” program aimed at helping smaller nonprofits access the cash, especially groups that seek to assist people of color or low-income rural areas. 

But that plan hit a roadblock. Taking away general fund money would mean less money to make use of on other priorities. Hollins said DFL leadership couldn’t agree where that additional money for the trust fund would come from.

“Thanks, Rep. Hollins, for staying inside our budget parameters,” said Rep. Liz Olson, a Duluth DFLer who chairs the House Ways and Means Committee.

Now, the proposal to increase lottery funding for the trust fund incorporates the present limit of 40% of proceeds earmarked for the environmental account.

Hollins and Fawj are still proposing some changes to the trust fund. One is allowing a greater share of the fund for use annually. Currently 5.5% may be drawn from the account, which is invested by state officials to grow the money. However the DFL bill would allow state officials to make use of a further 1.5% of the trust fund yearly to pay for the community grants program. That will leave less to be handled by the State Board of Investment.

Money earmarked for community grants can be approved by the Walz administration on the recommendation of a brand new advisory council, somewhat than legislators, which drew frustration from Republican lawmakers in a Senate committee hearing on Wednesday. The GOP has also objected to a DFL plan to dam using trust fund money for upgrading wastewater treatment facilities or for paying the principal or interest of any bonds used to finance infrastructure projects.

But DFLers hold majorities within the House and Senate and have advanced the laws this week, moving it closer to floor votes. Democrats can also still alter the council that makes recommendations on projects.