Arts, outdoors projects to be delayed due to low sales tax receipts

Now the Minnesota economy is having a say on how quickly the money flows into state coffers to pay for such things.

The three-eighths of 1 percent increase to the sales tax went into effect July 1.

Minnesota Management and Budget (MMB) Department executive budget officer Mike Salzwedel on Tuesday told a state House committee that the 2010 receipts are expected to be down 5 percent, or $8.7 million, from projections used during the most recent legislative session. The new revenue numbers were tabulated Aug. 10.

Rep. Mary Murphy, DFL-Hermantown, chair of the Cultural and Outdoor Resources Finance Division, said the downturn in sales tax receipts could delay the date on which money lands in the four funds that have been created to hold the new dedicated dollars. But she didn’t think the problem would be permanent.

“If it’s a problem, it will be short term,” Murphy said.

During the 2009 legislative session, which ended seven months after voters approved the so-called Legacy amendment, lawmakers expected $234 million to be collected from sales tax revenues for Legacy projects. The money goes into four funds – for projects dealing with clean water, parks and trails, habitat, and the arts and culture.

Lawmakers appropriated 91 percent of the expected $234 million, meaning the Legislature appropriated a total of $212.9 million for Legacy projects in 2010.

To get projects going before the money arrives, MMB has already borrowed $9 million from the state’s general fund. The $9 million will be repaid before the 2010-2011 biennium ends.

“We would have to return these monies in a timely fashion … It’s not intended to be any sort of long-term advance,” Salzwedel said.

As a way to manage the deteriorating revenue situation for the four dedicated funds, Salzwedel said MMB will revisit state agencies’ spending plans.

State Arts Board Executive Director Sue Gens said MMB has asked her office to delay the date on which it awards grants, adding that Arts Board officials will use the delay that’s expected to be two to three months to focus on the priorities for which the grants are to be used.

Gens said she has held 12 public forums around the state to gather ideas about the funding now available for the arts. At these forums, arts groups said they need the Legacy financial support to help them get through the difficult economic environment, according to Gens.

Art-related groups are even inquiring about whether they can seek Legacy money for capital costs, which is not a part of the criteria for the new sales tax dollars.

“We are going to be smart about it, and as careful as we can [be],” Gens said.

Tuesday’s hearing featured presentations by state agencies about the state of their appropriations.

Minnesota Department of Natural Resources (DNR) Deputy Director of Parks and Trails Forrest Boe said that the DNR expects a total of $12 billion to be collected from all sources of funding in the next 25 years for parks and trails, including $1.2 billion in Legacy money.

“It’s a significant amount that will supplement current spending,” Boe said.

The members of the House panel also heard from an assortment of citizens who said their preferences aren’t getting any attention from lawmakers.

Edward Cohen, who does professional lighting for movies, said lawmakers should steer some of the Legacy money toward motion pictures made in Minnesota.

“My feeling is that films are part of Minnesota’s cultural heritage,” Cohen said.

Jann Carr, who advocates for dog parks in the Twin Cities, said the DNR isn’t willing to use the money to create areas in state parks where dogs can run off-leash. He said he was disappointed that a bill sponsored by Rep. Rick Hanson, DFL-South St. Paul, which would have created a regional and matching grant program for dog parks in the Twin Cities area, didn’t advance in the 2009 legislative session.

Courtland Nelson, director of the DNR’s Parks and Trails Division, said the agency has formed a steering committee that is soliciting public input on Legacy funding for parks and trails. He said the steering group can consider dog parks.

“It’s obviously something people have great passion around,” Nelson said.

Legacy money for 2010

Amount of Legacy revenue projected to be collected for 2010: $234 million

Amount of money appropriated for 2010 Legacy projects: $212.9 million

Amount of decline in Legacy revenue projected to be collected in 2010: $8.7 million

Source: Minnesota Management and Budget