Land Management Concerns for the Minnesota Department of Natural Resources

The Minnesota Department of Natural Resources (MN DNR) owns approximately 11% (5,545,850 acres) of Minnesota’s 51 million acres. Long-term goals of the MN DNR have called for an aggressive expansion of land holdings. But there is some question if the MN DNR can even manage it’s existing land holdings. Additionally, in counties with large MN DNR holdings, there is resentment among local governments as properties are removed from the tax rolls once they taken over by the state. The MN DNR is feeling the tension between their mission to acquire new lands for preservation and their ongoing land management needs.

Resentment Among Local Governments
The DNR has run into local opposition when it comes to land acquisition. The MN DNRs holdings are not evenly distributed throughout the state. As the Office of the Legislative Auditor (OLA) notes, “In Cook and Lake counties … over 80 percent of the total land is publicly owned.” As this map illustrates, the distribution of MN DNR land is skewed to the northern and eastern regions of the state.

One issue surrounding MN DNR ownership of land is the concept of Payment In Lieu of Taxes (PILT). Land owned by the state is exempt from paying local property taxes. Whenever the MN DNR acquires a property, it removes a tax-paying parcel from the local property tax rolls. To compensate local governments, the MN DNR provides them a dollar amount comparable to lost tax revenues known as PILT. Not surprisingly, the fairness and adequacy of these PILT payments sitr up tensions between local and state governments. In spite of these tensions, the OLA found PILT “would have exceeded county and town tax revenues had the private owner kept the property”

Stretched Too Thin?
But the OLA and the MN DNR disagree on other aspects of the MN DNR’s land acquisition practices. As the OLA points out, the “DNR’s long-range plans include significant additions to the agency’s current land portfolio.” The OLA questions these plans noting the “DNR appears to lack adequate resources to manage and maintain existing land holdings.”

In response to the OLA’s cricisms the MN DNR created a 10-year budget analysis (PDF) of its land management needs. Unfortunately for the MN DNR, their analysis found land management shortfall of $19 million. If the MN DNR follows it aggressive acquisition plans, that gap expands to $84 million.

In its defense, the MN DNR’s land holdings have only risen 5% over the last two decades. Part of the problem stem from the state’s relentless budget shortfalls, which have slowly defunded (PDF) the MN DNR. Nearly 25% of the MN DNR’s general fund budget ($45 million) has been cut since 2002. The DNR’s mission, in their minds, may not offer room for compromise and may override current budgetary shortfalls. The MN DNR remains defiant noting that “Even during times of declining budgets and shifting policy directives, DNR will not turn away from our conservation mission, and land acquisition is an important strategy in achieving this mission”