Many of Minnesota’s 15 fish hatcheries were built in the 1950s and still run with original equipment. And while they’re critical to stocking lakes and rivers so anglers can catch fish around the state, the Department of Natural Resources and outdoors advocates say the hatcheries are outdated.

“They’re old and are in need of major renovation, or complete rebuilding,” said Mark Holsten, executive director of the advocacy nonprofit MN-Fish. 

That’s one reason why the DNR has asked the Legislature this year for a major influx of money, aimed in part at modernizing and revitalizing aging infrastructure like hatcheries, fishing piers, campsites, boat landings, parks and trails. More controversially, state officials also want to increase fees for things like park permits and fishing licenses to help pay for ongoing costs like extra staffing, maintenance and even basic needs like rising employee salaries.

It’s an idea that has drawn opposition from Republicans and even some Democrats at the Capitol, causing a stir about the prospect of higher costs when Minnesota has a colossal $17.5 billion surplus.

Whether DFLers who control the Legislature approve those new fees or not, lawmakers are very likely to spend heavily on the DNR as part of a massive environment and natural resources budget now making its way through the Legislature that covers the work of several state agencies.

Top Democrats allowed the House and Senate environmental committees to spend an extra $670 million from the state’s general fund in the two-year budget. That’s an unusually high amount for environmental issues, made possible by that huge surplus. And the total new spending could end up even higher when accounting for other revenue sources.

Bob Meier, an assistant commissioner at DNR, said the budget plan is the “largest we’ll ever see.” “I think a couple years ago they had a $19 million target,” Meier said. “This year it’s $670 million. You will never see that ever again … Historically we’re battling for the crumbs.”

The DNR’s request for new funding — and new fees  The DNR’s multi-pronged budget request stems from the agency’s unusual funding. Only a quarter of the DNR budget comes from the state’s general fund, which is the main pot of taxpayer money from things like income taxes that feed state spending. The rest of the DNR’s finances come from a mix of other sources.

Primarily, the DNR makes money through user fees — things like park permits, fishing and hunting licenses and boat registrations. So even as the state reports an eye-popping, record-smashing surplus, the DNR’s budget picture is separate, and in some areas, in trouble.

Yes, the agency does want a bigger slice of the state’s general fund to be less reliant on fees that can be more volatile if, say, there’s declining interest in deer hunting. But that’s not so easy at the moment because much of the enormous surplus is only available now and won’t continue on for years and budgets to come. That’s why the DNR has asked for a chunk of change for short-term initiatives and new fee increases that will supply cash in the years ahead.

For example, during a February hearing, DNR commissioner Sarah Strommen told lawmakers about her request for $35 million from the general fund to help modernize hatcheries, shore-fishing sites and piers. Holsten said many of those piers are in shambles, and he said upgrading hatcheries can help deal with newer problems like aquatic invasive species.

But the agency also wants a 20% increase in the price of a fishing license for Minnesota residents, and a 31% hike for non-resident licenses.

“The ongoing revenue generated by the fee increase would actually pay for management of those fisheries resources, the staff, our fisheries expertise, to collect data, analyze that data and make management decisions that benefit fish populations,” Strommen said.

In total, the DNR’s full request to lawmakers is broad in scope and includes about $287 million in new state spending. For context, the agency’s most recent two-year budget was $1.3 billion. T

he DNR also wants hundreds of millions more for infrastructure projects funded through government borrowing. Altogether, the money includes initiatives to modernize and upgrade state park roads, buildings and trails, camping infrastructure, boating access, fisheries, streams and water-related infrastructure like culverts and more. (Whether lawmakers will approve a bonding bill or cash for state infrastructure projects is in limbo because of a separate fight about tax cuts.)

There are six fees that DNR asked to increase. Two of those fees are levied on businesses like utility companies and golf courses. Four fall on recreation:

Parks: Among the increases, a daily vehicle permit would rise from $7 to $10, and an annual pass would go up from $35 to $45.

Fishing: A resident fishing license would jump from $25 to $30 and non-resident licenses would increase from $51 to $67.

Boats: A surcharge on boats for aquatic invasive species work would rise from $10.60 to $20.

Watercraft registrations: These registrations, which last for three years, would rise between 78% and 143% depending on the size of the boat. The current registration fee for a motorboat between 17 ft and 19 feet is $27, and the fee would increase to $59.

While a decline in deer hunting and fishing has led the DNR to question its funding sources in recent years, the agency isn’t suffering from a lack of demand for licenses in every case. State budget documents say visitors have spiked at state parks, especially in the first two years of the COVID-19 pandemic. That leads to more revenue, but also a greater impact on park infrastructure and more need for services.

The agency says it would use money from more expensive park passes in part to expand visitor services in spring and fall, seasons when the number of visitors now rivals summertime.

“High visitation is becoming year-round, yet staffing levels have remained relatively the same,” the budget documents say.

The DNR also asked for money for other initiatives, including money to help reforestation efforts in areas impacted by emerald ash borer and extra cash for managing chronic wasting disease in deer. A huge chunk of change — nearly $90 million in the two-year budget from the general fund and other revenue sources like fees — would also simply pay for maintaining “current levels of service,” which includes things like higher costs for gasoline, employee salaries and benefits, septic systems and garbage removal.

A divide over increased fees

Some DFLers have stood by the idea of fee increases, even with Minnesota’s large surplus. The environmental budget plan released by House Democrats included every fee increase, which together would raise about $30.4 million in the next two years.

State Rep. Rick Hansen, a South St. Paul Democrat who chairs the House Environment and Natural Resources Finance and Policy Committee, said he doesn’t want to raise fees. But during a recent hearing, Hansen said they’re necessary when Democrats want to spend heavily on a wide range of environmental priorities while still making sure the state is paying government employees who make the agency work.

And Hansen accused Republicans of not agreeing to enough environmental spending when the GOP used to control the Senate.

“We’re putting it into things that were blocked for four years,” Hansen said of the general fund spending. “Comprehensive chronic wasting disease reform. Comprehensive emerald ash borer, comprehensive aquatic invasive species. All of those things we’re investing in.” 

Nevertheless, the plans for increased fees have drawn opposition from Republicans. State Rep. Josh Heintzeman of Nisswa, the top Republican on the House environmental committee, said the impact from higher fees would be felt across the state and aren’t necessary when lawmakers can simply offset them with part of the budget surplus.

“Is there a dollar amount that could put a fee increase off another biennium or two and keep the agency functioning at a high level?” Heintzeman asked at the hearing. “Maybe that’s not possible, but I’m guessing that it probably is.”

The GOP has little power to change the DFL agenda since they are in the political minority in the House and Senate. But the Senate’s environmental budget plan, written by Democrats, did not include any of the fee increases.

Hansen’s counterpart, Sen. Foung Hawj, DFL-St. Paul, said the lack of fees helped make the legislation fiscally responsible. Meier said the plan did not backfill those fees with other money, leaving the agency short of its goals.

State Sen. Grant Hauschild One Democrat, Sen. Grant Hauschild of Hermantown, told MinnPost that a few DFLers expressed concerns about the fees, including him. With such a large surplus, he said legislators can fund their priorities without putting costs on “the shoulders of outdoor recreationists.”

Hauschild said he represents one of the most outdoors-heavy districts in the state.

“In this moment, where we’re at, I think we can fund the necessary needs that we have,” Hauschild said. “We’ve done the fish hatcheries, we’ve done the public water accesses, we’re funding trails and state parks.”

The DFL has a one-vote majority in the Senate, meaning any Democrat can block legislation if it gets zero Republican support. Still, Hauschild said he’s open to discussions on what the right level is for fees in the future, and wouldn’t commit to voting against a hypothetical final bill negotiated between the House and Senate that includes fee increases.

“The reason is because I don’t know what else would be in there,” he said.

That means, at least for now, the fee increases aren’t necessarily dead. Strommen, in February, said some fees hadn’t been raised in about two decades and so a steeper hike in some areas was warranted to make up for lost time and inflation. Other fee spikes were more incremental, like an extra $5 for a Minnesota resident fishing license.

“Less than the cost of one average fishing lure, you get access to our incredible fishing opportunities in Minnesota,” Strommen said.

Historic environmental budget ahead While lawmakers may still be sorting out the fees question, and debates over other natural resources policy, the House and Senate both agree on funding big parts of the DNR’s plans and a sweeping environmental budget.

Other shared priorities include $17 to $20 million for a “ReLeaf” program aimed at reforestation from emerald ash borer and $40 to $173 million for a climate-related water infrastructure initiative run by the Minnesota Pollution Control Agency. The bills also include major policies like a ban on new permits for deer farms, which most Republicans have opposed but Democrats appear to support.

Soon the House and Senate leaders will begin negotiating over a final bill that can pass the Legislature and reach the desk of Gov. Tim Walz.

“Last year we were talking about $10 million,” Hansen said. “This year it’s $670 million, the largest ever. What an opportunity, but it isn’t going to last forever.”  

Walker Orenstein writes for the Minnesota Post.