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May 2017 ~ More on our Trust Fund…..
Senate OKs Natural Resources Trust Fund Changes
A dispute between the Natural Resources Trust Fund Board and legislators prompted the Senate on Wednesday to pass a bill appropriating $7.7 million to fund 43 projects the board nixed and another bill overhauling how project decisions are made.
Under the legislation, SB 280, the list of projects recommended by the trust fund board would have to be based on the accounting of revenue available and proposed appropriations for public recreation projects would have to equal 25 percent of the prior year’s interest and earnings from the trust fund and 25 percent of additional appropriations.
The bill also requires the board’s list of recommended projects to include the Department of Natural Resources’ scoring of those projects and allows the Legislature to appropriate money from the stabilization account of the trust fund. The bill would limit members of the trust fund board to serving two terms.
SB 76 appropriated the money for the 43 projects.
Sen. Darwin Booher (R-Evart), the bill sponsor, said he questioned why projects that scored sufficiently would not be funded. All 43 projects scored sufficiently, and he questioned why the trust fund would not spend the interest and earnings available.
Mr. Booher said there is a dispute as to whether the Legislature can appropriate funds to projects not recommended by the trust fund and the DNR has requested an opinion from the Department of Attorney General.
Three Republicans – Sen. Rick Jones of Grand Ledge, Sen. Tory Rocca of Sterling Heights and Sen. Wayne Schmidt of Traverse City – joined 11 Democrats in opposition to the bill.
Mr. Booher said the Legislature has decided not to fund projects, so it clearly has the right to add projects.
“This is oil and gas money, it belongs to all the people, so use it out in your local communities. Use it,” he said. “That’s what it’s for, not just building up a fund.”
Booher Bill Unconstitutionally Meddling In Trust Fund Decisions
A bill that opponents say would unconstitutionally insert the Legislature into the Natural Resources Trust Fund (NRTF) project recommendation process won’t be sitting around and collecting dust, according to the chair of the committee it’s sitting in now.
SB 0280 gives the Legislature more power to pick some extra boat ramps, trail bridges and other parks/nature preserve infrastructure projects, which the NRTF pays for through oil and gas revenues. The bill also requires that more proposed projects be funded and that the turn-around completion time be no more than two years at a time when the NRTF is amply funded.
Sen. Dave HILDENBRAND (R-Lowell), chair of the Senate Appropriations Committee, said last week SB 0280 could see a hearing in a few weeks.
Bill sponsor Sen. Darwin BOOHER (R-Evart) said the bill was born out of a number of concerns he’s had with the way the NRTF Board has gone about its business of scoring and selecting public recreation projects to be recommended for funding to the Legislature.
“Why aren’t you doing these local projects that you have in there, that have been scored? Why don’t you do these development projects that you’ve scored but don’t fund?” Booher said he was asking of the NRTF Board.
The NRTF, upon hitting $500 million in the proceeds it receives from the sales and leases of state-owned mineral rights in 2011, has no new revenue coming besides the interest it earns off that $500 million “corpus,” as it’s referred to, said Steve DeBRABANDER, manager of the grants management section at the Michigan Department of Natural Resources (DNR). That previous revenue will now head toward the parks endowment fund.
So DeBrabander said the NRTF Board, assuming interest earned of 5.5 percent each year, developed a spending plan of 2.5 percent, with the difference going toward helping growing the pot of money available over time. But he said the NRTF Board could deviate that spending plan any time it wants.
However, Booher, chair of the Joint Capital Outlay Appropriations Subcommittee, said he found 199 past projects selected and funded by the Legislature had not yet been completed — including one dating back to 2009 that was unfinished. He said of the 70 projects funded last year, only two had been done.
The DNR staff score projects for the NRTF Board, which take those and make recommendations for funding to the Legislature.
Booher said the DNR wouldn’t score requests if they weren’t a quality project, so his bill is allowing lawmakers to add projects for approval and funding that weren’t recommended by the NRTF Board, but were scored by the DNR.
Hildenbrand said there are more applicants than what the Legislature is funding, and there is money to fund more projects.
“What kind of framework should we put in place to . . . fund as many projects as we can?” Hildenbrand said. “There’s more applicants that potentially could be funded, in different ways, and we’re just exploring what those opportunities are.”
SB 0280 also would put a two-year time limit on completing projects, otherwise the money would be returned to the NRTF. “These projects shouldn’t be sitting out there undone,” Booher said.
The DNR opposes the bill. DNR spokesperson Ed GOLDER said the time limit focuses on the exception and would result in local projects being only partially completed. He added that more than 88 percent of NRTF projects that are at least two years old have been completed.
When asked about that, Booher said he was open to discussion on that point.
But that’s among the issues opponents have with the bill, in that what Booher is proposing is legislative interference with the decision-making power of the board, which they say is constitutionally protected.
“The constitution states that the Board ‘shall recommend projects to be funded,'” Golder said in an email. “It does not give authority to the Legislature to recommend projects for funding.”
But Booher said he sees it as the Legislature having the authority to spend, and the NRTF Board to recommend. When proceeds from the sale and lease of state-owned mineral rights reached $500 million, Booher said, “something happened” that caused them to “just store money above that $500 million.”
Booher also took issue with how projects were scored and recommended, above a certain line that he said were dumped in favor of some DNR projects that ended up scoring below that line.
“That’s not right, and that’s not the way it should be done, and so . . . that’s what brought this bill,” he said.
DeBrabander said the NRTF Board sets the criteria for scoring, but still has discretion to deviate from its own criteria in selecting projects, and did so on a few projects this past year for a number of reasons, including funding projects related to the Iron Belle Trail — local or DNR.
Golder said SB 0280 would require an amount equal to 25 percent of NRTF expenditures be awarded to development projects, while the constitution says not more than 25 percent be used for development projects.
In other words, the NRTF would be required to spend up to 25 percent on the development projects, rather than just merely having the option to do so.
Booher is also putting two-year term-limits on NRTF Board members, which includes Bill RUSTEM, who played a big role in getting the NRTF passed in the first place.
Rustem said voters have made it clear that they want the NRTF Board handling the decisions on these public recreation investments, not the Legislature.
He said there’s always be tension between the Legislature and the Executive branches, and disagreement with how decisions are made, but Rustem said he believes the Judiciary branch would strike down the bill as unconstitutional.
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THE MICHIGAN SNOWMOBILE TRAIL PERMIT WILL NOT INCREASE
Many of you have called and voiced your opinion about the possibility of the permit increasing to $60. The Michigan legislature has made it very clear that they have also heard you, and will not increase the permit. So where does the money come from to keep the program working to keep your trails safe and smooth.
MSA went to the Capitol on November 30th and presented our program and the need for additional funding to officials in the governor’s office and members of the legislature.
Our state legislature has put $32 million of our tax dollars to the Pure Michigan tourism campaign. These tax dollars are being used to promote tourism in our state. State officials say that they are doing this because of the campaign’s ROI (Return of Investment) of those tax dollars. Statistics from Pure Michigan show that for every $1 spent promoting Michigan through Pure Michigan, $7 comes back to the state in terms of goods and services purchased.
We presented these facts. Out of their own pockets snowmobilers purchase trail permits to fund the snowmobile program. That number is nearly $6 million. The snowmobile program also receives another $2 million from a small return of YOUR gasoline tax. YOU paid this tax. This means that snowmobilers pay $8 million to self-fund the snowmobile program. WE pay to play.
Let’s now take what snowmobilers pay out of pocket and divide that $8 million number into snowmobiling’s economic impact on this state — $500 million.
The ROI this state receives on YOUR investment is $62.50 for every $1 YOU the snowmobiler puts into YOUR sport.
So, for every tax $1 spent by YOU on Pure Michigan, the state sees a ROI of $7. The ROI the state realizes on every dollar YOU the snowmobiler spends is $62.50. The state funds Pure Michigan because it sees an average $7 ROI of every dollar spent, and snowmobiling provides a $62.50 ROI for every dollar WE spend.
Using this analogy of ROI, isn’t it about time that the state puts some tourism dollars into the snowmobile program?
So, with that question we were tasked to back up our needs. That’s where the 10-year budget that MSA and the DNR has just completed came in. We will be able to show them our projections and the needs for the future. We are busy completing the needs for maintenance of bridges and the need for new bridges, culverts and other projects for the maintenance of our trails. We already know the need for equipment replacements, so hopefully with this information the legislature will see the need to invest in a solid ROI for the Michigan Snowmobile Program. Stay tuned the new legislature will start working on the state budget right after the Governor’s office presents his budget requests for the 2017/2018 fiscal year. Stay Tuned!
TODAY IS THE DAY TO JOIN!
Call in! 616/361-2285 Mail In! 4543 Division Ave S Wyoming Mi 49548 or Join on the website at www.msasnow.org
25.00 gets you a 1yr membership to MSA!
GIVE US A TRY! SEE THE GOOD THINGS WE CAN DO TOGETHER!
You can find more of our history at The history of MSA
Ed Klim talks about FOSPAC! (Friends of Snowmobiling Political Action Committee)