Michigan Natural Resources Trust Fund again targeted by legislature

Chris Bunch

Chris Bunch is executive director of the Six Rivers Land Conservancy, which protects, sustains and connect natural areas, lands and waters in southeast Michigan.

Given the conservative financial principles that have been enacted to manage the Michigan Natural Resources Trust Fund, the Senate’s latest efforts to override the judgment and recommendations of the MNRTF board are baffling.

SB76 is the appropriation bill that will fund grants awarded by the MNRTF board in December last year. Sen. Darwin Booher has attached an amendment to it that will use MNRTF reserve funds to fund an additional $7.7 million worth of projects that were not recommended by the MNRTF board. He has also introduced SB280, which will cut the authority of the MNRTF board, undermine the well-considered steps they have taken to maintain the long-term viability of the MNRTF, and insert legislative influence into what has been a very effective, objective process.

The state’s Natural Resources Trust Fund uses royalties paid on oil, gas and mineral extraction to buy and develop lands for public use. Since the fund reached its constitutionally established cap on revenues to the fund from those royalties, it now effectively takes the form of an endowment. The fund’s board has engaged in evaluation and adjustment of its policies, procedures and actions to ensure the fund retains its buying power to benefit future generations. These steps ensure inflation and obligatory expenses will not erode the MNRTF and reduce its capacity to meet its established mission. 

SB76 flies directly in the face of the spending and reinvestment policies that are in place, dipping into reserves for projects that did not score high enough in the ranking system to be funded in the first place.

SB280 is even worse. It contains a provision that would limit the DNR’s ability to seek other funding sources (such as federal and private) for acquisitions they are pursuing, meaning they would need to use MNRTF dollars first. Not only does this reduce their ability to bring other funds back to Michigan, it will also increase competition with local governments and parks, which also use MNRTF funds. Then there is a provision that effectively creates a shell game, allowing trust-fund monies to be used to acquire land that is already owned by the public for recreational purposes. This is a roundabout way to raid the MNRTF, allowing a community to sell recreational land to another agency and use the dollars received for other purposes. The bad provisions in this legislation are too numerous to list, and it is likely that both this and the amendment to SB76 are unconstitutional.

And once again, at the behest of Sen. Booher, the Michigan legislature has delayed their obligation to make the appropriation for the grants awarded last December by the MNRTF board. This means landowners who have agreements to sell must continue to wait to see if the legislature will meet their obligation; that funds awarded for recreational development grants are also held up, wasting valuable time as the construction season gets underway, and ultimately that these dollars are not being reinvested in local economies but instead languishing in the State’s hands while politics play out. 

The fund’s review process has been public and open to input from interested parties. The board has established spending and reinvestment policies, created a financial reserve and sought and received guidance from the Attorney General’s office that they have the authority and responsibility to take these actions.

The management strategy they have adopted will ensure investment income from the fund principle will allow for grant-making long into the future. The proposed legislative interventions will reduce returns to the principle and create more volatility for those considering applying.  

Stakeholders participating in the review process, which include Michigan communities and parks systems and those who receive MNRTF funding, understand that they are accepting near-term limitations on available funding to ensure long-term viability of the resource. They know that the days of major increases in available funds due to windfalls from increases in oil and gas activity and royalty revenue are over. They recognize the necessity of shifting to a conservative management strategy like those followed by foundations and endowments, rather than the more lavish approach that was possible when the MNRTF could count on additional revenue. 

Following these principles over the last couple of years, the MNRTF has been able to increase both spending and reserves. Due to the success of the fund managers and the MNRTF board’s policies, they have been able to spend more in grants each year than the limits they set, while still increasing the reserve. This has been a pleasant boon to applicants, tempering expectations at the beginning of grant cycles and then being able to exceed them, rather than creating unrealistic expectations and then disappointing many. The results support the wisdom of the approach.

The MNRTF has been a huge benefit to Michigan’s communities, citizens and economy, investing over $1 billion in recreational resources that has been returned many times over.  Twice now, Michigan citizens have recognized the importance and value of this resource and voted to protect it in the State’s constitution to ensure it is immune from raids and insulated from political meddling. 

The MNRTF functions well -- it is one of the few institutions that has withstood the test of time. There is nothing that needs fixing. Sen. Booher and the legislature need to do their part, and need to make the appropriation as they are directed to do.  

Bridge welcomes guest columns from a diverse range of people on issues relating to Michigan and its future. The views and assertions of these writers do not necessarily reflect those of Bridge or The Center for Michigan.

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Comments

Zeke
Sun, 04/30/2017 - 5:00am

Just another weaselly republican illicit ploy to glam money working properly for the common good of all Michigander's.
You know your efforts are wrong and yet you are trying to play God with our future.
Why is that?

Le Roy G. Barnett
Sun, 04/30/2017 - 11:14am

I now understand the derivation of the first half of the senator's surname. It comes from that fact that his ideas are so scary.

Robyn Tonkin
Sun, 04/30/2017 - 11:33am

There is absolutely no mystery about why the legislators want to manipulate this fund. It is because it is money that they can get their hands on. Mr. Booher must have a constituent he wants to please. He must not like not being able to dictate that this money be used to please his donors.
People in government today are always looking for funds to raid. My husband is a federal annuitant, and we have to put up with the federal govt. dipping into the Civil Service Retirement Fund, and the Thrift Savings Fund, taking monies that they do not replace. The TSP that we have is Uniformed Services--no govt. matching funds--just our own savings. So essentially, we are having our savings stolen. We paid a lot of money into CSRS during his worklife, and it was invested wisely for us. Now we get to watch this money being taken for uses that have nothing to do with its intended, chartered, purposes, without any say in the matter. I hope this does not happen to the Natural Resources Fund. It has done good things for the people of the western UP.

Patricia Cooney
Sun, 04/30/2017 - 11:52am

Is there nothing constructive this legislature can think up? SB76 and SB280 are yet another attempt to divert funds from the protection of our natural areas for the enjoyment of all Michigan residents to other [as yet unseen] programs which benefit a few, but not all of us. Leave the Trust Fund as it was set up, and also keep the full authority of the Michigan Natural Resources Trust Fund Board intact as overseer of the Trust Fund projects.

Charlene
Sun, 04/30/2017 - 12:31pm

Darwin Booher is MY State Senator, and I contacted him via his website this morning. I've also shared the information with my Facebook friends who reside in his district. Thank you (and Bridge) very much for bringing this to my attention.

By the way, anyone who lives in the following Michigan counties is also one of his constituents.
Benzie County
Crawford County
Kalkaska County
Lake County
Leelanau County
Manistee County
Mason County
Missaukee County
Ogemaw County
Osceola County
Roscommon County
Wexford County

Ken Kolk
Sun, 04/30/2017 - 1:03pm

This Spring Michigan Radio and others found out that Nestle and other water bottlers pay nearly nothing to bottle Michigan's waters and ship them out of the Great Lakes Watershed! It is high time that "water" be declared a mineral and that these bottlers be required to pay the Natural Resources Trust Fund royalties and extraction fees as do the oil, gas, and mining companies right now.

Chuck Jordan
Sun, 04/30/2017 - 3:37pm

Reading the Bridge can sometimes be downright depressing. Who elects these congresspeople?

Mary Fox
Mon, 05/01/2017 - 7:04pm

Gerrymandering works

Amanda
Mon, 05/01/2017 - 1:03pm

This is outrageous. Everyone should contact their senator and let them know that we won't stand for this.

D Dailey
Mon, 05/01/2017 - 2:21pm

This bill is another GOP effort to further weaken MI. public land's. In 2012 Snyder signed into law Mi Land Cap, this law prevents MI from "acquiring" more than the present total of 4.625 million acres of state land with a few narrowly defined exceptions!
This cap was passed before the GOP platform was formally adopted that intends to transfer National Forest's to residing states control! Mi has 4 National Forest's, should GOP platform be implemented per their mandate our newly "acquired" 2.7 million acres of national forest given to states MUST be sold within six months. This Land Cap was introduced by Tom Casperson of the Upper Penninsula in the summer of 2011. Oh yea, coincidence maybe that Romney's platform was to transfer public lands to state control!
Check these facts, it's all on the internet!

Mark W.
Wed, 05/03/2017 - 9:39am

The state does not need to own anymore land. The land should be owned and controlled by people, for people. NOT BY GOVERNMENT.

Laura C.
Thu, 05/04/2017 - 6:28am

This argument makes no sense.

We elect the government - or we don't elect it. The government is us (if we pay attention).

Do you think a private landowner is going to let other people in Michigan use their land?

Thank you, Bridge, for helping us to pay attention.