FACT: Proposal 1 continues the critical work of the Michigan Natural Resources Trust Fund (MNRTF). For decades, the Michigan Natural Resources Trust Fund has been protecting our drinking water sources, wildlife habitats and outdoor spaces by receiving oil and gas royalties and directing them towards land acquisition and public recreation projects in all 83 counties across Michigan. This November 3rd, Michigan voters have a historic opportunity to update and expand the Michigan Natural Resources Trust Fund so that it can continue supporting the places that make Michigan unique – from Great Lakes beaches and public lands to our trails, paths, parks and playgrounds.
FACT: The Michigan Natural Resources Trust Fund does not spend taxpayer dollars. It has been funded by the royalties that oil, gas and mining industries are required to pay on the minerals they extract from public land. The Michigan Natural Resources Trust Fund ensures that those dollars go right back into our natural resources and beautiful outdoor spaces.
FACT: Prop 1 lifts the cap on the Michigan Natural Resources Trust Fund, committing this revenue stream to conservation forever. The MNRTF reached its cap in 2011 and has not been able to receive new royalties since then. The Constitution currently dictates that all new royalties must go to the State Park Endowment Fund (SPEF) until the SPEF reaches its $800,000,000 cap. Once that cap is reached, all new royalties “shall be distributed as provided by law,” which currently means the dollars would go to the general fund to be spent by the legislature on anything and no longer to a Constitutionally protected fund for conservation and recreation.
Prop 1 maintains that these royalties will continue going to the SPEF until it reaches it $800,000,00 cap (as is currently constitutionally required – no change here), and once the SPEF cap is reached, the MNRTF cap will be lifted and these royalties will be directed back to the MNRTF instead of the general fund (THIS is the change).
FACT: We don’t know when the State Park Endowment Fund will reach its cap, but it could be sooner than expected. We can’t know for sure how the volume or price of oil, gas and minerals will change, and as a result it’s impossible to accurately predict how long it will take for the SPEF to reach its cap. For example, in the 2007 – 2009 period there was a significant spike in energy prices leading to both a higher bid price for mineral leases and increased royalty income because royalties are based on a percentage of the price received for the mineral at the time of sale. As a result, the MNRTF reached its cap in a couple years when projections prior to the price spike had been 15 to 20 years.
We cannot know for certain when the SPEF will reach its cap, but it is critical that we act to proactively ensure that these royalties, regardless of how much they amount to or when the SPEF cap is reached, continue to be reinvested in our natural resources, conservation and recreation for future generations.
FACT: Prop 1 maintains the level of Michigan Natural Resources Trust Fund funding committed to land acquisition. The Constitution currently requires no less than 25% of available MNRTF funds to go to land acquisition. This has been the case since the MNRTF was put in the Constitution in 1984 and would remain the same should Prop 1 pass.
As is, there is nothing stopping the MNRTF board from recommending exactly 25% go to land acquisition and the remaining 75% to fund administration and payments in lieu of taxes on land acquired. If passed, Prop 1 will require at least 25% go towards land acquisition (as is currently the case) and at least 25% go towards recreation (changing it from maximum of 25% to minimum of 25%), doubling the annual expenditures guaranteed to fund protection of and access to our natural spaces.
FACT: Prop 1 will ensure the Fund invests in access to our outdoors for all Michiganders. Currently, spending on public recreation is capped at 25%. This includes projects like trails, parks, green space in our cities, redeveloping our urban riverfronts, and much more. Prop 1 will for the first time allow redevelopment of existing public recreational facilities, which is often a more cost-effective way to provide public access than building new facilities. It will also require at least 25%, instead of at most 25%, of available funds be spent on these public recreation purposes. These changes will allow us to increase access to our outdoors spaces in our urban centers and across the state.
FACT: Prop 1 does not determine whether or not our state allows drilling for oil, gas and other minerals on state-owned land, and does not increase our budgetary reliance upon this drilling. It simply determines how the royalties that result from any such drilling can be spent.
The Trust Fund reinvests what royalties the state receives from our finite oil and gas resources into one-time investments in our public lands. These investments include acquiring and protecting more public lands and increasing access to these lands for all Michiganders, not ongoing maintenance and operation costs.
Further, Proposal 1 prevents these royalties from going into the state’s general fund once the State Park Endowment Fund cap is reached. Any dollars in the general fund can be directed at the will of the legislature. The pressure to maintain or increase this revenue stream will be magnitudes greater if the legislature is able to use it to fulfill campaign promises or attempt to patch ever-growing budget holes. Passing Proposal 1 avoids this fate by renewing our commitment to reinvest royalties received from our natural resources back into our natural resources.
FACT: Proposal 1 is supported by a broad, bipartisan range of organizations and leaders, including over 30 environmental and conservation organizations. You can see our full list of endorsers here!
Proposal 1 was put on the ballot with a unanimous vote by the legislature. All five living past and present Michigan governors, representing both parties, recently published a letter endorsing the proposal. It has the support of the conservation community (check out this letter signed by 12 land conservation leaders from across the state!), the business community, civic and community leaders, and more. In such a partisan and divided time, Proposal 1 is our opportunity to come together and celebrate what we can all agree on: Michigan is a beautiful, special place, and it is up to us to keep it that way.