LANSING, Mich.—Legislation introduced in the state Senate last week would restructure how revenue is spent that is presently collected from the extraction of oil, gas, and minerals on state-owned land that has gone to the Michigan Natural Resources Trust Fund for decades for primarily the purchase of state land.
Sponsor Sen. Tom Casperson said the measures are designed to reprioritize use of the revenues to help boost recreation and economic opportunities. The legislation would apply these natural resource-related revenues to certain natural resource-based recreation and infrastructure purposes other than land purchases, as Michigan already has a greater percentage of its land area owned by the state than any other state east of the Mississippi.
“I am seeking to put before state legislators and then the state’s voters the question of whether or not it is a wise use of these revenues for the main purpose of the state acquiring more land or whether, alternatively, there should be a limited redirection of the funds for improved management of natural resources and to capitalize on the potential that land-based industries offer to the Upper Peninsula and all of Michigan,” said Casperson, R-Escanaba.
For several decades, lease and royalty revenue collected by the state has been deposited into the trust fund, which reached its cap of $500 million last summer. Having met that cap, Casperson said the balance in the trust fund now amounts to more than 10 percent of the state’s entire general fund and will yield roughly $25 million in interest per year.
“Part of this proposal will also ensure that the state is not a tax-defaulting landowner. Many of our local governments are struggling to provide services to residents, and the state needs to be responsible and trustworthy in making regular payments based on the amount of land it has taken out of each local property tax base,” said Casperson.
Senate Bill 822 and Senate Joint Resolution Q would change the Michigan Constitution and state law so that no more than 25 percent of available royalty and lease revenue could be spent on land purchases. The bills would also specify that a designated portion of the annual earnings would go towards the state’s parks. The remaining revenues could then be directed to the following:
- Management of land and water resources for recreational purposes;
- Development and maintenance of trails and roads on state-owned land;
- Infrastructure related to roads where natural resource based industries, including timber harvest or mining, occur;
- Infrastructure on waterways, including breakwaters and dredging operations;
- Payments in lieu of taxes on all state-owned lands;
- Acquisition of land or rights in land for recreational uses or protection of the land; and
- Development of public recreation facilities.
To ensure the expanded use of the revenues is narrow, strategic and relevant to the trust fund’s natural resource related purpose, stakeholders were consulted for their input and expertise. However, the lawmaker anticipates pushback from a few extreme environmental groups.
“Special interests have treated the trust fund as their own money in their zeal for the state to buy more and more land, especially to add to the state’s vast holdings in the U.P.,” said Casperson.
SJR Q would require approval by the Legislature before it would go to the ballot to be considered by voters. The bills were referred to the Senate Natural Resources, Environment and Great Lakes Committee for consideration.