Why We Endorse Proposal 1

• The Michigan Naturals Resources Trust Fund (MNRTF) is a major funding source for acquiring land for conservation, parks, and trails.
• The Trust Fund also helps develop parks and trails, though it is currently limited.
• Proposal 1 maintains the existing grant funding for land acquisitions and increases it for parks and trails. It will also make the redevelopment of existing facilities eligible.
• Proposal 1 removes the Trust Fund cap, allowing future oil, gas, and mining royalties to be deposited here rather than in the state’s general fund.

Proposal 1 on this November’s ballot makes some changes to the Michigan Natural Resources Trust Fund — and we think they’re all improvements. That’s why we joined the Vote YES on Proposal 1 Coalition along with over 30 other Michigan environment and conservation organizations.

What is the Trust Fund? It’s a dedicated fund that was created from the royalties on oil, gas, and mining operation on state land. It stopped receiving those funds in 2011 when it hit its $500 million cap. However it’s still growing from the interest and investments of those funds. To protect it from being raided for other purposes, voters moved it into the State Constitution (Section 35).

Each year, governments apply for grants from the fund. Those grants are scored, prioritized, then recommended (or not) by the appointed Trust Fund board before being approved by the legislature and governor.

Trust Fund grants have been instrumental for land acquisition and park development in Detroit, including the RiverWalk, Dequindre Cut, May Creek Greenway, Belle Isle, and the DNR Outdoor Adventure Center. Many Detroit parks (e.g. Balduck, Patton, Butzel) have been renovated with these funds as well.

In 2013, we wrote a $3.4 million Trust Fund grant for the City of Detroit that allowed them to purchase the abandoned railroad corridor that will be part of the Joe Louis Greenway.

Ballot proposal impacts

Currently, a maximum of 25% of the available grants funding can be spent on park and trail development grants. The proposal changes this to a minimum of 25%, the same minimum for land acquisition. This analysis from the House Fiscal Agency highlights the benefit in doing this:

Changing the restriction on funds made available for MNRTF-funded development projects from a maximum of 25% to a minimum of 25% would allow the MNRTF Board to recommend, and the legislature to appropriate, more funding for projects than may currently be spent. A total of $86.0 million was made available for project funding in FY 2017-18, and all 34 acquisition applicants received grants totaling $28.9 million. However, only 97 of 121 development applicants received a grant since development awards were capped at $21.5 million (25% of the $86.0 million made available) though development applications totaled $29.0 million. Changing the development project funding ceiling of 25% to a floor of 25% would match the restriction on acquisition projects and provide for all development applications to be appropriated in a given year if recommended by the MNRTF Board.

Legislative Analysis, House Fiscal Agency, December 2018

There have been some misleading claims made that this change reduces land acquisitions, but as the above example, that is simply not the case. All of the recommended land acquisition and park/trail development grants could have been awarded that round. Instead, $7.5 million in funding for parks and trails was not available due to that 25% maximum limit.

We should add that the proposed change is especially beneficial to Detroit where land acquisition is less of a necessity compared to the funding needs for developing parks and trails.

The other major impact is more long term. When the Trust Fund hit its $500 million cap in 2011, oil, gas, and mining royalties started going to the State Parks Endowment. When that endowment hits its $800 million cap (still some years away), those royalties will go to the state’s general fund. If this proposal passes, they’ll go back into the Trust Fund instead, making even more funding available for land acquisition and park/trail development in Michigan.

Based on our in depth review of the ballot language, the current constitutional language, and our experience with the grant program, we see every reason to support ballot proposal 1.