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Michigan Natural Resources Trust Fund -- the Public's Trust in Land for 30 Years

March 2, 2006

The Michigan Department of Natural Resources has an 85-year history of caring for this state’s natural resources. Some resources, such as wildlife, fish and forests, are renewable resources that can be replenished and enhanced constantly. Other resources, such as oil and gas, are not renewable. Once taken, they are gone forever.

In the early 1970s, the discovery of oil in the popular Pigeon River Country State Forest in the northern Lower Peninsula prompted several oil companies to apply for rights to drill in this pristine wilderness, which is home to Michigan’s elk herd.

This touched off a heated debate between those concerned with the environmental impact of drilling on public lands and those who felt that drilling could occur with minimal impact. Eventually, a compromise was reached which allowed drilling in the forest provided that sufficient environmental protection was ensured and that lease revenues and royalties would be used for the purchase of new recreational lands for public use.

Previously, revenues from leasing state land for oil and natural gas exploration and from royalties on successful wells had been funneled directly into the state’s general fund. The money was spent as fast as it was earned.

Advocates of the trust fund concept, including then State Senator Kerry Kammer, believed it fair and logical to use profit from public lands to enhance public ownership, thus compensating the public for intrusion on their lands with enhanced recreational opportunities.

When the original land trust fund was established with the passage of the Kammer Recreational Land Acquisition Fund Act of 1976, it was hailed by environmentalists, conservationists and recreation groups as an investment in Michigan’s future.

In effect, the trust fund would allow the people of Michigan to trade two valuable nonrenewable resources, oil and gas, for another nonrenewable resource -- land.

The trust fund’s ceiling was set at $100 million. Although the original purpose of the fund was solely to preserve and protect Michigan's natural resources through buying and/or improving public parks and recreation lands, its financial success made it a target to help balance the state budget. During its first seven years, more than $100 million was diverted to other programs outside its original stated purpose.

Michigan voters then stepped in to approve a constitutional amendment in 1984, creating a new Michigan Natural Resources Trust Fund that provided constitutional protection for the original funding level and purpose of the land trust fund and increased the fund cap to $200 million. Under the new law, up to one-third of trust fund revenues could be spent annually to purchase land for resource protection and public outdoor recreation and develop outdoor recreational facilities across the state.

In 1994, Michigan voters overwhelmingly approved Proposal P, which finally reversed the constitutional provision that allowed the annual diversion of $20 million from the trust fund to the state’s major economic development fund. The proposal also increased the trust fund cap to $400 million and created a Michigan State Parks Endowment Fund, which receives $10 million in trust fund revenues each year for the operation, maintenance and capital improvements at Michigan State Parks.

Finally, in 2002, voters approved Proposal 2, which increased the cap to $500 million.

“During the 30 years of its existence, the trust fund has provided more than $600 million for state and local land acquisition and natural resource development projects in every county in Michigan,” said Jim Wood, manager of DNR Grants Management section.

These projects have included some very special tracts of land -- places such as the Pigeon River Country State Forest, St. John’s Marsh and the tip of the Keweenaw Peninsula; hundreds of miles of frontage on the Au Sable, Manistee, Jordan and other significant inland rivers and hundreds of acres of precious Great Lakes shoreline.

Since 2002, the trust fund also has contributed more than $16 million to allow the DNR to acquire a working forest conservation easement allowing timbering and public access on approximately 248,000 acres of land in several counties across the Upper Peninsula. This project, known as the Kamehameha Schools Development Rights Purchase, represents the single largest easement purchase in the state’s history.

“The trust fund is the single most important tool available to state and local governments to ensure public outdoor recreation opportunities for future generations,” Wood said. “Without the trust fund, very little additional recreational lands would be acquired.”

A few of the DNR’s significant recreation development projects include the Black Mountain Forest Recreation Area, a 9,000-acre multi-purpose complex developed with trust fund support in the early 1990s. Trust Fund revenues also provided nearly
$2 million for property acquisition and construction of the Presque Isle Marina in 1992, and more than $900,000 to upgrade DNR-operated shooting ranges at Rose Lake, Sharonville and Pontiac Lake. A 13-mile hard-surfaced trail for walkers, joggers and bikers that meanders through the Island Lake Recreation Area was completed in 1997.

The trust fund has helped build access sites for boating and fishing at many locations throughout the state, and it has also played a key role in developing Michigan’s statewide trailways system, where abandoned railroad corridors are converted into multi-purpose recreational trails, popularly known as rail trails.

“These land acquisitions and development projects represent an economic investment in the quality of life in Michigan,” Wood said. “Their value to Michigan residents and future generations in terms of protection of valuable land resources and enhanced state, regional and local recreation opportunities is immeasurable.”

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