Sierra Club urges a ‘No’ vote on Proposal 1

In the 1970s, conservationists championed the idea of using the revenue generated from the extraction of nonrenewable energy sources on state-owned land to purchase land for permanent public benefit. Legislation was first passed in 1976 to create a trust fund for this purpose. The creation of the Natural Resources Trust Fund was a visionary plan to offset the extraction of nonrenewable, polluting fossil fuels with the protection of scenic, recreational, and environmentally significant lands for the public in perpetuity.

For years, the legislature raided the Trust Fund for other purposes, so citizens voted by an almost 2-to-1 margin in 1976 to put the Trust Fund into the Constitution to protect it from those diversions and guarantee that its primary purpose remained to protect and acquire land. Twenty-five percent of annual revenues was reserved for grants to local governments so that they could do the same. The remainder was available for statewide acquisition purposes. The constitution contained no requirement that all revenue be spent annually, which allowed the fund to grow in order to ensure that as revenue from finite resource extraction declined, the fund would continue to fulfill its purposes. The fund currently does not receive any oil and gas revenues and has not since 2011 when the total oil and gas revenues into the fund reached the constitutional cap of $500 million dollars. All oil and gas revenues now go into the State Parks Endowment Fund. The Natural Resources Trust Fund now has about $590 million in assets and continues to grow so more income and earnings of the fund can benefit its mission.

Ballot Proposal 20-1 changes the fundamental purpose of the Trust Fund and prioritizes “development, redevelopment and renovation of public recreational facilities” over land acquisition by removing the 25% cap on local government grants and requiring that no less than 25% of revenues be directed towards the new purpose quoted above. This change will reduce substantially available funds for acquisition purposes at the state and local level. If passed by the voters, the Trust Fund could be weakened by shifting funds away from the protection of natural areas and to the development, redevelopment and renovation of public recreation facilities. Which, by the way, was at least partially the purpose of the State Parks Endowment Fund.

But that is not even all it does. It also fundamentally changes the way the Natural Resources Trust Fund operates by adding a definition of “accumulated principal limit.” That language, if enacted by passage of 20-1, would require the Trust Fund to divest the $90 million it has grown by, lose the buying power that represents and require the expenditure of every dime it earns or is given on an annual basis. It will change the fund from having a “soft” cap to a “hard” cap. This change will, over a period of time, substantially reduce the buying power of the fund.

If 20-1 is passed, the Trust Fund cap is eliminated as soon as the State Parks Endowment Fund reaches its “soft” cap of $800 million. The Citizens Research Council estimates that this elimination of the Trust Fund cap will take place about 2055. That is right, three and a half decades from now. That means three and a half decades of steadily reducing buying power for the Trust Fund. While the Michigan Chapter supports both lifting the cap and appropriate funding for park development, redevelopment and renovation, 20-1 is not the way to do that. We are faced with a climate crisis — and securing more land for permanent preservation becomes more important than ever.

Ongoing expenses will always be with us. Requiring revenue from a nonrenewable source to go to ongoing, increasing funding needs creates financial problems — it doesn’t solve them. Land is also nonrenewable — if we miss out on the acquisition of a spectacular parcel, and it gets sold and subdivided, that’s that — we missed it.

For all these reasons, the Sierra Club urges a “NO” vote on Proposal 20-1.