Big changes afoot for state outdoors fund?

Southern Michigan cities struggling to operate parks and recreational facilities may soon receive a windfall from an unlikely source: the Michigan Natural Resources Trust Fund.

The fund was established in 1976 to buy land for natural resource protection and public outdoor recreation. Funding comes from royalties paid by companies that drill for oil and gas on state land.

The widely heralded fund has provided $959 million in grants over the past 36 years. Those grants have been used to: acquire miles of waterfront property along rivers and lakes; purchase huge tracts of forestland; increase public access to lakes, rivers and forests; and build scores of boat launches, parks, ball fields and other outdoor recreation facilities. But a confluence of recent events has trust fund managers shifting their focus away from buying property in Northern Michigan — where the state owns a disproportionate amount of land — to acquiring land and funding more recreation projects in the southern Lower Peninsula, particularly in urban areas.

Less money for Trust Fund grants, the state’s new cap on how much land the Department of Natural Resources can own and the lack of green space in cities are driving the changes.

Fund leaders eye southward shift

"I think it’s possible we could see new state parks in cities," said Bill Rustem, a senior adviser to Gov. Rick Snyder. Rustem, who worked for Gov. William Milliken in the 1970s, helped create the Natural Resources Trust Fund.

"If you look at the availability of public land, most of it is in Northern Michigan," Rustem said. "We have not done a good enough job of creating public spaces and access to natural resources in our cities, and it’s our cities that will determine the future of Michigan."

Erin McDonough, executive director of Michigan United Conservation Clubs, said state officials intent on shifting the Trust Fund’s focus to Southern Michigan should tread cautiously.

"Putting an emphasis on grants to urban centers is a good idea as long as you don’t shut the door to the rest of the state," McDonough said.

McDonough and other conservation leaders said there are still areas of northern Michigan and the Upper Peninsula that need more public land and better outdoor recreation facilities. Republican lawmakers want the state to stop buying land in the U.P.

Bob Garner, who heads the Trust Fund Board of Directors, said the fund could help bring nature to city dwellers who might never travel to Northern Michigan.

"I think we’ll make it easier for cities to buy land, but that doesn’t mean we shouldn’t buy more land up north," Garner said.

Oil and gas propel natural fund

The Natural Resources Trust Fund was the nation’s first program to use oil and gas royalties to purchase land and develop new outdoor recreation facilities. It remains the largest program of its kind in the United States.

The predecessor to the Natural Resources Trust Fund was established in response to a 1970s controversy over the oil industry’s bid to drill for oil and gas under the Pigeon River State Forest, northeast of Gaylord. It was originally established to acquire land for hunting and fishing, but has since been expanded to support numerous outdoor activities.

Voters in 1984 made the Trust Fund part of the Michigan Constitution, a move that removed the temptation to divert its funds to other state activities.

Map of grants issued by county

Several other states — including Minnesota, Missouri, Arkansas and Tennessee — have recently established trust funds. But none of those programs come close to Michigan in terms of funding or achievements.

Among its 1,957 grants, the Michigan Natural Resources Trust Fund has acquired: 70 miles of river frontage and more than 25,000 acres along the Au Sable and Manistee rivers; several miles of frontage along Lake Michigan and Lake Superior; 10,000 acres of undeveloped land in Mackinac County; an easement that ensured public access to 248,000 acres of forestland in the Upper Peninsula; and thousands of miles of recreational trails.

For much of its history, the Trust Fund was focused on buying land in Northern Michigan and the U.P. But three recent developments have shifted the focus to urban areas in southern Michigan. Consider:

* After years of criticism that too many Trust Fund grants were awarded to communities in Northern Michigan, the fund’s board of directors in 2009 prioritized grants in urban areas, near population centers.

* The Trust Fund last year reached its revenue cap of $500 million. So, all new oil and gas royalties go into the Michigan State Parks Endowment Fund. From now on, Trust Fund managers can only spend interest earned on the fund’s $500 million corpus. That will reduce the amount available annually for grants from roughly $35 million to about $25 million, said Steve DeBrabander, a state Department of Natural Resources worker who oversees the Natural Resources Trust Fund.

* Earlier this year, the Legislature and Gov. Rick Snyder passed a law that capped the amount of land the DNR may own at 4.626 million acres. That law, which effectively prohibits the DNR from buying large chunks of land north of Clare unless it sells other parcels, could force the department to use Trust Fund grants to only buy land in Southern Michigan, according to several state officials.

"Historically the Trust Fund supported projects in the northern Lower Peninsula and the U.P.," DeBrabander said. "The Trust Fund board made urban projects a priority (in 2009); it’s an attempt to make sure public outdoor recreation opportunities are being provided in urban areas."

This year, the three largest Trust Fund grants went to communities in Southern Michigan: $3.7 million for recreational trails in Oakland County; $3 million to acquire 400 acres of land on Harsens Island, in the St. Clair River; and $3 million to purchase 2,000 acres of land in Jackson and Washtenaw counties for a new recreation area, the River Raisin Recreation Area.

Only one project in Northern Michigan received more than $1 million from the Trust Fund this year: Leelanau County’s Leland Township received a $2.9 million grant to buy 104 acres of waterfront property along Lake Michigan. The site will become the Clay Cliffs Natural Area.

Fund coveted for other purposes

Some state lawmakers believe the Natural Resources Trust Fund should evolve further, by helping to finance roads, airports and other purposes.

State Rep. Dave Agema, R-Grandville, introduced legislation last year to use 80 percent of Trust Fund revenue to fix roads and upgrade airports. His bill died in committee.

Rustem, the governor’s adviser, said the Trust Fund is protected by the constitution, so any attempts to raid the fund would prompt a legal challenge.

State Sen. Tom Casperson, R-Escanaba, said the DNR should use the Trust Fund to maintain crumbling marinas and build more roads that provide public access to state lands. Casperson, who authored the state’s new land cap, said it’s senseless for the Trust Fund or the DNR to buy more land when the state is struggling to properly maintain its current land holdings.

And Sen. Bruce Caswell, R-Hillsdale, introduced legislation in September that would divert Trust Fund revenue into the state transportation fund, where it could be used to fix roads.

Conservation leaders fear the state’s new land cap could fuel attempts to raid the Trust Fund.

"If the Trust Fund can't purchase land, then it becomes susceptible to being diverted to other uses," said Drew YoungeDyke, policy and communications specialist for the Michigan League of Conservation Voters. "It would take a lot to do it, but that doesn't mean the Legislature wouldn't try – that's why we had to put (the Trust Fund) in the Constitution in the first place."

There is also a battle over control of Trust Fund expenditures.

Last summer, state lawmakers took the unprecedented step of removing large land acquisition grants from the list of Trust Fund grants. Lawmakers objected to the DNR receiving millions of dollars for land acquisitions when DNR officials didn’t specify which parcels they wanted to acquire.

That spat prompted state Sen. Darwin Booher, R-Cadillac, to introduce legislation that would give the Legislature more control over Trust Fund grants.

Garner, the Trust Fund chairman who wrote the legislation that created the first Trust Fund in the 1970s, said he doesn’t understand why lawmakers want to change a program that has bolstered Michigan’s recreational economy and earned widespread praise in the process.

"This has been a darned good program," he said.

Garner said limiting Trust Fund board members to eight years of service would hurt the grant program and the communities it serves.

"Terms limits didn’t serve us well with the Legislature," Garner said. "I can’t see how they would serve us well with the Trust Fund."

Jeff Alexander is owner of J. Alexander Communications LLC and the author of "Pandora's Locks: The Opening of the Great Lakes - St. Lawrence Seaway." He’s a former staff writer for the Muskegon Chronicle.