What To Do With Oil & Gas Revenue?

What should the state of Michigan do with oil and gas royalties it claims from mineral leases? It seems like a conversation we’ve had before. And we did when the Michigan Natural Resources Trust Fund (NRTF) was established in 1976. That was 35 years ago, but we are in need of having that conversation again.

A bill recently introduced in the Michigan State Senate, Senate Bill 1273, would see that money put into the Michigan Transportation Fund to be used for building and maintaining roads, streets, and bridges. The revenue is now being deposited into the Michigan State Parks Endowment Fund.

Not familiar with the Michigan State Parks Endowment Fund? The fund was created when voters approved Proposal P in 1994 for the purpose of serving as a constant and stable funding source for Michigan’s 97 state parks. With the NRTF now capped at $500 million, oil and gas revenues once deposited in the NRTF now flow into the State Parks Endowment Fund. This was put in place by an overwhelming majority of Michigan voters.

The Parks Endowment Fund has a cap on it of $800 million dollars, and once the cap is reached no one is quite sure where the revenues would go. That is where the bill comes in.

Michigan law currently states that once the Parks Endowment Fund reaches its cap, the revenues are to be distributed “as provided by law.” This bill would become that “law,” as is required, and no vote of the people or constitutional amendment would be required.

When the Trust Fund was established, the idea was that money from the extraction and use of non-renewable resources belonging to the people of Michigan should go back into natural resources to be used for all generations who will not have the benefit of those mineral resources.

Our initial thought is that money should stay in natural resources, and go towards projects that advance our natural resources heritage both now and for future generations.    

What do you think oil and gas revenues should be used for once the State Parks Endowment Fund reaches its cap?

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  • http://www.facebook.com/PatHoganInc Patrick Hogan

    Does this mean the endowment fund currently has $800 million or it has dispursed $800 million?

  • Jimbo

    Not into roads and bridges…..

  • Lynn Siebers

    Keep it to fund State Park upgrades and operational expenses

  • Norman

    A couple of thoughts. Number one is that the State should use it on Roads, Bridges and Transportation associated infrastructure projects since much of the Oil is refined and used for Transportation. Number two is that whatever percentage of Oil and Gas goes toward Heating Homes and businesses, that percentage of revenue should be used to offset Property Taxes from Home Owners and Business Owners. In other words, If the revenue is from Transportation type use of Resources, use it for Transportation associated development and maintenance. If the revenue is from home and business use resources, apply it toward reduced Property Taxes. Property Taxes should not be based on value of the property, it should be based on a Budget and Revenue requirement.

  • MDL

    An overwhelming percentage of the fund currently goes to non-hunting/fishing recreational projects. My vote would be to direct the excess to the purchase and habitat management of S. Michigan game lands for the expansion of the state game areas (where most of the state’s population resides). This would expand recreational opportunities close to home and also help relieve some of the extreme hunting pressure on these areas.

  • playedthegame

    These monies are protected from a money grab from politicians ! AND IT MUST STAY THAT WAY!