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?