Trust Fund Baby

The Michigan Natural Resources Trust Fund is funded from oil and gas royalties that have provided millions of dollars the state has used to purchase large tracts of lands. Those purchases have provided untold outdoor recreation opportunities for residents and visitors. A significant downside, however, is that public ownership effectively takes these lands off tax rolls. Traditionally, the state reimburses local units of government for the lost revenue using general fund money, even though Article IX of the state Constitution allows interest and earnings of the Natural Resource Trust Fund to be used to for these “payments in lieu of taxes” to local government.

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Rep. Joel Johnson, R-Clare, has introduced House Bill 4577, which would direct that PILT money come from interest and earnings of the Natural Resource Trust Fund as provided for in the Constitution. One has to wonder why legislators have not already availed themselves of this opportunity to save money that can be used to help close the state’s budget deficit.

When state officials and lawmakers place more private land in public ownership, there is a cost to the taxpayers for that action. HB 4577 is a good start in addressing the consequences of the use of trust fund dollars to buy state land. This is just a start, however, and more will need to be done.