Election 2020: Here's What You Need To Know About Proposal 1

Oct 12, 2020

Michigan voters will see two questions on the statewide ballot. Proposal 1 would change how Michigan uses the royalties and earnings from gas and oil extraction on public lands.

It would also guarantee that those royalties and earnings would continue to be deposited into a state endowment fund. Under the current scheme that revenue would go to the state general fund once the endowment hits an $800 million cap. That’s not expected to happen for another three decades.

Most of Michigan’s environmental groups support the changes, but not every one of them. Here are some things you need to know to make a decision about the proposed constitutional amendment:

Here’s the actual language you’ll see on your ballot:

State 20-1 Proposal

A proposed constitutional amendment to allow money from oil and gas mining on state-owned lands to continue to be collected and state funds for land protection and creation and maintenance of parks, nature areas, and public recreation facilities; and to describe how money in those state funds can be spent

This proposed constitutional amendment would:

· Allow the State Parks Endowment Fund to continue receiving money from sales of oil and gas from state-owned lands to improve, maintain and purchase land for State parks and for Fund administration, until its balance reaches $800,000,000.

· Require subsequent oil and gas revenue from state-owned lands to go into the Natural Resources Trust Fund.

· Require at least 20% of Endowment Fund annual spending go toward State park improvement.

· Require at least 25% of Trust Fund annual spending go toward parks and public recreation areas and at least 25% toward land conservation.

What is the State Parks Endowment Fund?

This fund gets revenue from gas and oil royalties from extracting those resources from public land. The money can be used to acquire land and make new improvements such as buildings and infrastructure. It was created in 1994 by voters as a constitutional amendment to provide a permanent source of money for the state parks system and to acquire and preserve land. The fund currently has about $273 million in it as of 2019.

What is the Michigan Natural Resources Trust Fund?

The MNRTF was created in the 1970s and amended by voters in 1994 as part of the amendment mentioned above. It gives money to local governments to acquire land for recreational use, conservation, and building recreational facilities. The MNRTF is limited to a total of $500 million dollars which it reached in 2011. It earns about $45 million annually in interest and earnings. Since hitting the cap, oil and gas revenues have gone to the State Parks Endowment Fund.

Credit Paulette Parker / Michigan Radio

What would change?

If approved, Proposal 1 would eliminate the $500 million cap and allow the Michigan Natural Resources Trust Fund to grow as long as oil and gas royalties keep coming in. However, that would not happen until the State Parks Endowment Fund reached a designated cap of $800 million. As mentioned above, it’s at approximately $273 million right now. It’s estimated it will take 30 years to reach the new cap.

Prop 1 would also change annual spending requirements.

Proposal 1 would require at least 20% of annual interest and earnings from the State Parks Endowment Fund to be spent on state park improvements.

Right now, Michigan Natural Resources Trust Fund spending on local parks, recreation areas, and conservation is limited to 25%, and at least 25% must be used to acquire land. Proposal 1 would require at least 25% be spent on development.

How did this proposed amendment get on the ballot?

Legislators in the House and Senate unanimously approved the proposed amendment to the constitution to be presented to voters.

Who supports Proposal 1?

A large number of environmental groups, hunting and fishing groups, businesses, and others formed “Vote Yes for MI Water, Wildlife, & Parks” to encourage voters to approve the amendment. In a release announcing support, the groups stressed the amendment would not raise taxes and would expand Michigan’s dedication to maintaining and protecting the great outdoors. Many environmental groups support Proposal 1, including Michigan Environmental Council, Michigan League of Conservation Voters, Environment Michigan, Natural Resources Defense Council, Michigan NAACP Environmental and Climate Justice Committee, National Wildlife Federation, Alliance for the Great Lakes, Huron River Watershed Council, and West Michigan Environmental Action Council.

Who opposes Proposal 1?

The Sierra Club and the Green Party of Michigan oppose Proposal 1.

The Sierra Club says the amendment would undermine the original intent of spending 75% to acquire and preserve land. The Sierra Club says it recognizes the need for greater investments in maintenance of recreational facilities within Michigan’s state-owned public lands, but feels the legislature should find ongoing sources of funding for maintenance.

The Green Party agrees with the Sierra Club and adds it opposes linking the state’s operating budget to “continued oil and gas drilling – including fracking.”

Other considerations

The non-partisan Citizens Research Council notes that if Proposal 1 is approved, the Legislature will no longer have the option of using oil and gas extraction royalties for other budgetary needs.

Data and other information came from the Citizens Research Council, Ballotpedia, news releases from Vote Yes for MI Water, Wildlife & Parks, Sierra Club, Green Party Michigan, and interviews with involved parties.

This post has been corrected to reflect that currently, 25% of the Michigan Natural Resources Trust Fund's must go to land acquisition, not 75%, and that maintenance expenditures are already part of the fund's purpose.