Summary: Executive Budget Recommendation

Summary: Conference Report

NATURAL RESOURCES

FY 2004-05 Senate Bill 1068

Analyst: Kirk Lindquist

	FY 2003-04 YTD (as of 2/12/04)					*Difference: Conference* *from FY 2003-04 YTD*
	FY 2003-04 YTD (as of 2/12/04)	Executive	Senate	House	Conference	*Amount*	%
IDG/IDT	$3,437,900	$3,528,700	$3,528,700	$3,528,700	$3,528,700	$90,800	2.6
Federal	33,706,600	37,195,200	34,629,300	37,195,200	37,195,200	3,488,600	2.7
Local	0	0	0	0	0	0	0.0
Private	1,871,400	2,024,300	2,024,300	2,024,300	2,024,300	152,900	8.2
Restricted	186,358,700	187,914,500	188,075,600	188,108,900	192,702,200	6,343,500	3.4
GF/GP	28,089,400	25,507,300	25,040,100	24,873,100	28,885,000	795,600	2.8
Gross	$253,464,000	$256,170,000	$253,298,000	$255,730,200	$264,335,400	*$10,871,400*	*4.3* (
FTEs	2,094.5	2,076.5	2,077.5	2,072.5	2,072.5	(22.0)	(1.0)

Overview

The Department of Natural Resources manages, conserves, and protects Michigan’s resources. Programs include forest management, land and minerals management, wildlife and fisheries management, conservation law enforcement, and State Park and forest campground programs. Federal funds support game and fish habitat maintenance, emerald ash borer eradication, and hunter safety protection programs.

Summary of FY 2004-05 Major Budget Issues

Department-wide

The Senate included separate line items for travel and reduced travel appropriations. The House did not concur. The House instituted an across the board 4% General Fund reduction.

Snowmobile Trail Maintenance

The recent fee increase on snowmobiles has generated approximately $1.0 million in new revenue for trail maintenance.

Major Budget Changes from FY 2003-04 YTD Appropriations:	FY 2003-04 YTD (as of 2/12/04)	Conference Change
*1. Payments in Lieu of Taxes* Line item is to remain in the DNR budget. This $7.8 million payment will be split between General Fund and Restricted fund support. Executive: ($8,272,800) Senate: ($8,272,800) House: ($8,268,800)	Gross Restricted GF/GP	$8,272,800 6,259,900 $2,012,900	($472,800) (2,359,900) $1,887,100
*2. Snowmobile Trail Maintenance* Expanded state and local snowmobile trails program appropriating the added amount realized through the recently enacted fee increase. Executive: $1,042,500 Senate: $1,042,500 House: $1,042,500	Gross Restricted	$8,585,900 8,585,900	$1,042,500 1,042,500
*3. Marine Safety Grants* Reduces Marine Safety grant funds. These grants are provided to county sheriffs to partially support the cost of enforcing watercraft laws. Annual revenue to the Marine Safety Fund is not sufficient to cover the traditional funding level of the program. A fee increase may be necessary to support the current grant level. Executive: ($500,000) Senate: $0 House: $0	Gross Restricted	$2,805,000 2,805,000	$0 0
*4. Funding Shift: Forest Fire Suppression* Replaces General Fund support with Forest Development Fund revenue. Executive: $0 Senate: $0 House: $0	Gross Federal Restricted GF/GP	$9,506,000 734,400 2,913,200 $5,858,400	$0 0 1,000,000 ($1,000,000)
*5. Retail Sales System Contract* Increased automation contract reflecting increased software and systems enhancement costs realized with the recent upgrade of point-of-sale terminals used for hunting and fishing license sales. Executive: $200,000 Senate: $200,000 House: $200,000	Gross Federal Restricted GF/GP	$5,241,700 200,000 4,945,900 $95,800	$200,000 0 200,000 $0
*6. Economic Adjustments and Employee Related Savings* Increased each line item supporting pay roll expenses to cover the cost of scheduled pay increases and fringe benefit costs ($13,365,000). Employee salaries are to increase by 7% and health insurance premiums are to increase by 13.6%. The contribution rates for the defined benefit and defined contribution retirement programs are increasing as well, reflecting the system costs related to the recent early retirement program. Workforce related savings ($4,797,100) are recommended to offset the cost of included economic adjustments. Savings (amounting to 5% of payroll) are to be achieved through state employee contract concessions. Executive: $8,567,900 Senate: $8,567,900 House: $8,567,900	Gross IDG Federal Private Restricted GF/GP		$8,567,900 90,800 922,700 52,900 6,780,700 $720,800

Major Budget Changes from FY 2003-04 YTD Appropriations:

FY 2003-04 YTD

(as of 2/12/04)

Conference

Change

1. Payments in Lieu of Taxes

Line item is to remain in the DNR budget. This $7.8 million payment will be split between General Fund and Restricted fund support.

Executive: ($8,272,800)

Senate: ($8,272,800)

House: ($8,268,800)

Gross

Restricted

GF/GP

$8,272,800

6,259,900

$2,012,900

($472,800)

(2,359,900)

$1,887,100

2. Snowmobile Trail Maintenance

Expanded state and local snowmobile trails program appropriating the added amount realized through the recently enacted fee increase.

Executive: $1,042,500

Senate: $1,042,500

House: $1,042,500

Gross

Restricted

$8,585,900

8,585,900

$1,042,500

1,042,500

3. Marine Safety Grants

Reduces Marine Safety grant funds. These grants are provided to county sheriffs to partially support the cost of enforcing watercraft laws. Annual revenue to the Marine Safety Fund is not sufficient to cover the traditional funding level of the program. A fee increase may be necessary to support the current grant level.

Executive: ($500,000)

Senate: $0

House: $0

Gross

Restricted

$2,805,000

2,805,000

4. Funding Shift: Forest Fire Suppression

Replaces General Fund support with Forest Development Fund revenue.

Executive: $0

Senate: $0

House: $0

Gross

Federal

Restricted

GF/GP

$9,506,000

734,400

2,913,200

$5,858,400

1,000,000

($1,000,000)

5. Retail Sales System Contract

Increased automation contract reflecting increased software and systems enhancement costs realized with the recent upgrade of point-of-sale terminals used for hunting and fishing license sales.

Executive: $200,000

Senate: $200,000

House: $200,000

Gross

Federal

Restricted

GF/GP

$5,241,700

200,000

4,945,900

$95,800

$200,000

200,000

6. Economic Adjustments and Employee Related Savings

Increased each line item supporting pay roll expenses to cover the cost of scheduled pay increases and fringe benefit costs ($13,365,000). Employee salaries are to increase by 7% and health insurance premiums are to increase by 13.6%. The contribution rates for the defined benefit and defined contribution retirement programs are increasing as well, reflecting the system costs related to the recent early retirement program.

Workforce related savings ($4,797,100) are recommended to offset the cost of included economic adjustments. Savings (amounting to 5% of payroll) are to be achieved through state employee contract concessions.

Executive: $8,567,900

Senate: $8,567,900

House: $8,567,900

Gross

IDG

Federal

Private

Restricted

GF/GP

$8,567,900

90,800

922,700

52,900

6,780,700

$720,800

Major Boilerplate Changesfrom FY 2003-04:

Sec. 218. Porcupine Mountain Ski Hill PILT Payment– NEW

Requires PILT payment for the ski hill operation to be made from ski hill fee revenue.

Sec. 702. State Park Refuse Collection Practices– DELETED

Requires the Department to continue to collect trash at state parks.

Sec. 801. State Forest Certification– NEW

Requires a report on the State forest management plan.

Sec. 805. Southwest Michigan Forester– NEW

Requires the department to assign one forester to handle forest management matters for state lands in southwest Michigan.