A First Glance at the 2018 Snowmobile Trail Improvement Fund Budget

November 2017

Last month, I wrote that members of your Michigan Snowmobile Association (MSA) executive board and committee were already looking at budget numbers for the 2018 Snowmobile Trail Improvement Program. At this time, I would like to share preliminary figures, both revenue and expenditures. Revenue and expenditures are being based on last season’s numbers. Please remember these numbers are estimates and may change, depending on the snowmobile season we have in the coming months.

What Is the Snowmobile Trail Improvement Program?

The Snowmobile Trail Improvement Fund provides funding to maintain snowmobile trails as part of the designated statewide trail system. Funding for that program comes from snowmobile trail permit sales and gas tax revenue. Grant funds are available for three purposes.

  1. Seasonal grooming and general maintenance of snowmobile trails.
  2. Special maintenance projects that improve the condition and/or access to trails.
  3. Replacement of equipment used for maintaining trails

Trail Permit Revenue

The largest revenue stream coming into the snowmobile trail improvement program comes from the sale of snowmobile trail permits. Permits are currently $48; of that $46.53 goes directly into the program.

In looking at the included Snowmobile Permit Sales chart you can see that sales were flat in the last two years, averaging around 130,000 permits sold. This year the DNR is budgeting 128,000 permits sold, in case we have another bad winter. Let’s all hope we have a good snow year, and permit sales are up. The more snow, the more permits sold, the more revenue going into the Snowmobile Improvement Fund budget.

Gas Tax Revenue

The snowmobile program’s second source of revenue has increased this year. As you can see on the chart, Gas Tax Revenue, in the past several years that revenue has remained relatively flat. This year, a new formula is being used to calculate the amount the snowmobile program receives, and in 2017 there was an increase in gas tax revenue owed to the program.

The amount listed on the included chart is expected to increase by the end of the year. A final payment was not calculated on the chart. We expect to receive an increase of nearly $1 million in gas tax revenue when comparing to 2016 numbers. Michigan’s snowmobile program still doesn’t receive as much gas tax revenue as the programs in WWisconsin and Minnesota, but we are getting closer. Again, we pay the gas tax and expect to receive our fair share.

Projected 2018 Expenditures

Now let’s look at expenditures. Without going into in-depth, specific line items the chart, Snowmobile Fund FY 2018, shows basic expenditures with the snowmobile program.

When looking at the grooming line item on the chart, please remember that number not only includes grooming. It includes grooming, brushing and signing, uutility, comp insurance, lliability insurance, land leases, snow plowing, portable ttoilet rental, special mmaintenance, eequipment ppurchases and eequipment repair.

The DNR operations item listed on the chart includes the DNR’s cost to manage the snowmobile program. If you take the total program budget and look at what the DNR is paid, they receive rroughly 15 percent of the total revenue coming into the snowmobile trail improvement budget. MSA feels this cost is in line with what the DNR does for the program and doesn’t have an issue with that cost. At one time, not too long ago, that percentage was at more than 20 percent. MSA has worked with DNR officials to get that expenditure where it should be.

The hardest thing for the board to understand is the cost of doing business listed on the chart as State Operations. This line item is around 2.5 percent of the budget and is basically the fee every state fund must pay the state for operation of state government. It is a state of Michigan “overhead fee” that every fund operating within the state pays.

Carry Over

The state also requires the carry over within the budget listed as, Beginning Fund Balance and Ending Fund Balance. We have been told they like that number to be around $2.5 for the snowmobile program. Carry over is needed to have the available money to get the program bill paid at the beginning of the season before collection of trail permits begin. Do we need $2.5? We don’t think so and will continue to work with the department to get that number lowered.

MSA hopes that by continuing to share this information, both snowmobilers and the public will understand that snowmobiling is big business, and very important to this state.