Since my last legislative report officials with the Michigan Snowmobile Association (MSA) met again with staff from Gov. Rick Snyder’s office and key state legislators. The purpose of these meetings was to continue to discuss issues regarding funding for the snowmobile program. We again presented our snowmobile program and the need for additional funding for maintenance and infrastructure. We still remain confident they will see the need to invest in Michigan’s snowmobile program.
We had hoped that Gov. Snyder’s 2017 budget would include funding the Snowmobile Trail Improvement fund, but it did not. But we are still hopeful that we can get state funding for the program
Currently, the budget is in conference committees. MSA officials will testify at the natural resources and tourism committee meetings in late spring. We will let them know what our blight is.
At this point in time it doesn’t look like anyone is willing to put money for the snowmobile program into the state budget. However, MSA officials are still presenting snowmobiling’s Return on Investment (ROI) to state officials. Snowmobilers pay $6 million to self-fund their own sport, and snowmobiling has an economic impact of over $600 million. Using those figures, the ROI this state receives on YOUR investment is $62.50 for every $1 YOU the snowmobiler puts into YOUR sport.
Based on that ROI, we firmly believe that at least Michigan tourism should be contributing financially to our program
No Trail Permit Increase
Every legislator that we have come in contact with in the past several months has made it clear that they had received numerous calls from their constituents regarding trail permits, and those voicing their opinions did not want snowmobile trail permits to increase. We had one legislator who thought the trail permit fee should be decreased so that more people can experience snowmobiling in Michigan.
Trail permit fees were increased to $48 this season. Under state law, permits will stay at that price until 2021, when the state treasury will again use the past five years of CPI to determine the cost of our trail permits (as it did with the increase this year).
What We Need to Break Even
MSA has stressed, over and over, that as it stands now we need to increase the trail permit to $60 in order for the snowmobile program to just break even. That includes everything — signing and brushing, grooming and equipment maintenance, maintaining trails, and the purchase of new equipment.
Let me make it very clear, without a trail permit increase to at least $60, and if the program doesn’t get additional funding for the 2018 budget, cuts will be made to the program. Those cuts will lead to the demise of the best snowmobile program in this country.
MSA has also made it clear to legislators that we will not solely fund this program on the backs of YOU our users. We continue to point out that snowmobilers already self-fund the program to the tune of $6 million a year.
What We Need to Get the Program Back on Track
During the past several months, MSA and the Department of Natural Resources (DNR) completed a 10-year budget that shows projections and the needs for the future of the snowmobile program, which includes equipment and infrastructure needs.
We believe there is a need for an additional $5 million in the snowmobile program; with $2.5 of that needed for grooming tractors and $2.5 of that needed for infrastructure
So where does the money come from to keep the program working? Where does the money come from to keep your trails safe and smooth?
Current Snowmobile Program Funding
The Michigan Trail Improvement Fund currently has two sources of revenue: trail permit fees, and a portion of your state gas tax. Both trail permit fees and revenue from the gas tax are used to pay for the trail maintenance, signing and grooming. Your registration fees pay for snowmobile law enforcement.
So again, where does the money come from to keep the program working? Where does the money come from to keep your trails safe and smooth?
We are still asking ourselves those questions. Do we work to redirect law enforcement dollars onto the trail? Do we look at changes to the gas tax formulas?
Speaking of Gas Tax Revenue
As of Jan. 1, 2017, new state gas tax formulas went into effect. What that means for the snowmobile program is that the gas tax will generated an additional $900,000 for the snowmobile trail program during fiscal year 2017. During fiscal year 2018 the state gas tax will generate an additional $1.6 million for the snowmobile program.
You may now be asking yourselves, why aren’t those additional funds enough? The simple answer is that the Michigan snowmobiler has demanded smooth trails to ride on. To achieve that we desperately need reliable equipment.
I’ve said it before. The cost of grooming equipment has more than doubled in past 10 years. Environmental Protection Agency (EPA) rules and regulations, increasing electronics, and technology has added to the cost of grooming equipment.
Looking back at the budgets that we set in 2007-08 the plan was to replace 10 to 15 pieces of equipment every year. Low snow fall, a recession, and low trail permit sales made that impossible. We started out in a hole, and were never able to meet the goal of purchasing 10 to 15 pieces of equipment a year. There were years we purchased eight and years we purchased only three.
Cause and Effect
With every cause, there is an effect. Low snow years, led to smaller than estimated trail permit sales, which has led to less money to purchase equipment. A major recession caused lower than anticipated registrations.
In the Upper Peninsula, our goal is to replace every groomer used within three years. We are currently replacing those groomers every five to seven years. In the Northern Lower Peninsula, our goal is to replace groomers every five to seven years, and we are replacing every nine to 12. In the Southern Lower Peninsula, we aren’t replacing any equipment.
What Does That Mean to the Snowmobile Program?
Older equipment means more repairs. Maintenance costs are skyrocketing. The age of the equipment on our trails requires more maintenance. Those repairs are becoming more “big ticket items,” like engines and hydraulics systems. Even with regular maintenance these machines are just wearing out.
For example, we have a tractor in Seney that should have been replaced two years ago, this year alone, that tractor has required been more than $80,000 in repairs.
Within the maintenance budget routine maintenance includes things like oil, grease, parts, bulbs, and windshields.
There is also a catastrophic maintenance within the maintenance budget. This fund includes repairs like a track falling off or an engine blowing. The average cost of the catastrophic maintenance fund is $400,000. This year that cost is more than $1 million.
We are hoping to purchase five to seven units in next year’s budget, but if we don’t find another funding source, cuts will have to be made, and less equipment will be purchased.
Keeping all this in mind, the good news is that the Department of Natural Resources (DNR) is working hard to try and find different funding avenues. Everything is being looked at — trust funding acquisition funds, Recreation Transportation Program (RTP) funds and ORV funds to pay for more infrastructure on duel trails.
State officials know our issues. We are doing everything we can to keep those issues in front of them. However, if we don’t have an additional funding source(s) by June, cuts will be made the Michigan snowmobile program
Updating Some Good News
To propose any income changes in the snowmobile trail improvement fund, MSA looked at all costs associated with the program. To do this we met with the Program Services Chief of the Michigan DNR Parks & Recreation Division. We looked at the last five years of costs, and also tried to look ahead and put together the projected 10-year snowmobile program budget that we presented to state legislators.
During this process while looking at all budget categories, we discovered a fund balance in the new equipment purchase budget line item. This fund balance has been identified as carry-overs from many years of not spending every dollar approved for new equipment. It was created by savings on trade-ins, lesser equipment costs, and prices that came in under estimates. The excess money was simply carried forward into the next year’s equipment account. The extra money amounted to $1.6 million dollars.
That money was spent on recent pairs of existing equipment and the purchase of five tractors for the 2016-17 season.
The Snowmobile Advisory Workgroup (SAW) equipment subcommittee approved the purchase of equipment for the following grant sponsors:
Grand Marais Sno-Trails Association
Baraga County CVB
Sault Snowmobile Association
Superior Snowmobile Club
Missaukee Trail Blazers
Alpena Snowmobile Club
At this time we look to complete that budget and purchase two more!