January 2017
Why Did the Trail Permit Raise to $48 This Year?
That question has been asked a thousand times since trail permits became available this fall. The Michigan Snowmobile Association (MSA) did not increase the permit, so let me tell you why trail permits went up! The existing state trail permit law was approved in 2009. Within that law there were provisions to raise the permit from $25, to $35, and then to $45. The next section of the law reads:
(c) For permits valid for the 1-year period beginning October 1, 2016 and every fifth year thereafter, the state treasurer shall adjust the current permit fee by an amount determined by the state treasurer to reflect the cumulative percentage change in the consumer price index during the most recent 5-year period for which consumer price index statistics are available, rounded to the nearest dollar. A fee adjusted by the state treasurer under this subdivision shall remain in effect for 5 years. As used in this subdivision, “consumer price index” means the most comprehensive index of consumer prices available for this state from the bureau of labor statistics of the United States department of labor.
Using the CPI, our trail permits were raised to $48.42. This amount was rounded down to the $48 snowmobilers are paying this season. Permits will stay at that price, unless the law is changed. In 2021 the treasury will again use the past five years of CPI to determine the cost of our trail permits.
MSA Will Not Be Seeking a Trail Permit Increase
Many of you have also called and voiced your opinion about the possibility of the trail permit increasing to $60. The Michigan legislature has made it very clear that they have also heard you, and have made it clear to MSA, that they will not support an increase to the permit. 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?
MSA officers and staff went to the Michigan State Capitol on Nov. 30 to discuss answers to those questions. There we met with officials from the governor’s office and members of the legislature. We have never met face-to-face at this level of state government before. We presented our snowmobile program and the need for additional funding. They listened, and we will be meeting with them again very soon. We are confident they will see the need to invest in Michigan’s snowmobile program
We also made it very clear that if the program doesn’t get funding in the 2018 budget, cuts will have to be made to the program, and that will lead to the demise of the best snowmobile program in this country.
Consider This …
During several meetings earlier this year, the phrase Return on Investment (ROI) was used by state officials, so we presented information that included comparisons and facts on our sport’s ROI.
Our state legislature has put $32 million of our tax dollars to the Pure Michigan tourism campaign. These tax dollars are being used to promote tourism in our state. State officials say that they are doing this because of the campaign’s ROI of those tax dollars. Statistics from Pure Michigan show that for every $1 spent promoting Michigan through Pure Michigan, $7 comes back to the state in terms of goods and services purchased.
We presented these facts. Out of their own pockets snowmobilers purchase trail permits to fund the snowmobile program. That number is nearly $6 million. The snowmobile program also receives another $2 million from a small return of YOUR gasoline tax. YOU paid this tax. This means that snowmobilers pay $8 million to self-fund the snowmobile program. WE pay to play.
Let’s now take what snowmobilers pay out of pocket and divide that $8 million number into snowmobiling’s economic impact on this state — $500 million.
The ROI this state receives on YOUR investment is $62.50 for every $1 YOU the snowmobiler puts into YOUR sport.
So, for every tax $1 spent by YOU on Pure Michigan, the state sees a ROI of $7. The ROI the state realizes on every dollar YOU the snowmobiler spends is $62.50. The state funds Pure Michigan because it sees an average $7 ROI of every dollar spent, and snowmobiling provides a $62.50 ROI for every dollar WE spend. Using this analogy of ROI, isn’t it about time that the state puts some tourism dollars into the snowmobile program?
Backing Up Our Needs
So, with that question we were tasked to back up our needs. That’s where the 10-year budget that MSA and the Department of Natural Resources (DNR) has just completed came in. We will be able to show them our projections and the needs for the future. We are busy completing the needs for maintenance of bridges and the need for new bridges, culverts and other projects for the maintenance of our trails. That number could be as high as $5 million.
We already know the need for equipment replacements. We did point out that snowmobilers self-fund the program to the tune of $6 million a year, and matching that was discussed.
Our governor will present his budget for 2018 fiscal year in mid-February. The budget is presented to the house and senate, who will debate it. Money for the snowmobile program needs to be in the governor’s budget request. It will be up to the legislature to see where that money comes from. Keep in mind if general fund dollars are used, this appropriation will be debated every year.
Almost Like a Christmas Gift — Some Good News!
As we all know, the snowmobile program has progressed through a very strenuous time in the last eight years. The slowdown in the economy and the extreme escalation in equipment costs have made it necessary to search for any cost savings we can find.
To propose any income changes, MSA looked at all costs associated with the program. To do this we have been meeting 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.
Let me stress, nothing was hidden or wrongly reported, only savings by 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 amounts to $1.6 million dollars.
After discussion with the DNR it was unanimously decided to spend the money on immediate repairs of existing equipment to the tune of $200,000 and to spend the remaining on new equipment.
The Snowmobile Advisory Workgroup (SAW) equipment subcommittee was immediately notified of the $1.4 million to spend. Members of that committee rolled up their sleeves and made decisions in the form of recommendations to the DNR. Their recommendation was to fund at least six new pieces of grooming equipment (power units only). Letters went out to the neediest grant sponsors. At the time of this writing, those receiving the equipment had not be notified. Look to future issues of the Michigan Snowmobile News for that list.