Preserving the state’s stewardship program
The Warren Knowles-Gaylord Nelson Stewardship Program began with the passage of a law authorizing the state to issue bonds to buy land in 1989.
Through this program, the Department of Natural Resources acquires land and provides grants to local units of governments and non-profit organizations to buy land, easements and outdoor recreational property development.
Under current law, the state issues 20-year, tax-exempt bonds to purchase land through the Stewardship program and to make local grants. The bonds are repaid primarily from the state’s general fund, with some supplemental revenue coming from the forestry account. The forestry accounts portion of the annual bond repayment is $13.5 million.
Although the program was originally set to end in the 2009-10 fiscal year, the 2007 state budget extended the sunset date of the program to 2019-20 and increased the allowable annual bonding from $60 million to $86 million beginning in 2010-11.
The 2011 state budget returned the annual bonding level to $60 million.
Since the inception of the Stewardship program, the question of how much money should the state borrow to buy land has been regularly debated.
The payments on the Stewardship program debt are roughly $90 million a year, or $1.6 million a week.
In its budget deliberations this month, the Joint Finance Committee was faced with balancing the desire to preserve land for public use with concerns that tying up $90 million a year makes it difficult to fund other valued programs in the state.
The Stewardship bonds, used to preserve land and make improvements, are general obligation bonds, meaning that they are backed by the full faith and credit of state.
This means that the state is obligated to find a way to pay them, even if it means that other parts of state government have to be cut or taxes raised. You can see why the level of bonding is debated so frequently.
Gov. Scott Walker proposed keeping the Stewardship bonding level at $60 million a year through 2019-20.
Many members of the Joint Finance Committee expressed concerns that this level of bonding was too high and makes the program unsustainable. Instead, the committee voted to authorize $47.5 million in bonding in the first year of the budget and $54.5 million in the second.
The committee also voted to authorize up to $50 million in bonding annually between fiscal years 2016-17 and fiscal years 2019-20.
These changes reduce the bonding authority of the program by $63.5 million and by doing so, help preserve the program by ensuring that the state can afford to make the required bond payments.
The committee accepted the governor’s recommendation to use $14 million in bonding authority over the biennium to renovate the Kettle Moraine Springs fish hatchery, but voted to require the DNR to prepare a report on the need for the renovation.
The report must include if a private enterprise could address the department’s fish stocking needs in an economically feasible manner and identify any expenditure proposal for the renovation, explaining how this proposal would reduce the need for bonding.
The report must be sent to the Joint Finance Committee by June 30, 2014, and the DNR cannot issue any bonds for the renovation until it submits a request to the committee.
The Stewardship program is an important piece of our conservation efforts in Wisconsin. The committee’s actions will help us maintain the public land the state owns while protecting taxpayers.
The Joint Finance Committee’s work on the state’s biennial budget is in its final weeks. We expect to finish our work in the next two weeks. The budget then goes to each legislative house, where it must be approved in identical form before it can be sent to the governor for action.