Exploring the Feasibility of Perpetual Funding for Perpetual Environmental Problems

1. ALTERNATIVE FUNDING MECHANISMSFOR THEGREAT LAKES FISHERY COMMISSION:Trust Funds vs. Annual Appropriations Exploring the Feasibility of Perpetual Funding for Perpetual Environmental Problems Authors: Ted Lawrence and Melissa PelkeyPracticum Committee: Ted Parson (advisor) and Chris GoddardAffiliations: University of Michigan School of Natural Resources & EnvironmentGreat Lakes Fishery Commission

2. AbstractThe Great Lakes Fishery Commission (GLFC) is an bi-national organization established by the United States and Canada through the 1954 Convention on Great Lakes Fisheries. The GLFC has the responsibility to coordinate fisheries research, control sea lampreys, and facilitate implementation of the Joint Strategic Plan for Management of Great Lakes Fisheries. Currently the GLFC pursues funding through the normal annual appropriations process of both the United States Congress and Canadian Parliament. Historical analysis of the GLFC’s work has shown that sea lampreys are a persistent problem for the Great Lakes fishery and control will require a steady source of funds indefinitely. Feasibility analysis methods included a review of cases where government organizations and programs have been financed by trust funds, analysis of the politics of all actors involved in appropriations for sea lamprey control, and content analysis of appropriations and legislative documents. Given that the vast majority of non-entitlement federal organizations funded through annual appropriations, the case studies attempt to determine why some programs are funded by trust funds.

3. Created in 1954 by convention between the US and Canada to control the sea lamprey invasion in the Great Lakes. Before sea lamprey were brought under control, they devastated the Great Lakes fishery, driving harvest to nearly nothing and changing a way of life for many. Since its inception, the GLFC has brought the Great Lakes commercial fishery back and has fought successfully to maintain ecosystem health. Now looking to additionally fight Asian Carp that are invading from the Mississippi. History of the GLFC The Great Lakes Fishery Commission has been fighting invasive species and keeping the ecosystem healthy in the Great Lakes for 50 years.

4. to formulate a research program to identify measures to enhance the sustained productivity of any Great Lakes fish stock of common concern; to coordinate research made pursuant to such programs and, if necessary, to undertake such research itself; to recommend appropriate measures to the contracting parties on the basis of the findings of such research programs; to formulate and implement a comprehensive sea lamprey control program; and to publish or authorize the publication of scientific and other information obtained by the commission in the performance of its duties. Mandate of the GLFC The Convention charged the commission with five major duties:

5. Funding the GLFC As established in the treaty, the GLFC is funded by annual appropriations from both the US and Canadian governments: • US Contribution = 67% ($12,168,000 in 2003) • Canadian Contribution = 33% ( $3,869,800 in 2003) For total operating funds of approximately $16 million Problem: Any change that results in insufficient funding would reduce the efficacy of the GLFC and its primary function of sea lamprey suppression, causing further harm to the health of the Great Lakes ecosystem and the livelihood of those who rely on the fishery.

6. Research QuestionHow can the GLFC capitalize its charitable trust fund from federal legislative bodies, therefore establishing a perpetual funding mechanism that can weather adverse political climates? Core objectives to analyze and examine: • Historical and current work and the funding mechanism of the GLFC, • Organizations, commissions and other entities that are or have dealt with similar perpetual problems, having or seeking similar funding mechanisms, • Annual appropriations of the US Congress and Canadian Parliament, • The US and Canadian trust fund framework, and • Content analysis of the US and Canadian appropriations process.

7. Methodology Using the knowledge from the objectives, four specific questions were established to answer the research question. • What are the problems with annual appropriations for an established organization such as the GLFC? • What precedent has been set for federal capitalization of trust funds? • What are the options for maintaining a trust fund that is capitalized with federal money? • Who in Congress or Parliament would champion a bill to support the GLFC’s mission to utilize a trust fund for all operating costs?

8. Problems with Current Funding Structure • Current funding practices, using federal annual appropriations, are subject to political and governmental institutions as well as social and economic fluctuations. • Although the Great Lakes Fishery Commission has been functioning since 1955 using annual appropriations, the problem of current invasive species as well as potential invasive species will last well into the next century. • A reduction of any kind in an organization’s funding would reduce the efficacy of its primary function or mitigation, and thus potentially cause more harm to the target ecosystem and the livelihood of those who rely on the surrounding resources. • Energy spent on lobbying equals energy taken away from bettering the resource.

9. Options for a Federally Financed Trust Fund Federal Trust Fund - The government, being both the trustee and the beneficiary, can unilaterally change the terms of a trust fund's administration; this can happen due to a changing federal political climate or interests. This leads to an unstable, unreliable source of funding for a perpetual long-term problem. State Trust Fund - Though less vulnerable to federal intervention, unless constitutionally amended, a state trust is susceptible to changing state political climate. Though not extensively studied, a state trust fund in a multi-state, bi-national common resource, could pose numerous problems concerning equity, control and palpable benefits to each stakeholder. Private/Charitable Trust Fund - A private trust fund clearly separates the beneficiaries and the trustees. Control of funds is established by the entity in charge, and monitored by the beneficiary, making the process transparent, and establishing clear goals for the funding.

10. There is little to no evidence in the past twenty five years of legislation that indicates Congress has appropriated, authorized, or even introduced bills to capitalize or create private trust funds for small budgets such as the GLFC. Existing federal trust funds in the United States require billion or even trillion dollar appropriations. It is important to note that each of these funds (see right) is allocated to a particular public issue. It is up to the established department of the executive branch (e.g., Department of Transportation, Department of Energy, etc.) to distribute money for programs outlined by the appropriate fund. Canadian financing of private trust funds is currently being investigated Highway Fund Airport and Airway Fund Inland Waterway Fund Leaking Underground Storage Tank Fund Hazardous Substance Superfund Oil Spill Liability Fund Vaccine Injury Compensation Fund Harbor Maintenance Fund Black Lung Disability Fund Aquatic Resources Fund Precedent US Federal Trust Fund Examples

11. Legislative Champions Issues • Political climate is not a factor that an organization can control, and must be measured constantly to feel when the right time might be to confront a federal legislative body with a request such as the GLFC’s. • Similarly difficult was compiling the comments of various legislative community members, analyzing which arguments were viable with respect to this project. • Examples of this difficulty resonate from the fact that the research team did not find any legislation that addressed the federal government financing a private trust fund. • When political control changes in Canada, support for issues can change at a moment’s notice.

12. Legislative Champions Advantages • The GLFC: • Commissioners (fund trustees) are executively appointed on a rolling basis, across administrations • Is transparent • Budget and contributions on web site • Annual projects and expenditures on web site • Is finite • The site and jurisdiction are measurable • The mandates were established in 1954 • These qualities make the GLFC Trust Fund a secure investment for legislators who may be concerned with surrendering control of GLFC appropriations.

13. Options and Recommendations • There are three options for financing the GLFC Trust Fund: • Fully funded by a lump sum appropriation for all operating costs ($16-20 million per year) • Choose specific mandate (or mandates) to request funding for, smaller lump sum than “fully funded” • Finance supplemental continuing research not currently in the GLFC Annual Budget • The preferred option will be what the research has shown to be the most profitable for the Great Lakes Fishery and ecosystem while still politically practical