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Reversion of lake-dedicated funds raises local, statewide controversy

November 30, 2010

Concern has been growing in the Culver area, as well as other Indiana lake communities, over the diversion of funds raised from Indiana boat fees and designated specifically for use in projects related to the health of Hoosier lakes. The fee, established by state legislature in 1989, is a $5 per-boat fee charged to each boat owner created for the Lake Enhancement program, whose projects are coordinated by local sub-divisions of the state Department of Natural Resources. This endeavor, known now as Lake and River Enhancement program (LARE), was expanded in 2003 via an increased fee to be divided three ways: lake projects such as wetland construction and watershed land work; dredging of sediments, invasive plant study and treatment, and animal control; and payment for local lake patrols under the Conservation Officers Marine Fund via local sheriff’s departments.
According to an article by Pete Hippensteel, vice president of technical affairs for the Steuben County Lake Council, first published in the Fort Wayne Journal Gazette and reprinted in the Lake Maxinkuckee Environmental Council’s most recent newsletter, “Indiana code (IC 6-6-11-12.5) states that these funds are not to be reverted to the general fund...the idea that a specific tax was to be used for specific uses was very instrumental in obtaining support of both boat owners and state legislators, for both the 1989 Lake Enhancement program, and the 2003 expanded LARE program.”
According to Hippensteel, some $3,700,000 in revenue has been generated by LARE funds each year over the past six years.
However, the state budget agency this past July reported $2,415,121 from the Lake Enhancement fund and $1,415,530 from the Conservation Officers Marine fund has been reverted to the state’s general fund for the current budget year. Further, says Hippensteel, the use of $1,700,000 of the 2010 LARE budget has been suspended indefinitely, in spite of officially stated uses for the fees collected from Indiana boaters.
Hippensteel says LARE monies in the past have had a major impact on Hoosier waterways “to implement best management practices on farmland in the watershed, dredge sediments from lakes, control the spread of invasive aquatic plants, construct wetlands, and select priority areas within the watersheds for treatment.”
He adds the number of requests for lake-related environmental projects more than doubles annually, “and now...these valuable programs that focus on preventing water quality problems have now lost at least one year’s revenue and appears to be losing nearly another one-half year of funding if the suspension continues.”
Lake Maxinkuckee Environmental Council Director Kathy Clark shares Hippensteel’s concern. She attended a November 18 meeting of Ithe Indiana Lakes Management Work Group, which includes representatives of IDEM, IDNR, Soil and Water Conservation, and representation of lake groups such as property owners and environmental organizations. The group is overseen by Indiana’s Natural Resources Study Committee , comprised of senators and legislators which handles “everything from mining to history,” she says, whose August meeting she attended.
One priority of the work group is examining how the group’s work ties in with the state economy.
“Our lake,” says Clark of Maxinkuckee, “really makes our economy. The town and the school (Culver Academies) probably wouldn’t be here without it. Certainly it contributes to Marshall County and the state with property taxes and sales taxes. In summer, it’s all resort-driven. If the water quality drops, all that property value (on Lake Maxinkuckee) will drop.”
Presented at the meeting was a study by Greg Biberdorf, LARE Program Manager from the IDNR’s Division of Fish and Wildlife, which indicated that in surrounding Midwestern states, water quality of lakes directly paralleled property values and related monies. A 2006 study in Ohio, for example, found among other things that, “increasing the water clarity (in lakes) by two meters was the dollar equivalent to having that house in a better school district” and the price of the home increased between four and five percent.
A foul-smelling, toxic, blue-green algal scum which killed thousands of fish earlier this year on Grand Lake St. Mary’s in Ohio caused the usual 700,000 visitors to the lake to “virtually end” this year, and resulted in a $150 million loss to lake-related businesses this summer, according to Biberdorf’s report. The Ohio DNR had to refund $172,930 in dock rental fees, and the short-term cleanup of the lake cost around $10 million, while the long-range cleanup likely will total around $100 million (water from that lake, incidentally, flows into Indiana’s Wabash River).
Clark says she was “rather taken aback” to learn that Indiana is one of the few — if not the only — Midwestern state not to have studied the economic impact of its lakes, either through the DNR or the state tourism bureau. Indiana’s Department of Tourism, she says, only tracks economic impact related to state parks, not the state’s rivers and lakes.
“Our community is based on the tax dollars that come into it,” she adds of Culver. “Sales tax from restaurants and shops, and tax dollars; I would think that would be something somebody would like to track.”
“We’re hoping we can make legislators understand that water quality is something more important than something pretty to look at,” Clark explains. “(In Culver), in addition to our summer and school trade, we have three or four major bass tournaments that occur on our lake, and we’re adding more all the time. That’s money to restaurants and gas stations and marinas. So it’s really important we try to get this (LARE) money back.”
Clark says two “very strong schools of thought” dominate those critical of the diversion of the LARE funds.
“You stop collecting this fee until it’s used for lakes again,” Clark says in describing one school of thought. “It was never meant to be a tax and now it’s being treated as such because the governor has told the budget committee to put it in the general fund...it says on (the boat) license it’s for LARE, which means it’s for water.
Clark described the second perspective as, “Just give it back to LARE, stop taking it for the general fund! The LARE program has done so much good – it took so long to get watercraft owners to back it, I’d hate to see it simply go away, it would be too hard to get it back.
“Its key that everyone contact their state legislators about this, even if you own property where there is no lake,” she emphasizes. “Did you know that only 10 percent of the counties across our state actually have freshwater public lakes? It seems the legislators in the other counties don’t have a full understanding of the economic impact of clean, healthy lakes in Indiana. We have to make the legislators understand.”
The state of Indiana, she concludes, “needs to protect the quality of its lakes and rivers; that’s key. It’s key from an economic standpoint, certainly in a town like ours, which is resort-based.”

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