Gun sales, hunter and angler numbers could affect DNR revenues
Feb 18, 2018 08:28AM ● Published by Editor
By Sam Cook of The Duluth News Tribune - February 18, 2018
Officials at the Minnesota Department of Natural Resources are keeping their eyes on nationwide trends in firearms sales. Those sales appear to be declining after several robust years over the past decade.
Firearms sales are important to the DNR because each year, federal excise tax revenues from sporting firearms and ammunition sales are returned to states, earmarked for projects that benefit wildlife.
"It's still at relatively high levels, but it could drop some, maybe up to 10 percent based on what people are purchasing in coming months," said Pat Rivers, deputy director of the DNR's Fish and Wildlife Division. "If federal dollars do go down, it will make it more challenging to keep the Game and Fish Fund solvent."
The number of requests to the FBI for federal background checks on firearms sales has dropped about 7 percent from since Oct. 1, Rivers said. That could be an indication of where excise tax revenues might be headed.
Since passage of the federal Pittman-Robertson Act in 1937, excise taxes on sporting arms and ammunition have been returned to states in a process called apportionment. Each state's apportionment is based generally on the size of the state and how many hunting licenses it sells. A similar program, initiated in 1950 with the passage of the Dingell-Johnson Act, benefits state fisheries programs.
The excise tax revenues are an important source of funding to state fish and wildlife agencies. Through the 1990s and early 2000s, Minnesota received about $12 million to $18 million annually in apportionments for fish and wildlife projects from federal excise tax revenues, according to DNR records. Starting in 2009, sales of firearms and ammunition began increasing dramatically. As a result, the DNR's revenues from excise tax apportionments for fish and wildlife projects have ranged from $25 million to $37 million annually in the past decade.
Excise tax revenues, on average, accounted for about 37 percent of the DNR's Fish and Wildlife Division budget from 2012 to 2017, Rivers said. The majority of the division's budget comes from the sale of hunting and fishing licenses.
In order to use the federal excise tax revenues, states must first spend their own money on wildlife or fisheries projects. The states may then apply to be reimbursed up to 75 percent of the cost for qualifying projects with excise tax revenues.
Gun sales history
In the Twin Ports, gun dealers offer a mixed review of recent gun and ammunition sales. Pat Kukull, owner of Superior Shooters Supply in Superior, said gun and ammunition sales spiked during the eight years that Barack Obama was president.
"You'd have to have been under a rock in the years of the Obama administration not to know there was out-of-control, crazy, political fear-buying," Kukull said. "It was absolutely insane. This was not normal. Now, with the current administration, things are back to normal. Have gun sales gone down? Of course, they have."
Sales of handguns and AR-style rifles are down, and people are not hoarding ammunition like they were, Kukull said.
But Scott VanValkenburg, a gun dealer at Fisherman's Corner in Pike Lake, said his sales are holding fairly steady.
"Handguns are as steady as ever," he said. "We've sold more high-end shotguns, a lot of rabbit guns. I can't complain."
But he, too, has seen a change among gun owners since President Donald Trump was elected.
"They're definitely not as scared as they were at one time that they were going to lose their rights (to own guns)," VanValkenburg said. "(But) I've still got a lot of guys coming in thinking they've got to buy before it changes."
On Monday, Remington, one of the oldest gun companies in the world, announced plans to file for Chapter 11 bankruptcy protection. The plan would allow Remington Outdoor Co. to stay in business while restructuring its debt.
Federal funds important
The increased excise tax revenues in recent years have been important to the DNR, said John Lenczewski, executive director of Minnesota Trout Unlimited, who chairs the citizens' Budgetary Oversight Committee that monitors the Game and Fish Fund.
"I do know that that has been what's kept the Game and Fish Fund at a healthier level," Lenczewski said. "They (DNR officials) were sort of counting on it, and without it, they'd have had less money. It would have really put them in a bind. They would have had to cut projects and staff even more than they did already."
Currently, about 40 DNR positions in wildlife and about 30 more in fisheries remain unfilled, Rivers said.
"In the next two years, we likely won't fill all of them," he said.
The state legislature last year approved selected DNR license fee increases and some other fee increases.
"For this biennium, we're in good shape," Rivers said. "The problem is that our hunters and anglers are getting older every year. That's going to be a struggle for us. It's happening all across the country. It's a challenging problem when the budget is based on hunting and fishing license dollars."