The issue pops up every few years, especially in times of economic, shall we say, uncertainty. State or local governing bodies decide that it would be cheaper to grow their own nursery products, sometimes for specific projects, sometimes just to save a few bucks. Often, the decision is made without input from those who stand to lose the most – the state’s tax-paying, privately owned nurseries.

In the October 1, 1989, issue, we find that Wisconsin growers challenged the state – with the help of the state itself.

Wisconsin Audit Bureau Censures State-Run Nurseries

Illegal pricing structures and unlawful fund transfers were just two of the inappropriate practices revealed by the Wisconsin Legislative Audit Bureau in a report about the state nursery program operated by the Department of Natural Resources.

The audit vindicates claims made by the Wisconsin Nurserymen’s Association and followed the WNA’s detailed request for the action.

WNA President George Pinney applauded the efforts of the audit bureau staff. In the Wisconsin Landscape Federation Inc. newsletter, Pinney said: “The report essentially confirms many of our beliefs, gives credence to our request for the audit and clearly suggests that the legislature consider a significant reduction in the operations of state nurseries and even ultimately a total phase-out of one or all of these facilities.”

According to Joe Phillips, executive director of the WNA, the audit highlights several practices the association felt were inappropriate or in violation of state statutes.

The audit criticizes the DNR’s participation in determining policies governing the Conservation Reserve Program and indicts the federal Agricultural Stabilization and Conservation Service for relying on one-sided documents regarding tree species and prices. They recommended using only species with “commercial timber value,” which virtually shut the nursery industry out of the CRP, Phillips says.

“By saying ‘We should use these species,’ that pretty well locked the private sector out of the market,” Phillips says, explaining that the recommended species were ones primarily raised only by the state nurseries. Red and white pines were among those recommended.

Joseph Frank, the DNR’s director of the bureau of forestry, which runs the state nurseries, says competition between state- and private-run nurseries is not a factor. “Our product is seedling stock for reforestation,” Frank says. “That’s an area private production nurseries have just not moved into.

“We’ve been careful, too, in making sure that our stock is not used for Christmas trees or ornamental uses.”

That doesn’t mean Frank believes the audit failed to make any legitimate points. “The [pricing] system we used we believed was adequate,” Frank explains, “but the issues they raised [concerning pricing] were valid. We have no problem with it.”

Under a 1987 law, state nurseries were supposed to consider production and administration costs (including depreciation) when determining prices. “They did not follow the provisions,” Phillips says, “putting us [at] a disadvantage.”

Finally, Phillips says, the DNR requested funding to expand its seedlings program after the expansion had already taken place. According to the report, the “Department internally transferred $133,000 from the forestry fund in order for increased seeding to take place.” The audit further noted that the transferred funds had been earmarked for other services, including fire protection.

Phillips says the WNA agrees with the audit’s opinion that the requested funds should be denied.

The DNR’s Frank said that private nursery involvement in the CRP program was discussed in the legislature, but, in the end, the CRP was not designed for the private sector.

Phillips says the audit should result in a reprimand of the DNR by the legislature. “There’s a good possibility, too, that the legislature will deny funding requests,” Phillips says. If such a cutback does not occur, the WNA may ask the governor to veto DNR funding requests.