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Great Lakes Article:

Ballot issues: Sewer bond
David Poulson
Lansing Bureau
Posted 10/08/2002

LANSING -- With six environmental proposals since 1968 getting overwhelming voter support, approving a $1 billion state bond to keep sewage out of Michigan's waters should be a piece of cake.

But backers of the plan fear fallout from the more controversial proposals sharing the ballot.

"(Voters) might vote 'no' out of confusion," said Sen. Ken Sikkema, R-Grandville. "It would be tragic if for the first time in 30 years an environmental proposal went down the tubes."

Also on voters' minds is a still-struggling economy that crimps the state revenues needed to pay back the bond. Those annual costs range from $12.7 million to $63.6 million during a 20-year payback, according to a recent House Fiscal Agency analysis. That's almost as much as the $69.4 million annual general fund appropriation for the entire Department of Environmental Quality.

Yet the environment and keeping the Great Lakes free of sewage that can prompt beach closings is a popular cause. In 1968, Michigan approved a $335 million bond for sewer upgrades by a more than 2-1 margin. As one of the first states to tackle an overwhelming problem, Michigan helped encourage Congress to plow billions of federal dollars into sewer systems nationwide, said David Dempsey, a longtime Michigan environmental activist who is writing a book about the Great Lakes.

Once again, Michigan finds itself leading the effort to repairing aging sewers.

"Most other states are pointing fingers at state and federal lawmakers and expect each to come up with the money," said Cyndi Roper, Michigan program director for the environmental group Clean Water Action. "That's a good way to keep anything from happening. We're probably the first state that has really stepped up to the plate."

Unlike the 1960s, it's doubtful that passing the bond will shake loose additional federal dollars, as some of the proposal backers had hoped. Rising federal deficits and competing needs like Social Security and the war on terrorism mean federal sewer aid is unlikely.

"We decided with this proposal that if we're going to protect one of Michigan's most important assets -- clean fresh water -- we're going to have to go it alone," said Sikkema, who sponsored the legislation putting the issue on the ballot.

There is no organized opposition to the measure. But the Mackinac Center, a Midland-based think tank that is neutral on the issue, has raised questions of whether local sewer problems should be solved by burdening all state taxpayers. Urban and rural runoff and waste from birds also contribute pollution, said Jack McHugh, the center's legislative analyst. Focusing only on sewers may have little impact on beach closings.

"Given these realities, voters should think long and hard before taking on another huge liability," McHugh said.

Last year communities applied for $325 million in sewer loans from a state fund with only $199 million to give out.

Estimates of the need vary:

  • Public Sector Consultants, a Lansing consulting firm that analyzed sewer needs for a coalition of construction, municipal and environmental groups, estimated the statewide demand for money at between $2.7 billion and $5.8 billion for the next 20 years.

  • The Southeast Michigan Council of Governments estimated the need for seven Detroit-area counties at $14.5 billion to $26.6 billion over 30 years, although that includes entire new systems for communities expected to sprawl away from current service.

  • The state Auditor General put statewide need at $6.7 billion to $10.6 billion over 20 years.

State officials say they can leverage a $1 billion bond into two to four times as much through the state's revolving fund for sewer repairs. The state charges low interest -- about 2.5 percent now -- and communities pay the money back so that it can be loaned again.

Right now that fund gets between $57 million to $60 million a year in federal money and about $11 million from the state. Since 1989, the fund has loaned out $1.7 billion for sewer improvements.

If the ballot proposal passes, 90 percent of the new money will augment that revolving fund. The rest is earmarked for loans to fix faulty septic tanks and to keep clean water out of sewers.

The newly augmented sewer fund could make about $350 million a year available for at least 10 years. The Auditor General had pegged annual need at between $330 million and $550 million over 20 years.

"You can never say this proposal is going to solve the problem, but you can come pretty close," Sikkema said.

Even if voters authorize the treasurer to borrow the money, there is no guarantee that will happen. This year, fear of jeopardizing the state's credit rating kept Gov. John Engler from floating bonds voters approved for monitoring sewage at beaches and cleaning up contaminated sites.

That could happen again, although the Republican and Democratic gubernatorial candidates support the measure and the proposal doesn't kick in until 2004, when backers hope the economy has improved.

On the Web, supporters of the proposal are at www.michigancleanwater.com; the Mackinac Center gives pro and con arguments at http://www.mackinac.org/article.asp?ID=4673. An analysis by the nonprofit, nonpartisan Citizens Research Council can be found at http://www.crcmich.org/PUBLICAT/2000s/2002/props1-4/props1-4.html.

Contact David Poulson at (517) 487-8888 or e-mail him at dpoulson@boothnewspapers.com.

PROPOSAL 02-2

A PROPOSAL TO AUTHORIZE BONDS FOR SEWAGE TREATMENT WORKS PROJECTS, STORM WATER PROJECTS AND WATER POLLUTION PROJECTS

The proposal would:

*Authorize the State of Michigan to borrow a sum not to exceed $1 billion to improve the quality of the waters of the state by financing sewage treatment works projects, storm water projects and water pollution projects.

*Authorize the state to issue general obligation bonds pledging the full faith and credit of the state for the payment of principal and interest on the bonds.

*Provide for repayment of the bonds from the general fund of the state.

Should this proposal be adopted?



© 2002 Booth Newspapers. Used with permission

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