issues: Sewer bond David Poulson Lansing Bureau
-- 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
"(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
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
"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
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
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
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
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
"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 email@example.com.
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.
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