Russ Harding, director of the Mackinac Center's Property Rights Network and former director of the Michigan Department of Environmental Quality, first proposed ending the state's separate wetland enforcement regime in 2005. In her 2009 State of the State Address, Gov. Granholm concurred, saying, "I will recommend returning enforcement of wetlands protections to the federal government[,] where more staff exists to effectively safeguard our natural resources."
Harding has offered two important reasons why this makes sense.
First is the one the governor cited: It would save money. The Army Corps of Engineers operates wetland programs in every state except Michigan and New Jersey. Harding notes that the Corps has streamlined its process, so that there is no advantage to wetlands permit applicants in having the state operate the program. In 2007, Harding estimated that returning the program to the federal government could save between $1 million and $2 million. The governor agrees. In her executive budget, she stated, "[A]n ongoing savings of $2.1 million will accrue to the state general fund. ..."
The second reason is that Michigan's operation of the program also imposes another kind of cost: lost jobs. Overzealous interpretation of state wetland regulations by Michigan Department of Environmental Quality staff has contributed to Michigan's reputation among investors and job providers as a state to avoid. As Harding has written, if businesses think they may face unreasonable regulatory enforcement when they need an environmental permit in this state, they will bypass Michigan and create jobs in locations offering reasonable and predictable regulation.
In 2008, the Mackinac Center published "Hart Enterprises: A Wetland Case Study," which explored an example of such abuse. Hart Enterprises is a growing, cutting-edge medical device manufacturer employing around 100 people and headquartered outside Grand Rapids. In 2006, the DEQ tried to stop the company when it began to expand its parking lot to accommodate its larger workforce. The DEQ claimed the area of the proposed expansion was a wetland, a view that came as a surprise to Hart Enterprises. The area had long been subject to civil engineering, and it was part of a parcel zoned for industrial activity. Moreover, the area was only occasionally wet, and neither local officials nor the environmental or construction professionals engaged in the project had warned of a wetland there.
That was the beginning of a long and painful saga for Hart Enterprises owner Alan Taylor over a so-called "wetland" that is, according to the DEQ, less than one acre in size. In September 2008, Taylor, who had proceeded with the expansion and refused to file for a wetland permit, was convicted in Kent County District Court for the criminal misdemeanor of filling in a wetland. The case is under appeal, but whatever the result, such decisions send a message to potential job providers about Michigan's regulatory climate. The ultimate losers are those on Michigan's growing unemployment rolls. As Harding and LaFaive have explained, "Denial of a required environmental permit means no business, no jobs and no hope for Michigan's failing economy and struggling workforce. It's the equivalent of a 100 percent business tax rate. ..."
Fundamentally, Michigan's wetland enforcement decisions are impossible to predict. Although there is a DEQ "inventory" of Michigan wetlands, it contains a warning that its map of the state's wetlands is not accurate, and that it is not legally binding.[*] The DEQ states that the only way to determine whether a resident's home or business property qualifies as a wetland is to apply for a wetland permit for the area and allow a DEQ official to inspect it for a binding determination.29 Worse, the state's wetland enforcement does not even have the advantage of shielding Michigan residents from the possibility of independent, aggressive federal enforcement of stringent federal wetland regulations.
Leaving Michigan's wetland enforcement exclusively to the federal government would at least put business and property owners in Michigan on an equal footing with those in 48 other states, since Michiganders would need to deal with only one unpredictable enforcement regime, rather than two. Exclusive federal enforcement would also present potential investors from outside Michigan with only federal wetland regulation, a system they already know. Thus, this recommendation by the governor would produce a benefit not just for the state budget, but for the state's economy as well.
[*] Specifically, the language says, "The wetland inventory maps show potential and approximate locations of wetlands and wetland conditions. ... The maps are not intended to be used to determine the specific locations and jurisdictional boundaries of wetlands for regulatory purposes. Only an on-site evaluation performed by the DEQ in accordance with Part 303 can be used for jurisdictional determinations" (emphasis in original). See "Wetland Inventory Maps," Michigan Department of Environmental Quality, http://www.michigan.gov/deq/0,1607,7-135-3313_3687-11178--,00.html (accessed May 27, 2009). Earlier language was even more explicit; see Russ Harding, "Hart Enterprises: A Wetland Case Study," (Mackinac Center for Public Policy, 2008), 12, http://www.mackinac.org/archives/2008/sp2008-04.pdf, (accessed May 27, 2009).