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Note: The following contentions are prominent among the arguments used by proponents of the proposal. They do not necessarily represent the views of the Mackinac Center for Public Policy.
Addresses a Critical Environmental Problem
Combined Sewer Overflows (CSOs) are one of the leading causes of water pollution in Michigan. Every year, they cause of millions of tons of raw sewage to pour into our lakes and streams. Many state environmental and conservation groups, including the Michigan Environmental Council and the Michigan United Conservation Clubs agree that fixing this problem is one of their top priorities.
The obstacle is, of course, cost. Fixing CSOs is one of the most costly environmental problems now facing Michigan and the nation. Local communities cannot be expected to foot the entire bill, and that is why groups like the Michigan Municipal League, the Michigan Townships Association, and the Southeast Michigan Council of Governments support the initiative.
Older cities face the greatest challenge, because their sewer systems were built before the problem became apparent. Now systems like Detroit’s are facing multi-billion-dollar, court-ordered infrastructure replacement costs. Passing the entire cost on to local users is not realistic because it would worsen the prospect for economic renewal in these areas, and in the long run would cost state taxpayers even more. Plus, we all suffer when beaches are closed and drinking water is threatened by water pollution resulting from CSOs.
The bond proposal would provide a stable, long term funding source for communities seeking to deal with the problem. It does so by using an existing administrative mechanism with an excellent reputation, the state revolving fund.
Helps Rural Areas
Rural areas also have water problems that would be helped by the proposal. Failing private septic systems are a recognized source of water pollution. These problems have lower priority under current state assistance criteria. The legislation authorizing the bond proposal establishes a distribution formula that would help local communities replace these failing systems, and establishes a special fund for this purpose.
May Help to Draw Federal Money
Michigan alone can’t afford to foot the entire CSO bill – federal help is needed. This initiative will signal to the feds that Michigan is serious about dealing with the problem, and this could attract more federal funding.
Helps Prevent New Sources of Pollution
The legislation authorizing the bond proposal will encourage efforts to reduce the volume of groundwater and storm water entering sewer systems. Local governments applying for state assistance must show that while in the planning stages of sewer projects they have looked at alternatives to reduce these flows, which are the ultimate source of CSOs. This means looking for ways to address the root cause of the problem, which is increasing amounts of storm water going into sewers, rather than soaking into the ground. There may be many common sense ways to reduce this, such as holding ponds in subdivisions, cisterns, disconnecting footing drains and roof downspouts from sewers, etc.
We Can Afford It
Although it sounds like a lot of money, the proposal is not likely to harm Michigan’s credit rating. Opponents point out that the proposal would double the state’s general obligation debt, but this forms a relatively small portion of the entire state debt of $14.8 billion (most of which belongs to various state authorities, paid from specified revenue sources). The Senate Fiscal Agency reported that as of 1997, 23 states had higher per-capita debt loads than Michigan. At least one of these has a credit rating equal to ours, and a couple with debt loads only slightly less also have the same high rating.
Plus, not more than 10 percent of the bonds could be sold in any one year, which limits the impact of the debt service payments on the state's general fund. Assuming a five-percent rate, the highest annual debt service payments would be $80 million, and this won’t be reached for at least ten years. Right now the entire state budget is almost $40 billion, $9.2 billion of that general fund, so this proposal will not impose an excessive burden.
For more information about the proposal, refer to the "Clean Water Committee," an umbrella-group supporting the initiative.
