Regulation’s Real-World Impact

Debates on the floor of the state Senate are generally restrained and temperate. Some might say boring. When the discussion recently turned to the budget for the Michigan Department of Environmental Quality, for a few minutes that pattern changed. Several senators expressed outrage over reports they have received of DEQ enforcement actions that appear to violate all standards of common sense, and statements detailing these were officially placed on the record (see below).

As former director of the DEQ I can attest to how the department can either help businesses comply with environmental standards in reasonable ways that allow jobs to be created, or conversely act in a manner that discourages job creation. The DEQ is the gate through which many of Michigan’s job providers must pass before they can operate. If businesses have reason to think they will face unreasonable regulators should they need an environmental permit in this state, then correcting our tax, labor and other business climate impediments won't matter: Companies will bypass Michigan, and create jobs in states offering less regulatory uncertainty.

The Legislature has granted this department tremendous power, and broad discretion in where, when and how to bring that power to bear. Without close supervision by managers who appreciate the larger challenges facing Michigan, lower level DEQ employees can sometimes fail to exercise that discretion in a way that reasonably balances costs and benefits. Actions like the ones described by these Senators suggest that this kind of supervisory perspective is lacking in the department today.

Beyond the immediate issues, these cases demonstrate that the Legislature has given away too much power to regulators. If legislators are seeking accountability for this situation, in an important sense they should start by looking in the mirror.

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March 29, 2006
State of Michigan - Journal of the Senate, No. 32
On the question of Senate Bill 1086,
Department of Environmental Quality Budget

Senators Garcia and Cropsey asked and were granted unanimous consent to make statements and moved that the statements be printed in the Journal.

The motion prevailed.

Senator Garcia's statement is as follows:

This amendment would take $8.9 million from the Department of Environmental Quality from a variety of line items.

The reason I am doing this is to express my extreme displeasure with the department in how they have carried out their duties, at least in my district. I have heard from a number of other members who have expressed their dissatisfaction as well. All I am going to do is relate the stories as I have seen them firsthand in my district.

Three stories very quickly I hope. One is a situation in downtown Howell where there was a development coming in. The department stepped in and basically prevented the project from going forward, even though it was $2 million in state and federal dollars coming to help in this development. It was road improvement and a number of other things and they refused to let this go forward because there was some contamination on the site that was going to be developed. Well, there was a plan to clean it. There was a provision in there for it. Unfortunately, though, the department said, no, we couldn't do that because the owner of the facility where the contamination occurred had to pay for it. In fact, he had to sell the property at a loss and clean it up.

Now any person who operates a business would not sell property at a loss, especially if they were forced to do so; especially when there was a plan to clean up the property, and come to find out, he had not even committed the contamination. There was some leaded gasoline. As you know, we went away from leaded gasoline sometime in the 70s, and so he didn't even commit the contamination. It had been sold to him; at least it had been sold twice thereafter. It took the individual to hire a personal environmental attorney to prove to the department that he did not commit the contamination.

Again, everyone knew that the contamination was there. We had a plan to fix it up, but the department was completely unreasonable and refused to budge. It was only after we proved to them that he did not make the contamination that they finally backed off.

Second situation, a company had gotten a permit to release a little bit of chrome into the nearby waters, within regulation. They renewed that permit in 1997 and in 1999 or 2000. The department came back and said, "Oh, by the way, the regulations have changed and you are no longer to do that, and by the way, we are going to fine you $1 million."

Well, the company took it to court. They finally came away with a settlement after much negation to about $287,000, and the department then wanted them to pay it all right away. What would have happened is they would have put this company out of business and jobs would have been lost. Instead of trying to find a reasonable solution, a payment method, by which the company could continue to operate and let jobs continue. They wanted to basically put them out of business. Well, again they went to court, they got it resolved, and they are going to have an installment system.

Last, but not least, in another part of my district, a small restaurant that used to sit near a fire station was asked to test the groundwater because there had been some seepage. The company did the testing, the city did the testing, but it was not good enough. The regulations were changing and so the case was not closed. They wanted the city and the company to do even more testing outside the boundary they had originally set. In fact, it was a moving target, would have cost the city another $10,000, money which the city didn't have, especially in tight times.

My point in all of this is we have a department that all of a sudden thinks that they can run amuck among the state and be unreasonable, unresponsible, and unresponsive, and as a result, they are putting people out of work. I just want the director and the department to pay attention and to do things right. I am all for clean air. I am all for clean water.

I certainly want to make polluters pay and do the right thing, but here is a department that needs to get their act together and do the right thing and be reasonable with people. That's all I ask, so I ask the members to support this amendment to send a message to the department.

Senator Cropsey's statement is as follows:

What this amendment does it, in essence, strips the amendment that we had adopted in the Senate Appropriations Committee that I had offered.

With that, I want to explain my motivation for doing so and explain the egregious misconduct that the Department of Environmental Quality is engaging in. I think it is egregious misconduct that is damaging the department and also the environment for all of you who are concerned about the environment.

I am withdrawing it. I want to thank the chairman of the subcommittee of Appropriations for allowing the amendment to go on in the Appropriations Committee and for also working to try and bring this department into line where it is, once again, subject to the will of the people. I am willing to give the subcommittee chairman that opportunity, and I wish her good luck. I am afraid she is going to fail, though, if that department continues on with their arrogant attitude that it has had in the past.

Let me tell you what this amendment does. It takes $50,000 out that was going to my church in my district; the church that I happen to go to. I want to explain why I offered the amendment and why I am withdrawing it.

About thirty years ago, the church expanded to build a school. Before it could build the school, the government said you have to put in a lagoon system because you don't have enough property to put in a septic system.

At that time, a lagoon system was much more expensive than putting a septic system. What happened was, because they did not have enough property or didn't think they had enough, they had it resurveyed and they found out that they actually did have enough property to put in a septic system. When they went back and said they wanted to put in a septic system, we now have enough property to do so, the government said, "No, you are going to put in a lagoon system"-flat out-that is what you are going to do." At that time, the government thought a lagoon system was a better way to handle wastewater than a septic system. So, with that ultimatum by the government, the church said, "Alright, we will put in a lagoon system."

What happened was the lagoon system was more expensive than the septic system, but the government said that that the lagoon system was more environmentally-friendly, and that's what they wanted.

They did put in a lagoon system at tremendous expense to the people of that church. It's a big lagoon system, so big, in fact, that less than 50 percent of that lagoon for sewage treatment purposes has ever been utilized. The clay lining in the lagoon was thicker, much thicker than what the specifications called for and what the consultant had requested and what the government had approved. The fact is the lagoon system was such a good lagoon system that the Department of Natural Resources would send people out there-it's only twenty miles away from here-and say, "We want you to put in a lagoon system. This is the type of lagoon system, and this church has done it. If this church can do, you can do it too. It was a model lagoon system.

Now, thirty years later, changes have come about and philosophy has changed in the Department of Environmental Quality. Philosophy has changed in the Department of Environmental Quality.

They never said the science has changed, but now all of a sudden, it is philosophically better as far as they are concerned to have a septic system instead of a lagoon system. So now the church is going to be spending, probably $30,000-$40,000-$50,000 to put in not one septic system, but about four to five different septic systems. I think that is a tremendous waste of the money of the people of this state.

My question is to the department is, "Are you really helping groundwater by having it go into a septic system where most of it will eventually feed into the groundwater or keeping it in a lagoon system?" Frankly, a lagoon system is probably much more environmentally-conscious than what a septic system is.

I want to respond to the Lansing State Journal article on this issue, where it says, "Cropsey wants state to pay for new sewage system at his church." Actually, I don't want the state to pay for it. I would much rather have the department say, "You know what, the lagoon system is much better"-but they are not going to do that because they have themselves entrenched into the idea that, You know what, we will have them put in a septic system to get it out of our hair. This is what the DEQ says, "The DEQ contends that the church needs a septic system to replace its leaky lagoon system." You know, I am a little perturbed with the Associated Press for putting that in there. I am going to tell you why. They called me up and got some quotes from me. I told them, "You know, I would be interested. If you want to give me a call back on that issue, feel free to do so." When people read this article, they assume the lagoon system is leaking. The lagoon system is performing the way it was designed to perform. For the department to come and say it is leaking and have no data in order to back that up, it is absolutely, totally irresponsible and they know it. There are wells in the area that have been tested and will continue to be tested that the lagoon is not leaking. I am going to tell you this: When a septic system goes in, there is going to be a whole lot more of that water, that sewage water that is going into the groundwater system than what there ever would be with a lagoon system.

So do I question the integrity of this department? When I read articles like this, you better believe I do. The article goes on and says, "We are doing everything that the Legislature told us to do." I think that is a bunch of bologna too because they told me their philosophy has changed as far as the difference between the septic systems and the lagoon systems. So now the church is going to be spending somewhere between $25,000 and $50,000 to put in a septic system, the technology of which is far older than it is for lagoon systems. I think it has far greater hazard to groundwater than a lagoon system does, but yet, this is our Department of Environmental Quality, which ought to be called the department of environmental derogation and job killing.

I hope the church does not have to totally dismantle the lagoon. I say it for this reason: Because probably in another twenty-five to thirty years they will have a change in philosophy again and say, "You know what, a lagoon system probably was better than a septic system," and have you build it all over again. This department is out of control.

This is one example. I can go back to my office and I can give you at least one example from every one of my four counties on the department that is out of control.

I do hope that the chairman of the subcommittee is able to get some of her legislation through to hold this department accountable because right now it is running roughshod. I hate to say it, but there are certain people in the press who just love anything that says environment and anything that the DEQ does is above reproach according to them, apparently, or at least above question. I would just ask the press to start to question the Department of Environmental Quality and ask them why they are doing what they are doing. With that, I reluctantly ask your support of the amendment.


Russ Harding is senior environmental policy analyst with the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich. Permission to reprint in whole or in part is hereby granted, provided that the author and the Center are properly cited.