Michigan Officials to Lobby for $1B Of GOs to Replenish Cleanup Program

CHICAGO - Officials at Michigan's Department of Environmental Quality are poised to begin lobbying state legislators for support of measure to authorize at least $1 billion of general obligation debt to replenish a cleanup program that officials say will run out of money by the end of 2008.

If lawmakers approve the measure before adjourning for the summer, voters could consider it on the November ballot.

The bond proposal would establish a fund for grant and loan programs that finance environmental cleanup of heavily contaminated, formerly industrial "brownfield" sites across the state. While the brownfield program would require at least $1 billion in funding to last 10 years, the DEQ is likely to attach additional funding to the proposal for other programs, such as water protection, said department spokesman Robert McCann.

The brownfield programs, which include partnering with local developers, currently cost around $100 million a year, McCann said, and were last funded through a $675 million bond issue that was approved in 1998. Voters also approved an $800 million issue in 1988.

"The funding was designed to last roughly 10 years or so, and we're back at that point again," McCann said. "We've got enough money to get through the end of the year, but after this calendar year we will be out of money completely."

Acknowledging that a $1 billion GO proposal could be a hard sell given the state's current anemic economy and declining tax revenues, DEQ officials have spent the last several weeks meeting with a variety of business and municipal groups to gather support. Officials plan to present state legislators with details on the bond proposal - and a roster of supporters - within the next two weeks.

"Michigan is obviously facing tough economic times, and coming up with dollars and supporters is going to be a challenge," McCann said. "We need to let the Legislature know that everyone is on board with this."

While McCann said many groups, such as the Detroit Regional Chamber of Commerce, support the proposal, opposition has grown among a group of critics who say the brownfield program should be improved before new funding is approved.

"The program needs to be fixed," said one environmental consultant who advises large industrial firms, oil companies, and private developers on the state's environmental laws and brownfield programs.

"I'm considering voting against an environmental bond issue in Michigan for the first time in my life, and it breaks my heart," said the consultant, who asked to remain anonymous. "We all agree on the [need for] brownfields, but if it were run appropriately, we wouldn't need this much money."

Critics of the current bond proposal include the powerful Michigan Manufacturers' Association, among other groups, said the source.

Among the complaints are that the existing program has excessive bureaucracy and that there are delays in both the review process and the distribution of funds to developers involved, the source said.

The DEQ, beginning in 2005, convened a working group to suggest improvements to its cleanup and redevelopment programs, which include the brownfield program.

Last year, the group returned a series of recommendations that included expanding activity that would be eligible for brownfield funding, legislative changes that would streamline the process and the programs, creating a unified preliminary application, and allowing the diversion of a certain percentage of local tax capture to a local revolving fund.

DEQ officials said they have started to implement some of those changes and would continue to do so based on the availability of staff and resources.

Despite the criticisms, the consultant predicted that the bond proposal would ultimately win passage. "Michigan is generally an environmentalist state," he said. "My hunch is that it will be approved."

 

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