Michigan senator introduces bill to fund $2B in water cleanups

State Sen. Margaret O’Brien, R-Portage, has introduced legislation to create a $2 billion bond program to pay for water and sewer system repairs.

Editor's note: This story has been updated to include comments from Sen. Margaret O'Brien. The story has also been corrected to note the correct total of the 1998 Clean Michigan Initiative: $675 million. 

LANSING — A Republican state lawmaker wants Michigan to borrow up to $2 billion to clean thousands of polluted sites, fix water and sewer systems and remove lead hazards.

Sen. Margaret O'Brien of Portage on Wednesday introduced legislation to finance such projects through a bonding program that would require voter approval.

The legislation comes as Michigan’s chief funding source for contamination cleanups has largely dried up: The Clean Michigan Initiative, a $675 million bonding program that voters approved in 1998.

    Her proposal follows one from term-limited Gov. Rick Snyder, who wants to pay for cleanups and infrastructure improvements by increasing fees on landfill dumping and water utility bills.

    O'Brien told Bridge in an interview that she has been considering the idea for at least a year. She said she prefers bonding to Snyder's proposal to increase tipping fees because "it can't be diverted to a different cause or issue."

    Bond revenue, she said, is protected for its intended purpose and future legislators could not draw from it to plug budget holes during shortfalls.


    "I'm all for helping local communities, but let's use existing resources or let's look at a bond, which is something that we can tackle systematically," O'Brien said. "I have to introduce a bill to get the conversation going."

    The legislation comes amid increased fears about groundwater contamination and environmental cleanups.

    The Michigan Department of Environmental Quality is tracking about 3,000 polluted sites that are likely “orphans,” meaning the original polluter is gone and taxpayers must pay for cleanups.

    And the state is increasingly finding PFAS — a group of hazardous “forever chemicals” used to manufacture everything from Teflon and Scotchgard water repellent to firefighting foam — in Michigan water supplies.

    This summer, PFAS was detected at levels more than 20 times higher than the U.S. Environmental Protection Agency’s advisory limit in Parchment, a Kalamazoo County community in O’Brien’s district. Her state Senate website includes information about water distribution for residents.

    Meanwhile, state leaders are trying to fix deteriorating water and sewer systems. Billions of gallons of untreated sewage flow into state waterways each year, and decades of deferred maintenance have left Michigan short about $800 million per year to meet water and sewer system needs, a commission assembled by Snyder estimated.

    Additionally, new regulations spurred by the Flint water crisis require water utilities in 2021 to begin replacing all of their lead service lines — at a cost of thousands of dollars per line.

    O’Brien’s bill, to be called the “Great Waters, Great Lands Bond Authorization Act,” would borrow the $2 billion by issuing general obligation bonds to fund repairs to drinking water, sewage, stormwater and drainage systems. The money also would fund cleanups of environmental contaminants and lead abatement, according to the bill.

    Money to repay the bond would come from Michigan’s general fund.

    Voters would have to approve the bond at the next general election. That likely means it wouldn’t go before voters sooner than 2020, should the bill pass the Legislature and be signed by Snyder.

    O’Brien is running for re-election in a rematch with Democrat Sean McCann, in what was a tight race in 2014.

    Her proposal comes a week after Snyder announced the Michigan Farm Bureau and Michigan Chamber of Commerce back his proposals to raise funds for cleanups and drinking water through fee increases.

    State Rep. Larry Inman, R-Traverse City, and state Sen. Mike Nofs, R-Battle Creek, proposed bills in April to enact Snyder’s plan, which would also seek to boost Michigan’s comparatively low recycling rate.

    Snyder wants to raise up to $69 million by increasing a 36 cent-per-ton fee on trash haulers that makes Michigan one of the North America’s most attractive destinations for out-of-state dumping.

    The increase would cost households no more than $3.99 per year, according to Snyder’s office.

    Separately, he’s proposing to raise $110 million each year through new water system fees. Under that proposal, which would expire in 2041, households would pay no more than $20 per year, and businesses would pay no more than $400 annually.

    “It’s tough to ask your citizens to pay a fee. But this is about providing core services,” Snyder said at a press conference last Thursday.

    Snyder has called his proposals preferable to new bonds. At the end of 2017, Michigan still had more than $325 million in Clean Michigan Initiative debt to pay back.

    For every dollar bonded, taxpayers will ultimately pay back $1.50, including interest and other overhead costs, Michigan Department of Treasury officials told lawmakers last year.

    Michigan’s infrastructure ranks near the bottom of states. Its water systems earned middling to near-failing grades by the American Society of Civil Engineers on its most recent state infrastructure scorecard.

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    Comments

    John Q. Public
    Wed, 09/05/2018 - 9:23pm

    Ah, my favorite time of the legislative term--when the incumbents discover they aren't shoo-ins for another term only eight weeks from Election Day, and after twenty obsequious months kow-towing to party leadership and their corporate benefactors, suddenly discover legislation somewhat in the public interest.

    MWG
    Thu, 09/06/2018 - 9:55am

    Funny how that works, isn't it?

    Bob
    Thu, 09/06/2018 - 11:06am

    The clean Michigan Bond program was $675 million (not billion)

    Maureen
    Thu, 09/06/2018 - 3:51pm

    It said "million."

    John Q. Public
    Thu, 09/06/2018 - 7:52pm

    Read these two story excerpts in concert with each other:

    "Bond revenue, (O'Brien) said, is protected for its intended purpose and future legislators could not draw from it to plug budget holes during shortfalls."

    "For every dollar bonded, taxpayers will ultimately pay back $1.50, including interest and other overhead costs, Michigan Department of Treasury officials told lawmakers last year."

    Now consider the conclusion: We get the option to pay a 50% premium on the costs to cover the risk that politicians can't be trusted to spend our money the way we tell them we want it to be spent. Instead of outrage at that prospect, most will simply consider it a wise insurance investment.

    Barry Visel
    Fri, 09/07/2018 - 7:51am

    This report says O’Brien’s bond would be paid back using general fund revenue...so, which general fund line item(s) would be cut to pay for this?