Is the Governor’s Water Legacy Act All Wet?

Gov. Jennifer Granholm is seeking to increase regulation of groundwater use through a costly and intrusive permit regime. The proposed changes, if enacted, would upend longstanding water rights and further weaken Michigan’s economy.

According to the governor, Michigan currently lags other Great Lakes states in controlling groundwater withdrawals and preventing diversions. Her Water Legacy Act, now pending in the Legislature, supposedly would fulfill the state’s obligations to protect a threatened natural resource and bring Michigan into compliance with the so-called Annex 2001, a regulatory code under consideration by the eight states and two Canadian provinces that cooperatively exercise jurisdiction over the Great Lakes.

“We are the only state that hasn’t lived up to its end of the bargain,” the governor stated in unveiling her proposal to the Legislature. “If we do not take action to regulate withdrawals of water from the Great Lakes Basin, those who are already eyeing our treasured lakes as the solution to their water shortages will begin arriving with their pumps and hoses to take their bounty home.”

The importance of water resources to Michigan and its neighbors demands caution in its regulation. The Mackinac Center for Public Policy thus examined Gov. Granholm’s arguments for so radical a change in water law, as well as the likely consequences of her regulatory crackdown. Our findings argue against the Act.

The proposed legislation would grant the Department of Environmental Quality the discretion to bar groundwater use if regulators deem an applicant’s “5-year water management and conservation plan” or its “water management practices” as not “beneficial” — whatever that means. Such broad and nebulous authority would be subject to a wide range of interpretation and hence, bureaucratic arbitrariness. We can expect plenty of costly court battles. Compliance would likely encumber thousands of Michigan businesses, including factories, farms and even recreational facilities, as well as public water systems.

But Michigan is not a regulatory backwater, as the governor contends. Multiple legal mechanisms already exist to protect groundwater and limit diversions. Our review of statutes throughout the region found only a single instance of a regulatory scheme as stringent as the one being proposed by the governor. Moreover, her proposals to restrict water diversions far exceed the draft rules of Annex 2001.

Also inaccurate is the governor’s characterization of the Great Lakes as “more threatened today than perhaps they have ever been.” In fact, more water is diverted into the Great Lakes than is siphoned out, and groundwater supplies are regularly replenished and remain abundant. The Michigan Department of Environmental Quality recently characterized the water quality of Lakes Superior, Michigan, Huron and Erie as “good to excellent.”

Notably lacking from the governor’s plan are the scientific underpinnings so necessary for sound policy. Yet in a matter of months, a statewide mapping of groundwater supplies and an evaluation of existing controls are slated for completion by the Groundwater Conservation Advisory Council, which was established by the Michigan Legislature in 2003. At the very least, lawmakers should delay consideration of the governor’s proposal until the findings are released.

It is also premature for the governor to codify elements of the draft Annex 2001, which remains “a work in progress and continuing to evolve,” according to Dave Naftzger, executive director of the Council of Great Lakes Governors.

Because it’s heavy on government directives, the Granholm plan also wholly ignores market-based incentives, such as tradable water rights, as a stewardship method. But leveraging property rights has proven far more effective than a flood of government dictates in conserving and protecting natural resources. According to researchers Clay J. Landry and Laurel E. Phoenix, “(T)here is a broad recognition and understanding among researchers and policy makers that well defined property rights to resources such as water are fundamental to giving people the proper incentives for sustainable management.”

Stewardship of our waters can and should be improved, of course. The proliferation of non-native species (such as the zebra mussel) throughout the Great Lakes presents difficult challenges. Also, the United States and Canada have identified 14 areas within Michigan where water quality does not support a full range of uses.

The Granholm administration and the Legislature would do well to address actual environmental problems without abridging property rights rather than indulge their regulatory impulses in ways that will do more harm than good to Michigan and the spectacular Great Lakes.

Russ J. Harding is former director of the Michigan Department of Environmental Quality and is senior environmental policy analyst for 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.