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Xerox University Microfilms 300 North Zeeb Road Ann Arbor, Michigan 46106 1 I I 75- 14,854 VERTREES, Robert Layman, 1939THE INCIDENCE OF CERTAIN BENEFICIAL AND ADVERSE EFFECTS OF PUBLIC WATER POLLUTION CONTROL MEASURES UPON MANUFACTURING INDUSTRY IN MICHIGAN. Michigan State University, Ph.D., 1974 Economics, canmerce-business Xerox University Microfilms, ( ^ C o p y r i g h t by ROBERT IAYMAN VERTREES 197^ Ann Arbor, Michigan 48106 i i THE INCIDENCE OF CERTAIN BENEFICIAL AND ADVERSE EFFECTS OF PUBLIC WATER POLLUTION CONTROL MEASURES UPON MANUFACTURING INDUSTRY IN MICHIGAN By Robert Layman V e r t r e e s A DISSERTATION Submitted to M ich ig an S t a t e U n i v e r s i t y in p a r t i a l f u l f i l l m e n t o f the r e q u ir e m e n t s f o r t h e de gre e o f DOCTOR OF PHILOSOPHY Department o f Resource Development 197** ABSTRACT THE INCIDENCE OF CERTAIN BENEFICIAL AND ADVERSE EFFECTS OF PUBLIC WATER POLLUTION CONTROL MEASURES UPON MANUFACTURING INDUSTRY IN MICHIGAN By Robert Layman V e r t r e e s Faced w i t h e n v i r o n m e n t a l between e n v ir o n m e n t a l p o litic a l p o llu tio n , s o c i e t y must make t r a d e - o f f s q u a l i t y and economic development o b j e c t i v e s . process by which th e s e t r a d e - o f f s a r e made r e q u i r e s t i o n about th e e f f i c i e n c y , d e v e l o p m e n t a l , and d i s t r i b u t i o n a l o f p u b l i c measures t o c o n t r o l in f o r m a t i o n about economic a s s i s t a n c e programs the r e s u lt s o f : This d i s s e r t a t i o n in f o r m a ­ impacts provides impacts o f s e l e c t e d r e g u l a t o r y p o l i c i e s and in the f i e l d o f w a t e r p o l l u t i o n c o n t r o l . (I) various b e n e fic ia l p o llu tio n . The exploratory It reports r e s e a r c h about th e manner by which and a d v e r s e e f f e c t s o f measures to c o n t r o l sources work t h e i r way thr oug h t h e economy, and (2 ) point s p e c i f i c methods designed t o p r o v i d e e s t i m a t e s o f t h e incidence o f c e r t a in e f f e c t s o f s e l e c t e d measures upon m a n u f a c t u r i n g i n d u s t r i e s w i t h i n M ic h i g a n and re g io n s t h e r e i n . Exploratory r e s e a r c h was guided by the goal economic impacts o f w a t e r q u a l i t y t o l e a r n about st a n d a r d s and r e l a t e d programs upon M i c h i g a n ’ s d e v e l o p i n g economy. p o l i c i e s and T h i s goal was expressed in a r e s e a r c h c o n t r a c t w i t h t h e M ic h i g a n Water Resources Commission which i n i t i a t e d this st udy in Jun e, 1968. E x p lo ra to ry research R o b e r t Layman V e r t r e e s consisted p r i m a r i l y o f a l i t e r a t u r e review, f o r a p p l i c a b l e sources and methods. referred in terview s, Se v er a l t o thro ug ho u t e x p l o r a t o r y r e s e a r c h . formulated s h o r t ly a f t e r fa c t-fin d in g inco rp orate secondary sources and agency re co rd s d e p i c t economic and d e s i g n a t e d impacts upon ma jor regions. c r i t e r i a o f c h o i c e were These c r i t e r i a were i n t e r v i e w s had commenced. r e s e a r c h should and a search They he ld t h a t i n f o r m a t i o n o b t a i n e d from i n t o a framework which could industries w ith in the e n t i r e C r i t e r i a o f choice a ls o c a lle d state f o r a study whose conduct would f a c i l i t a t e a l o n g - t e r m process o f r e s e a r c h about th e economic impacts w i t h i n M ich ig an o f p u b l i c measures to c o n t r o l water p o l l u t i o n . E x p lo ra to ry research r e s u lte d objectives f o r subsequent r e s e a r c h . e s tim a tio n o f the in the f o r m u l a t i o n o f f o u r Three o b j e c t i v e s p e r t a i n e d to in c i d e n c e o f e f f e c t s ; mendations f o r f u t u r e research. the f o u r t h related to recom­ The f i r s t o b j e c t i v e was to e s t i m a t e the s i z e s and c l a s s i f i c a t i o n s o f m a n u f a c t u r in g e s t a b l i s h m e n t s w i t h i n watershed r e g i o n s , groups o f m e t r o p o l i t a n and n o n m e t r o p o l i t a n c o u n t i e s , and th e e n t i r e s t a t e t h a t would have d i r e c t l y borne the br u n t o f adv ers e e f f e c t s caused by s t r i c t and immediate enfor ce men t o f tory controls in e f f e c t d u r i n g the l a t e o b j e c t i v e s were to id e n tify 1960s. regula­ The second and t h i r d those s i z e s , c l a s s i f i c a t i o n s , and r e g i o n a l l o c a t i o n s o f m a n u f a c t u r in g p l a n t s which had d i r e c t l y b e n e f i t e d the most from s e l e c t e d subsid y and t a x exemption programs p r i o r ber, 1969. effects {The second o b j e c t i v e p e r t a i n e d t o th e from f e d e r a l t o Septem­ incidence o f and M ich ig an programs which s u b s i d i z e t h e c o n s t r u c ­ tio n of public water p o llu tio n control fa c ilitie s . The t h i r d o b j e c t i v e R o b e r t Layman V e r t r e e s pertained to the i n c i d e n c e o f e f f e c t s from a M i c h i g a n program which exempts f i x e d components o f from l o c a l in d u s tria l w a s t e w a t e r t r e a t m e n t works p r o p e r t y t a x e s and from s t a t e s a l e s and use t a x e s . ) These o b j e c t i v e s were a t t a i n e d t h r o u g h th e de v e lo p m e nt o f a general r e s e a r c h framework and s e v e r a l Various impact groups and subgroups c o n s t i t u t e d o f t h e fr am e w o rk . reg io n al, in d u s tria l, and s i z e - o f - p l a n t incorporated more methods. Among o t h e r estab lishm ents, waters d i r e c t l y direct into th is things, (2) stru ctu ral lin es. Several t h i s data p e rta in e d in j u s t (3) discharges, c e n ta g e s wer e c a l c u l a t e d o f th e t o t a l include number under t h e employment in a l l number o f e s t a b l i s h ­ The w o r s t - p o s s i b l e p o t e n t i a l the f o l l o w i n g . in j u s t th o s e e s t a b l i s h ­ in a d e q u a t e t r e a t m e n t rating i n c i d e n c e o f a d v e r s e employment r e g u l a t o r y p o l i c i e s was e s t i m a t e d I t was assumed t h a t a l l Per­ number o f w o r k e r s w i t h i n each ments which e m i t t e d d i s c h a r g e s a s s i g n e d an an (I) ( 5 ) adequacy o f t r e a t m e n t impact group and subgroup w h ic h were employed percentages. to f o r a tax exemption. B a s i c methods o f d a t a a n a l y s i s from e n f o r c e d re la ­ th os e e s t a b l i s h m e n t s wh ich p r o v id e d d i r e c t l y - c o n t r o l l e d d i s c h a r g e s , and ( 6 ) effects k in d s o f frame wo rk and a n a l y z e d by one o r o f t h e com mission, (*♦) employment ments which had a p p l i e d a lo n g number o f e s t a b l i s h m e n t s wh ich s e n t w a s t e ­ em itted d i r e c t l y - c o n t r o l l e d in 1968. components i n t o p u b l i c w a t e r s and t hus had d i s c h a r g e s re g u la to ry control establishm ents, r e s e a r c h methods. These groups and subgroups were d e l i m i t e d ted d a t a were of a ll s p e c ific from th e s e p la n t s w i t h disc ha rge s assigned in a d e q u a t e r a t i n g would have had t o s hut down because o f d i r e c t costs r e q u i r e d t o a b i d e by v i g o r o u s e n f o r c e m e n t o f regulatio ns. R o b e r t Layman V e r t r e e s Another s e t o f p e r c en ta g es a l l o w e d e s t i m a t e s to be made o f the actual In c i d e n c e o f c o s t s avi ng s m a n u f a c t u r e r s have r e c e i v e d from s u b s i d i e s to m u n i c i p a l i t i e s . (Such s a vin gs have accrued t o p l a n t s which u t i l i z e public treatment f a c i l i t i e s because sewer s e r v i c e charges l e v i e d by m u n i c i p a l i t i e s have n o r m a l l y recovered o n l y t h e construction c o s ts .) Pe rc e nt a ge s were c a l c u l a t e d o f t h e t o t a l of establishments w i t h i n separate emitted discharges d i r e c t l y pe rc en tag es indicated effects sewers. The d i r e c t incidence o f from s u b s i d i e s was d e t e r m in e d by examining th e mag­ these complements. indicated those Complements o f r e l a t i v e l y impact groups or subgroups which proportions o f p la n ts th a t u t i l i z e d o f the Complements o f thes e t h e p r o p o r t i o n s o f e s t a b l i s h m e n t s which sent nitude o f quently, in c i d e n c e o f b e n e f i t s tw o -b y -tw o c h i - s q u a r e t e s t s . in cl u d e d t h e g r e a t e r public f a c i l i t i e s and , conse­ from t a x exemptions These t e s t s i n d i c a t e d w h et h er o r no t any s i g n i f i c a n t d i f f e r e n c e s e x i s t e d between broad D etailed R e s u lt s r e v e a le d f o r an e xem pti on. t h a t t h e r e have been some s u bs ta n­ d i s s i m i l a r i t i e s among i n d u s t r i e s , c a t e g o r i e s o f r e g i o n s , and s i z e s o f p l a n t s in t h e in dustries, i n c i d e n c e o f both th e adv e rs e e f f e c t s o f r e g u l a t o r y p o l i c i e s and t h e b e n e f i c i a l ences In Impact f i n d i n g s o f r e s e a r c h have been r e p o r t e d f o r each impact group and subgroup. programs. Evaluation in vo lv e d s e v e r a l subgroups in the p r o p o r t i o n o f p l a n t s which had a p p l i e d tia l g r e a t magnitude r e c e i v e d b e n e f i t s from s t u d i e d subsid y programs. s ta tis tic a lly number Impact groups and subgroups which into p u b lic w aters. t h e i r discharges to p u b lic u t i l i t y beneficial l o c a l l y borne share o f Perhaps the most f a r - r e a c h i n g In c i d e n c e between w a t e r - u s i n g e f f e c t s o f assistance fin ding s p e rta in to d i f f e r ­ i n d u s t r i e s which produce i R o b e r t Layman V e r t r e e s no nd ur a bl e goods and those which produce d u r a b l e goods and between m e t r o p o l i t a n and n o n m e t r o p o l t t a n c o u n t i e s . The b r u n t o f adv ers e employment e f f e c t s would p o t e n t i a l l y have f a l l e n w ithin i n c i d e n t upon p l a n t s t h e W a t e r - U s in g Nondurables c a t e g o r y o f n o n m e t r o p o l i t a n c o u n t i e s . The b e n e f i c i a l effects from s u b s i d i e s have been r e c e i v e d by g r e a t e r proportions o f plan ts w ith in m etropolitan c o u n tie s . industries t h e W a te r - U s in g Du rables c a t e g o r y o f These f i n d i n g s r e f l e c t d i f f e r e n c e s among in t h e p r o p o r t i o n s o f p l a n t s which have u t i l i z e d p u b l i c t r e a t m e n t works o f so uthern M ich ig an c i t i e s . re v e a l e d Oth er f i n d i n g s t h a t M i c h i g a n ' s ta x exemption program had been u t i l i z e d s i g n i f i c a n t l y g re a te r proportion o f plants th e l a r g e by a l a r g e m a n u f a c t u r in g p l a n t s and o f located w it h in m e tro p o lita n c o u n tie s . A ll things co n sidered, s t u d i e d r e g u l a t o r y p o l i c i e s and a s s i s t a n c e programs have improved the locational a t t r a c t iv e n e s s o f urbanized areas to w a t e r - u s i n g manufac­ turing p la n ts . D etailed recommendations a r e o f f e r e d the a d m i n i s t r a t i o n o f p e r t i n e n t p o l i c i e s , in the f i n a l programs, and c h a p t e r about in s titu tio n a l s t r u c t u r e s o f t h e S t a t e o f M ic h ig a n and about th e conduct o f f u r t h e r research. Recommendations o f th e f i r s t r e c e n t changes a fte r setting t e rn s In the r e se a r ch in s t u d i e d p o l i c i e s , ty p e a r e g iv e n a f t e r programs, and reviewing i n s t i t u t i o n s and f o r t h an o u t r i g h t n o r m a t iv e sta te m e nt o f d e s i r a b l e p a t in c i d e n c e o f include (1) studied e f f e c t s . the r e p e t i t i o n , Types o f recommended e x p a n s io n , and r e v i s i o n o f the methods and framework developed by t h i s s t u d y , (2) case s t u d i e s i n f o r m a t i o n about the d ire c t, in s e l e c t e d communities t o o b t a i n I n d i r e c t , and t o t a l the conduct o f e f f e c t s o f p o l i c i e s and programs to improve R o b e r t Layman V e r t r e e s w a t e r q u a l i t y , and ( 3 ) the s t r a t i f i e d w i t h i n e n t i r e s u b s t a t e r e g io n s in o r d e r t o l e a r n about f a c t o r s asso­ c i a t e d w i t h t h e i r use o f m u n i c i p a l programs. sampling o f m a n u f a c t u r i n g p l a n t s fa c ilitie s and t a x exemption To Noel and P r o f e s s o r S t e l n m u e l l e r 11 ACKNOWLEDGMENTS I am g r a t e f u l from many p e o p l e . for t h e a s s i s t a n c e and encouragement r e c e i v e d W ithout t h e ir help, t h i s work c o u l d no t have been completed. S p e c ia l thanks a r e due my w i f e , N o e l , and P r o f e s s o r M i l t o n S t e i n m u e l 1e r , Chairman o f t h e Guidance Committee. She has shared my f e e l i n g s o f f r u s t r a t i o n and ac co mp lis hm en t, and has w i l l i n g l y the d i f f i c u l t i e s o f a graduate s tu d en t's w i f e . and an open mind, n e v e r f a i l i n g respond by o f f e r i n g v ita l to l i s t e n commentary and He has k e p t an open door t o and read my ideas and in sig h t. P r o f e s s o r R a l e i g h Barlowe and Mr. W i l l i a m Marks helped th is study. stages. They gave p a r t i c u l a r l y A ls o d u r i n g im p o rt a n t h e lp d u r i n g those e a r l y s t a g e s , many u s e f u l Leonard B ro n d e r . and to a l l Thanks a r e e x p r e s s e d , its form ative B. W y c k o f f , therefo re, th o s e l i s t e d in Appendix E who met w i t h me d u r i n g In a d d i t i o n P r o f e s s o r Da n ie l t o thes e men in terview s. to P r o f e s s o r s S t e i n m u e l 1e r , B a r l o w e , and H a z a r d , C h a p p e l l e and P r o f e s s o r A. A l l a n Schmid served on the Guidance Committee. ] a p p re c ia te t h e ir h elp ful those o f f e r e d d u r i n g th e seminar F in a lly , in itia te s u g g e s t io n s came from d i s c u s s i o n s w i t h P r o f e s s o r John H a z a r d , P r o f e s s o r J . and Mr. endured h e a rtfe lt com m ents--especIally in t h e summer o f 1971. thanks a r e extended t o c o l l e a g u e s a t both the U n i v e r s i t y o f Ma s sa c hu s e tt s and South Dakota S t a t e U n i v e r s i t y f o r j o i n i n g my f a m i l y in p r o v i d i n g th e d a y - t o - d a y u n d e r s t a n d i n g and support needed t o conduct t h i s work. i i i TABLE OF CONTENTS Page LIST OF T A B L E S .........................................................................................................................vi i i LIST OF F I G U R E S xi I LIST OF A P P E N D I C E S xi II PREFACE xi v PART I . PERSPECTIVE Chapter I. II. ORGANIZATION ..................................................................................................... 2 ............................................................................................................ In ten t P a r t s ............................................................................................................ C hapter-by-C hapter Preview .......................................................... 2 2 3 S E T T I N G ............................................................................................................ 8 In tro d u ctio n .............................................................................................. P e r t i n e n t Changes in R e g u l a t o r y P o l i c i e s ............................. Increased A s s i s t a n c e t o M u n i c i p a l i t i e s ............................. P r o v i s i o n o f A s s i s t a n c e to I n d u s t r i e s .................................... P o l i c i e s and Programs Adopted in M ic h i g a n . . . . I n f l u e n c e o f F e d e r a l l y Induced Stream and E f f l u e n t Standards on Commission P r a c t i c e s .................................... 8 9 11 II 12 PART I I . Ilf. 1*1 FROM GOALS TO OBJECTIVES SUMMARY OF EXPLORATORY RESEARCH ................................................... 23 Intro duction .............................................................................................. R e c o g n i t i o n o f t h e Need to N a r r o w ............................................ L i n e s o f Research ........................................................................ O r g a n i z a t i o n o f Research ................................................................. The I n f l u e n c e o f C r i t e r i a o f C h o i c e .................................... S e q u e n t i a l R e s u l t s o f E x p l o r a t o r y Research . . . . Conc lu sio n o f E x p l o r a t o r y R e s e a r c h ............................................ 23 23 2*t 25 27 29 *»0 iv C h a p te r tV. Page THE NEED FOR STUDIESONDISTRIBUTIONAL IMPACTS . . . I n t r o d u c t i o n .............................................................................................. The Need f o r Knowledge About t h e D i s t r i b u t i o n a l Impacts o f Governmental A c t i v i t i e s ......................................... The Need f o r Knowledge About t h e D i s t r i b u t i o n a l Impacts o f Programs to Develop Wa te r Resources . . The Need f o r Knowledge About th e D i s t r i b u t i o n a l Impacts o f P o l i c i e s and Programs t o C o n t r o l Water P o l l u t i o n ................................................................................ 4l 41 41 1*3. 44 PART I I I . SCOPE AND METHOD OF RESEARCH DESIGNED TO ATTAIN OBJECTIVES V. SOME ESSENTIALS OF DISTRIBUTIONAL IMPACTS AND DISTRIBUTIONAL-IMPACT STUDIES ............................. Intro duction .............................................................................................. The Occurrence o f Impacts and N a t u r e o f E f f e c t s . . B as ic Elements o f D i s t r i b u t i o n a l - Impact S t u d i e s . . In dicators of E ffe c ts ........................................................................ E x t e n t o f Measurement ........................................................................ Toward a Wid er Range o f Measurement P o s s i b i l i t i e s . . The Timing o f S t u d i e s ........................................................................ Issues About Va lu e s ............................................................................... C o n c l u s i o n ..................................................................................................... V I. 64 64 65 66 67 70 71 72 76 REVIEW OF RESEARCH DESIGN AND METHODS USED TO STUDY BENEFICIAL AND ADVERSE EFFECTS .......................................................... 77 In tro d u ctio n .............................................................................................. S t u d ie d P o l i c i e s and Programs ................................................... Regional Impact Subgroups ................................................................. M a jo r L i n e s o f R e s e a r c h ................................................................. Summary: Methods in P e r s p e c t i v e ............................................ 77 78 84 84 97 PART IV . V II. 64 RESULTS OF RESEARCH DESIGNED TO ATTAIN OBJECTIVES THE POTENTIAL INCIDENCE OF ADVERSE EFFECTS FROM DIRECT REGULATORY CONTROLS .......................................................... . . . 102 P r e vi e w o f Th ree C ha p t e rs ................................................................. 102 Restatement o f O b j e c t i v e I .................................................................. 102 B r i e f Review o f Methods and Sources . . . . . . . 103 The P o t e n t i a l I n c i d e n c e o f Adverse E f f e c t s Upon D i f f e r e n t Sizes o f Establishments .................................... 105 v C h a p te r Page The P o t e n t i a l I n c i d e n c e o f Adverse Employment E f f e c t s ............................................................................................................. 126 F u r t h e r A n a l y s i s o f t h e In c i d e n c e and I m p l i c a t i o n s 169 o f W o r s t - P o s s i b l e Employment Losses .................................... V III. THE ACTUAL INCIDENCE OF BENEFICIAL EFFECTS FROM SUBSIDY PROGRAMS ...................................................................................... 175 In tro d u c tio n .............................................................................................. 175 The Ma gnitude o f S u b s i d i e s .................................................................. 177 E s t i m a t e s o f th e I n c i d e n c e o f B e n e f i c i a l E f f e c t s . . 178 An I n d i c a t i o n o f t h e Degree o f U n i f o r m i t y in the A l l o c a t i o n o f S u b s i d i e s ................................................................. 184 IX. THE ACTUAL INCIDENCE OF BENEFICIAL EFFECTS FROM MICHIGAN'S TAX EXEMPTION PROGRAM .................................................. In tro d u c tio n .............................................................................................. Tax Exemptions E i t h e r Received o r Pending . . . . A P r e v i e w o f th e Scope o f S t a t i s t i c a l and N o n s t a t i s t i c a l An aly ses ................................................................. C h i - S q u a r e T e s t s ...................................................................................... The Purpose and R e s u l t s o f A l t e r n a t i v e Formula­ .......................................................... t i o n s o f C h i- S q u a r e T e s t s N o n s t a t i s t i c a 1 A n a l y s i s o f P l a n t s That Had A p p l ie d f o r Exemptions on P r e t r e a t m e n t Works ............................... N o n s t a t i s t i c a l A n a l y s i s o f M u l t i - and S i n g l e - P l a n t Firms Which Had A p p l i e d f o r an Exemption . . . . 195 195 196 197 198 209 210 212 PART V. SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS X. S U M M A R Y .................................................................................................................... 214 P r e v i e w o f Three C hap te rs ................................................................. 214 I n t r o d u c t i o n t o T h i s C h a p t e r ..................................................................214 A Summary o f the S e t t i n g .........................................................................215 From O r i g i n s to O b j e c t i v e s ..................................................................220 H i g h l i g h t s o f Methods ........................................................................ 225 XI. C O N C L U S I O N S .............................................................................................................240 P r o c e d u r a l Comments ............................................................................... The Magnitude o f E f f e c t s a t t h e S t a t e Level . . . . The I n c i d e n c e o f E f f e c t s a t t h e S t a t e Level . . . . The I n c i d e n c e o f E f f e c t s a t t h e Regional Level . . . vi 240 241 248 271 C h a p te r XU. Page RECOMMENDATIONS.....................................................................................................282 In tro duction ................................................................................................. 282 D i f f i c u l t i e s Encountered When Making Recom­ mendations .....................................................................................................283 Means o f R e s o lv in g D i f f i c u l t i e s .................................................. 284 Toward t h e R e s o l u t i o n o f D i f f i c u l t i e s ........................................ 285 Recommendations About th e Conduct o f P o l i c i e s and P r o g r a m s ..............................................................................................318 Recommendations About th e Conduct o f F u r t h e r R e s e a r c h ............................................................................................................3^5 A P P E N D I C E S ................................................................................................................................. 361 LIST OF R E F E R E N C E S ............................................................................................................455 vi i L IS T OF TABLES Page Table 1. 2. 3. 4. 5. 6. 7. General t y p e s o f re sponses by m u n i c i p a l i t i e s and manu­ f a c t u r i n g p l a n t s t o s t u d i e d p o l i c i e s and programs 33 L i s t o f s p e c i f i c m anufacturing in d u s t r ie s included w i t h i n r e s e a r c h f r a m e w o r k , by t h r e e broad ....................................................................................................... categ ories 90 A p p r o x im a t e p e r c e n t o f t o t a l m a n u f a c t u r i n g e s t a b l i s h ­ ments in m in o r w a t e r - u s i n g i n d u s t r i e s , w a t e r - u s i n g n o n d u r a b l e and w a t e r - u s i n g d u r a b l e i n d u s t r i e s t h a t were 1 i s t e d on t h e W a t e r Resources Commission s t a t u s l i s t f o r 19 68, by e m p l o y m e n t - s i z e c a t e g o r i e s , w a te i— shed r e g i o n s , and m e t r o p o l i t a n and n o n m e t r o p o l i t a n c o u n t i e s .............................................................................................................. 106 A p p r o x im a t e p e r c e n t o f t o t a l m a n u f a c t u r i n g e s t a b l i s h ­ ments in m inor w a t e r - u s i n g i n d u s t r i e s and w a te i— us in g n o n d u r a b l e i n d u s t r i e s t h a t wer e l i s t e d on t h e W a t e r Resources Commission S t a t u s L i s t f o r 1 9 6 8 , by e m p l o y m e n t - s i z e c a t e g o r i e s , w a t e r s h e d r e g i o n s , and metro po l i t a n and n o n m e t r o p o l i t a n c o u n t i e s . . 108 A p p r o x im a t e p e r c e n t o f t o t a l m a n u f a c t u r i n g e s t a b l i s h ­ ments in w a t e r - u s i n g d u r a b l e i n d u s t r i e s t h a t wer e l i s t e d on t h e Wat er Resources Commission s t a t u s l i s t f o r 1968( by e m p l o y m e n t - s i z e c a t e g o r i e s , w a te r s h e d r e g i o n s , and m e t r o p o l i t a n and n o n m e t r o p o l i t a n c o u n t i e s .............................................................................................................. 110 Comparison o f employment in e s t a b l i s h m e n t s on Water Resources Commission s t a t u s l i s t w i t h t o t a l employment, by i n d u s t r i a l c l a s s i f i c a t i o n and by adequacy o f t r e a t m e n t r a t i n g s , M i c h i g a n t o t a 1s .............................................................................................................. 135 Comparison o f r e g i o n a l employment in e s t a b l i s h m e n t s on Wa ter Resources Commission s t a t u s l i s t w i t h t o t a l r e g i o n a l employment, by i n d u s t r i a l c l a s s i ­ f i c a t i o n and by adequacy o f t r e a t m e n t r a t i n g s , m e tro p o lita n counties .......................................................................... 142 vi 1 r t T a b le 8. Page Comparison o f r e g i o n a l employment in e s t a b l i s h m e n t s on Water Resources Commission s t a t u s l i s t w i t h t o t a l r e g i o n a l employment, by i n d u s t r i a l c l a s s i f i ­ c a t i o n and by adequacy o f t r e a t m e n t r a t i n g s , .................................................................. nonm etropolitan co u n tie s 1^3 9* Comparison o f r e g i o n a l employment in e s t a b l i s h m e n t s on Water Resources Commission s t a t u s l i s t w i t h t o t a l r e g i o n a l employment, by i n d u s t r i a l c l a s s i ­ f i c a t i o n and by adequacy o f t r e a t m e n t r a t i n g s , Region I ......................................................................................................................1^8 10. Comparison o f r e g i o n a l employment in e s t a b l i s h m e n t s on Water Resources Commission s t a t u s l i s t w i t h t o t a l r e g i o n a l employment, by i n d u s t r i a l c l a s ­ s i f i c a t i o n and by adequacy o f t r e a t m e n t r a t i n g s , Reg ion I I A .............................................................................................................. I*t9 11 . Comparison o f r e g i o n a l employment In e s t a b l i s h m e n t s on Water Resources Commission s t a t u s l i s t w i t h t o t a l r e g i o n a l employment, by i n d u s t r i a l c l a s s i ­ f i c a t i o n and by adequacy o f t r e a t m e n t r a t i n g s , Reg ion I I IA .............................................................................................. 150 12. Comparison o f r e g i o n a l employment in e s t a b l i s h m e n t s on Water Resources Commission s t a t u s l i s t w i t h t o t a l r e g i o n a l employment, by i n d u s t r i a l c l a s s i ­ f i c a t i o n and by adequacy o f t r e a t m e n t r a t i n g s , Reg ion I I B ..............................................................................................................151 13. Comparison o f r e g i o n a l employment in e s t a b l i s h m e n t s on Water Resources Commission s t a t u s l i s t w i t h t o t a l r e g i o n a l employment, by i n d u s t r i a l c l a s s i ­ f i c a t i o n and by adequacy o f t r e a t m e n t r a t i n g s , R eg io n M I B .............................................................................................................. 152 U. Comparison o f r e g i o n a l employment in e s t a b l i s h m e n t s on Water Resources Commission s t a t u s l i s t w i t h t o t a l r e g i o n a l employment, by i n d u s t r i a l c l a s s i ­ f i c a t i o n and by adequacy o f t r e a t m e n t r a t i n g s , Region I V ................................................................................ 153 Comparison o f r e g i o n a l employment in e s t a b l i s h m e n t s on Wa te r Resources Commission s t a t u s l i s t w i t h t o t a l r e g i o n a l employment, by i n d u s t r i a l c l a s s i ­ f i c a t i o n and by adequacy o f t r e a t m e n t r a t i n g s , R e g io n V ............................................................................................................................15^ ix Page P e r c e n t o f t o t a l m a n u f a c t u r i n g work f o r c e and t o t a l l a b o r f o r c e employed in s t a t u s - 1 [ s t p l a n t s which had d i s c h a r g e s a s si g n e d 1e s s - t h a n - a d e q u a t e r a t i n g s in 1968, by r e g i o n a l impact groups and subgroups 170 T o t a l number o f m u n i c i p a l i t i e s w i t h w a s t e t r e a t m e n t f a c i l i t i e s in 1968 t h a t had r e c e i v e d a f e d e r a l g r a n t o r loan a n d / o r a g r a n t from t h e f i r s t two rounds o f t h e s t a t e bond program, by w a t e r sh ed r e g i o n and by p o p u l a t i o n - s i z e c l a s s i f i c a t i o n o f m u n i c i p a l i t i e s ................................................................................ 186 Number o f e s t a b l i s h m e n t s on commission s t a t u s l i s t f o r 1968 t h a t had r e c e i v e d a t a x ex empti on c e r ­ t i f i c a t e p r i o r t o September o f 1969, by employments i z e c l a s s i f i c a t i o n s and i n d u s t r i a l and r e g i o n a l subgroups .............................................................................................. 199 Two-by-two contingency t a b le f o r c h i-s q u a re t e s t o f n u l l h y p o t h e s i s t h a t no d i f f e r e n c e in t h e r e c e i p t o f t a x exemptions e x i s t s between the number o f e s t a b l i s h m e n t s t h a t employed g r e a t e r t han 250 persons and t h e number t h a t employed 250 persons o r less ...................................................................................................... 200 T w o - b y - tw o c o n t i n g e n c y t a b l e f o r c h i - s q u a r e t e s t o f n u l l h y p o t h e s i s t h a t no d i f f e r e n c e in t h e r e c e i p t o f t a x exem ptio ns e x i s t s between t h e number o f e s t a b l i s h m e n t s l o c a t e d In m e t r o p o l i t a n c o u n t i e s and t h e number l o c a t e d in n o n m e t r o p o l i t a n c o u n t i e s . 201 Two-by-two contingency ta b le f o r c h i-s q u a r e t e s t of n u l l h y p o t h e s i s t h a t no d i f f e r e n c e in t h e r e c e i p t o f t a x ex em pt io ns e x i s t s between t h e number o f e s t a b l i s h m e n t s l o c a t e d in t h e n o r t h e r n f o u r w a t e r s h e d r e g i o n s and t h e number l o c a t e d in t h e s o u t h e r n t h r e e wa te rs h ed r e g i o n s ............................................ 202 Two-by-two contingency t a b l e f o r c h i- s q u a r e t e s t o f n u l l h y p o t h e s i s t h a t no d i f f e r e n c e in t h e r e c e i p t o f t a x exempti ons e x i s t s between t h e number o f e s t a b l i s h m e n t s in c lu d e d in t h e W a t e r - U s i n g N on du ra b le s c a t e g o r y and t h e number in cl ud e d In t h e W a t e r - U s i n g D u r a b le s c a t e g o r y ............................. 203 Summary o f c o n c l u s i o n s about t h e i n c i d e n c e o f s t u d i e d e f f e c t s upon broad impact subgroups ..................................... 2^9 x Page Tabl e 2*+. 25- 26. 27. 28. F i n d i n g s about p o t e n t i a l w o r s t - p o s s i b l e employment e f f e c t s upon m a jo r w a t e r - u s i n g m a n u f a c t u r i n g i n d u s t r i e s ..................................................................................................... 263 F i n d i n g s about e s t i m a t e d p e r c e n t a g e s o f p l a n t s w i t h i n m a jo r watei—us in g m a n u f a c t u r i n g i n d u s t r i e s which had a c t u a l l y b e n e f i t e d from s u b s i d i e s .................................... 266 F i n d i n g s abo ut t h e r e c e i p t o f t a x ex emption c e r t i f i ­ c a t e s by f i r m s and p l a n t s w i t h i n m a jo r w a t e r - u s l n g manufacturing in d u s tr ie s ................................................................. 269 F i n d i n g s abo ut p o t e n t i a l w o r s t - p o s s i b l e employment e f f e c t s upon m a jo r I n d u s t r i e s w i t h i n t h e m e t r o ­ p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s . . . 277 F i n d i n g s about p o t e n t i a l e f f e c t s upon r e g i o n a l . . 278 w o r s t - p o s s i b l e employment impact groups and subgroups H -l. Pe rc e nt a ge s o f a v e r a g e d a l l y volumes o f w a s t e w a t e r s t r e a t e d in 1968 by t h e f a c i l i t i e s o f seven Southern M ic h i g a n m u n i c i p a l i t i e s t h a t o r i g i n a t e d from I n d i v i d u a l l y metered d i s c h a r g e s from m a n u f a c t u r i n g e s t a b l i s h m e n t s .......................................................... *125 1-1. Minimum number o f e s t a b l i s h m e n t s on commission s t a t u s l i s t f o r 1968 t h a t were i n c o r p o r a t e d i n t o r e fo r m u ­ l a t i o n s o f o r i g i n a l c h i - s q u a r e t e s t s , by impact subgroups o f each t e s t .................................... ....................................***t0 J -l. R e l a t i v e economic importance o f m a jo r w a t e r - u s i n g m a n u f a c t u r i n g I n d u s t r i e s in M i c h i g a n .................................... ****9 J-2. Number o f e n t i t i e s w i t h d i s c h a r g e s i n t o p u b l i c w a t e r s o f M i c h i g a n , by types o f d i s c h a r g e s , 1968 ................................................................................................................... **53 xi L IS T OF FIGURES F ig u re Page 1. W a te r s h e d r e g i o n s and m e t r o p o l i t a n ............................ 85 2. Watersheds and wa te rs h ed r e g i o n s ......................................................... 86 3. Persons p e r s qua re m i l e , 1*. Dia gr am m at ic r e p r e s e n t a t i o n o f c o n c l u s i o n s about t h e i n c i d e n c e o f e f f e c t s upon broad impact subgroups . Michigan, xi i co u n tie s I960 . . . . . . . 87 . 250 L IS T OF APPENDICES A p p e n d ix Page A. U nr epo rt ed M a n u s c r ip t s B. C h r o n o l o g i c a l L i s t i n g o f P e r t i n e n t F e d e r a l and Michigan L a w s ..................................................................................................... 365 C. I n t e r v i e w s Conducted During E x p l o r a t o r y Research D. Form L e t t e r s Sent to E. D e t a i l s o f Research Design and Methods Used to Study B e n e f i c i a l and Adverse E f f e c t s ........................................... 382 F. The C l a s s i f i c a t i o n o f M a n u f a c t u r i n g 399 G. Assumptions and L i m i t a t i o n s o f Methods Used to Study th e I n c i d e n c e o f Adverse E f f e c t s From R e g u l a t o r y P o l i c i e s and o f B e n e f i c i a l E f f e c t s from S u b s i d i e s ................................................................................*iO*t H. Some Case S t u d i e s About th e In creased Use o f P u b l i c Works by M a n u f a c t u r i n g P l a n t s ........................................... ^22 A l t e r n a t i v e F o r m u l a t i o n s ( S e n s i t i v i t y A na ly s es ) o f Chi-Square Tests ............................................................................... ^30 I. J. ............................................................................... , . . 362 372 I n t e r v i e w e e s .......................................................... 377 Industries . . . . S e l e c t e d Background I n f o r m a t i o n R e f e r r e d to in Ch apt er X I ............................................................................................................ 4^6 xIi i PREFACE T h i s P r e f a c e and Chapter I p r o v i d e an i n t r o d u c t i o n ground and o r g a n i z a t i o n o f t h i s d i s s e r t a t i o n . seve ra l d e c i s i o n s which had a l a s t i n g t o th e ba c k ­ The P r e f a c e revi ews i n f l u e n c e upon t h e scope, n a t u r e , and o b j e c t i v e s o f t h i s work. These d e c i s i o n s a r e bes t e x p l a i n e d by w ritin g Therefore, in t h e f i r s t person. I welcome th e o p p o r t u n i t y o f f e r e d by a P r e f a c e to d i r e c t l y address th e r e a d e r . O r iq ins I began work on t h i s study in June, 1968, a f t e r a c c e p t i n g a y e a r - l o n g g r a d u a t e r e s e a r c h a s s i s t a n t s h i p w i t h t h e Department o f Resource Development a t Michigan S t a t e U n i v e r s i t y . was supported by f e d e r a l T h is a s s i s t a n t s h i p funds g r a n t e d to t h e M ic h ig a n Wa ter Resources Commission f o r use in p l a n n i n g a c t i v i t i e s . A c o n t r a c t between the commission and th e department guided r e s e a r c h as a g r a d u a t e a s s i s t a n t and had a profound i n f l u e n c e upon t h i s e n t i r e sions e s t a b l i s h e d t h e b r o a d l y s t a t e d goal study. Mto c o n s i d e r Contract p ro v i­ the impact o f a l t e r n a t i v e w a t e r r e s o u r c e p o l i c i e s such as t h e d e s i g n a t i o n o f h i g h e r w a t e r q u a l i t y stan dar ds on M i c h i g a n ' s d e v e l o p i n g economy."* t i o n was requested about economy o f the e n t i r e In f o r m a ­ impacts o f p o l i c i e s and programs upon the s t a t e and upon t h e economy o f s e v e r a l assig ned * [M ich ig an S t a t e U n i v e r s i t y , Department o f Resource Develop­ m e n t ] , "Proposal f o r Study o f F u t u r e Wat er Resource Needs in M i c h i g a n " [ 1 9 6 8 ] , p. 2 . (Typew ritten.) x lv watershed re g io n s t h a t s u b d i v i d e the e n t i r e s t a t e . * in accord anc e w i t h the c o n t r a c t , a r e p o r t was subm itte d t o th e commission a f t e r s i x months of e x p loratory research. 2 S t a t e s o f Knowledge No s i n g l e s tu d y can a t t a i n the broad r e s e a r c h goal expressed the a fo re m e nt io ne d r e s e a r c h c o n t r a c t . o u t s e t o f t h i s work. theoretical theoretical I re c o g n iz e d t h i s f a c t a t t h e P r i o r g r a d u a t e s t u d i e s had t a u g h t me t h a t d e t a i l e d and a p p l i e d had been conducted f o r in studies little in th e f i e l d o f w a t e r q u a l i t y economics more than a dec ade . concepts about th e economic During t h i s p e r i o d , impacts o f p u b l i c w a t e r p o l l u ­ t i o n c o n t r o l measures had been developed f a s t e r than t h e a b i l i t y o f economists to e s t i m a t e t h e magnitude and in c i d e n c e o f such impacts. It seemed to me from p r e v i o u s study t h a t p r a c t i c a l tic u la rly of l a c k i n g about means to e s t i m a t e th e d i r e c t b e n e f i c i a l improvements b eneficial knowledge was p a r ­ in w a t e r q u a l i t y and about means t o t r a c e both the and a d v e rs e e f f e c t s o f p o l l u t i o n c o n t r o l to t h e f i n a l effects in c i d e n c e upon s e c t o r s o f measures through I n t e r m e d i a t e and f i n a l demand. Maps d e p i c t i n g watershed r eg ion s a r e p r o v id e d in C h a p te r V I . Regions a r e based upon t h e d r a i n a g e p a t t e r n s o f w at er she ds thr oug hou t t he s t a t e in t o the G r e a t Lakes and t h e i r i n t e r c o n n e c t i n g w a t e r s . To a l l o w f o r the use o f r e a d i l y a v a i l a b l e secondary sources o f i n f o r m a t i o n t h a t is r e p o r t e d on a c o u n t y - b y - c o u n t y b a s i s , county bo un da rie s have been used to demarcate re g io n s in s t e a d o f water she d b o u n d a r i e s . 2 R ef e r to R a l e i g h B ar lo w e , Michael M cGuire, and Robert V e r t r e e s , M i c h i g a n ' s Water Resource Needs ( L a n s in g : S t a t e o f M i c h i g a n , Water Resources Commission^ 19 6 9 ) • The a u t h o r ' s e a r l y r e s e a r c h was r e p o r t e d in th e f i n a l s e c t i o n o f t h i s r e p o r t e n t i t l e d " Im p a c t o f Water Q u a l i t y C ontrols." XV Two Ways o f P r oc e ed in g As t h i s study proceeded th r o u g h its n a t i v e means o f approach came i n t o f o c u s . in itia l stages, two a l t e r ­ G e n e ra lly speaking, approaches were seen as d i f f e r e n t ways o f a t t e m p t i n g t o come t o g r i p s w i t h t h e c o m p l e x i t i e s which f a c e r e s e a r c h about t h e economic public w ater p o l lu t i o n c o n tro l approach and a r e g i o n a l measures. selected impacts o f These in c l u d e d a c ase st ud y a pp ro a c h. The case s t u d y method was tho u gh t o f as f o l l o w s . g e o g ra ph ic a r e a s , thes e A fe w small such as m u n i c i p a l i t i e s o r c o u n t i e s , would have been f o r a c o m p a r a t i v e st ud y o f t h e and programs upon t h e i r economies. impacts o f c e r t a i n Selection o f po lic ie s th e s e a r e a s would have been done so as to a l l o w them t o . r e p r e s e n t a r e a s w i t h a range o f differences in f a c t o r s re so ur ce base. such as s i z e , Being r e s t r i c t e d l o c a t i o n , economic s t r u c t u r e , o r t o a few small o f proce eding m ig h t have been a b l e to interview s w ith e n t i t i e s by w a t e r p o l l u t i o n c o n t r o l measures. could p o s s i b l y have been incorporated to be made o f t h e m agn itu de and Such d a t a i n t o methods which a l l o w e s t i m a t e s in c i d e n c e o f e f f e c t s upon numerous s e c t o r s w i t h i n t h i s method include the c o l l e c t i o n o f p r i ­ mary d a t a thr ough q u e s t i o n n a i r e s and f i e l d d ire c tly affected areas, i n d i r e c t as w e l l as d i r e c t th e s e l e c t e d c o m m un iti es . The second appro ach was v i s u a l i z e d as one which would c o n t i n u e to make use o f w at er she d c o n t r a c t even a f t e r r e g io n s d e l i m i t e d In t h e o r i g i n a l t h a t c o n t r a c t had been f u l f i l l e d . were somewhat s i m i l a r to th os e used by th e s t a f f o f Resources Commission when i t and plans o f research These r e g i o n s t h e M ic h i g a n Water f o r m u l a t e d proposed use d e s i g n a t i o n a r e a s Im p l e m e n t a t f o n and e n f o r c e m e n t o f w a t e r q u a l i t y s t a n d a r d s . W i t h i n a few months a f t e r in co rp o rate th e s e th is s t u d y began, fram ework o f research. a pp e a r e d , c o u ld o r g a n i z e c e r t a i n in dicate the from c e r t a i n have t o in form atio n and p r o g r a m s . impact sub­ T h i s framework, it in a way t h a t cou ld a t in cidence o f d i r e c t b e n e fic ia l p o lic ie s rely seemed p o s s i b l e to r e g i o n s as o n e b a s i c s e t o f component groups w i t h i n a g e n e r a l le a s t it To be s u r e , and adv e rs e e f f e c t s th e framework would upon s e c o n d a r y d a t a and d a t a o b t a i n e d from age nc ie s in s t e a d o f p r i m a r y d a t a c o l l e c t e d from d i r e c t l y a f f e c t e d e n t i t i e s . And p r e l i m i n a r y in d ic a tio n s were of e ffe c ts im pa c t gr ou ps and subgroups w i t h i n o n l y one o r a few upon economic s e c t o r s . Yet, o f M i c h i g a n , and in d u s tria l could y i e l d if if that the re g io n a l they could be s ub di vid ed then and s e c t o r a l in J u n e , of regional served as g u i d e l i n e s F u rt h e r m o r e , approach I believed goaf which o r i g i n a t e d t h e Regional Approach th is study began, 1 de cid ed t o c a r r y Impressions gained from i n t e r v i e w s l i t e r a t u r e d u r i n g th e summer and f a l l several c r i t e r i a o f choice. of These c r i t e r i a t o d e c i s i o n s made d u r i n g e x p l o r a t o r y r e s e a r c h — r e s e a r c h which c o n t i n u e d u n t i l set the general approach. review o f 1968 le d t o d e v e lo p m e n t o f these c r i t e r i a th e r e g i o n a l 1968. Only a f e w months a f t e r and a p r e l i m i n a r y sp e c ific t o a n y ongoing re s e a r c h and p l a n n in g e f f o r t C ho ic e o f through w i t h t h e into f a i r l y framework which was e n v i s i o n e d could which s t r o v e t o w a r d a t t a i n m e n t s tu d y in ci de nc e im po rta nt to th e economy I believed th a t f i n d i n g s and c o n c l u s i o n s . become a welcome a d d i t i o n this i t could o n l y d e p i c t th e t h e s e s e c t o r s were c la s s ific a tio n s , useful that t h e summer o f 1971- G enerally f o r t h d e s i r a b l e c h a r a c t e r i s t i c s o f th e f i n a l speaking, o b j e c t i v e s and methods o f f a c t - f i n d i n g r e s e a r c h wh ich wer e bei n g sought out by th e process o f e x p l o r a t o r y r e s e a r c h . I n t e r v i e w s w i t h numerous persons who worked f o r S t a t e o f Michigan a g e n c ie s desired general l e f t me w i t h the impres sion t h a t th e s e persons i n f o r m a t i o n about t h e d i r e c t economic impacts o f p o l i ­ c i e s and programs upon i m p o r t a n t i n d u s t r i e s and s e c t o r s w i t h i n e n t i r e s t a t e and broad s u b s t a t e r e g i o n s . It seemed to me t h a t i n f o r m a t i o n was in much more demand than was d e t a i l e d about d i r e c t and such inform atio n i n d i r e c t e f f e c t s o f measures upon numerous t r i e s and s e c t o r s w i t h i n the indus­ the economies o f s m a l l e r g e o g r a p h ic a r e a s . Y e t , no s i n g l e agency o r c o o r d i n a t e d group o f a g e n c i e s had t h e r e s p o n s i ­ b i l i t y o f co n d u c t in g o r s u p p o r t i n g t h e kind o f such r e g i o n a l studies.^ Both i n t e r v i e w s and l i t e r a t u r e had e x p i r e d r e s e a r c h r e q u i r e d by for in dividual regulatory p o lic ie s i n d i c a t e d t h a t not enough time e n titie s affected to d e t e r m i n e what t h e i r by r e c e n t l y adopted t e c h n o l o g i c response would be to those p o l i c i e s and what m agn itu de o f d i r e c t c o s t s and b e n e f i t s would be a s s o c i a t e d w i t h those p o l i c i e s . fore, led t o the f o r m u l a t i o n o f c r i t e r i a of fin a l This s tu d y 's tim in g, there­ t h a t ex pr es s e d t h e d e s i r a b i l i t y o b j e c t i v e s a t t a i n a b l e by methods which d i d not have t o r e l y upon c o l l e c t i o n o f p r i m a r y d a t a th r o u g h sur veys o f d i r e c t l y a f f e c t e d d i s c h a r g e r s and b e n e f i c i a r i e s . But even though t h e res p on s e s , c o s t s , ^The s t a f f o f th e M ic h i g a n Water Resources Commission was then f o l l o w i n g f e d e r a l g u i d e l i n e s as i t p r e pa r ed r e g i o n a l s t u d i e s p r i o r t o h e a r in gs held around th e s t a t e on v a r i o u s components o f proposed stream s ta n d a r d s . But n e i t h e r these s t u d i e s nor th e s e h e a r i n g s r e s u l t e d in any o r g a n i z e d body o f knowledge about e i t h e r t h e e f f i c i e n c y , d e v e l o p ­ m e n t a l , o r d i s t r i b u t i o n a l Impacts o f stream s t a n d a r d s and r e l a t e d measures. and b e n e f i t s a p p u r t e n a n t t o p a r t i c u l a r e n t i t i e s were not y e t amenable to p r im a r y d a t a c o l l e c t i o n , to s t r i c t e r some g e n e r a l trends in p a t t e r n s o f response r e g u l a t o r y and l i b e r a l i z e d a s s i s t a n c e programs coul d be determined from I n t e r v i e w s and t h e in south ern M ich ig an and o t h e r lite ra tu re . A t r e n d was underway I n d u s t r i a l i z e d areas o f th e c o u n t r y f o r m a n u f a c t u r in g p l a n t s whose w a s t e w a t e r s were amenable to t r e a t m e n t by public f a c i l i t i e s t o send an i n c r e a s i n g s ha r e o f t h e i r d i s c h a r g e s to the l a r g e r m u n i c i p a l t r e a t m e n t wo rks. By so d o i n g , th e s e p l a n t s were a b le to a v oi d d i r e c t r e g u l a t o r y c o n t r o l s o f s t a t e and f e d e r a l w a t e r p o l l u t i o n c o n t r o l a u t h o r i t i e s w h i l e t h e y ga in ed b e n e f i t s that often come from usi n g p u b l i c t r e a t m e n t f a c i l i t i e s . These b e n e f i t s nonmonetary. have t a k e n s e v e r a l f o r m s , bo th m onetary and Not l e a s t among such monetary b e n e f i t s have been co s t savings m a n u f a c t u r e r s have r e c e i v e d because sewer s e r v i c e charges l e v i e d by m u n i c i p a l i t i e s u s u a l l y r e c o v e r e d o n l y t h e u n s u b s id i z e d p o r t i o n of cons tru c tio n c osts, or th a t p o rtio n o f c a p it a l r a i s e d by l o c a l not a l l u n i t s o f go vernment. sizes, c la s s ific a tio n s , li shments c o u ld a v o i d d i r e c t s u b s id ie s by s h i f t i n g to p u b lic u t i l i t y fa llin g E arly which had to be research indicated that and l o c a t i o n s o f m a n u f a c t u r i n g e s t a b ­ r e g u l a t o r y c o n t r o l s and g a in b e n e f i t s from t h e i r e m is si o n o f d i s c h a r g e s from p u b l i c w a t e r s sewers. Rather, such adv a nt a ge s were n o t i c e d to be i n c i d e n t p a r t i c u l a r l y upon p l a n t s whose w a s t e w a t e r s were o f a volume and c h a r a c t e r or b i o l o g i c a l , in M i c h i g a n . t h a t made them amenable t o t r e a t m e n t by s e co nd a r y , processes u t i l i z e d by most o f t h e l a r g e r towns and c i t i e s i e x pec te d t h a t a p r o p e r l y s t r u c t u r e d r e se a r ch coul d o r g a n i z e inform atio n framework o f in a manner which would g i v e x ix em pirical the embodIment t o t h e s e p r e v i o u s l y In c i d e n c e o f d i r e c t programs. Moreover, it effects from r e g u l a t o r y p o l i c i e s and s u b s id y seemed t o me t h a t t h e same fr am ew or k c o u l d be used t o s t r u c t u r e s ta tis tic a l hypotheses abou t t h e incidence o f d i r e c t t u r i n g p l a n t s from M i c h i g a n ' s a l l o w s f i x e d components o f tiv e ly methods des igned b en efits to t e s t c e r t a i n r e c e i v e d by manufa c­ t a x ex emption program. in d u s tria l to be exempted from p r o p e r t y , hypotheses t h a t r e c o g n i z e d o b s e r v a t i o n s a bo u t s ales, T h i s program water p o llu tio n control and use t a x e s . such exem ptio ns had been a p p l i e d l a r g e m a n u f a c t u r i n g p l a n t s and by p l a n t s fa c ilitie s In terv iew s le d to f o r p r i m a r i l y by r e l a ­ located w i t h i n m etrop olitan counties.^ Synopsis o f F i n a l Exploratory research, O b j e c t i v e s and Methods being gu ide d by c r i t e r i a emphasized th e d e s i r a b i l i t y o f t h e a f o r e m e n t i o n e d research, ended in t h e summer o f st a te m e nt o f f o u r o b j e c t i v e s the f o r m u l a t i o n o f an o v e r a l l Objectives 1971* o f c h o i c e which type o f regional T h i s end was marked by t h e f o r subsequent research a c t i v i t i e s pl an f o r c a r r y i n g o u t and by th os e a c t i v i t i e s . t u r n e d o u t t o be as f o l l o w s : 1. O b j e c t i v e 1 . — To e s t i m a t e t h e p o t e n t i a l the employment s t r u c t u r e s o f shed r e g i o n s , (l) m anufacturing In d u s trie s , d irect impact on (2) w a te r ­ ( 3 ) m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s , ^Development o f t h e s e hypotheses b a s i c a l l y depended upon (1) Ideas about d i f f e r e n c e s among l a r g e and small f i r m s and p l a n t s In the pre s en ce and c a p a b i l i t i e s o f f i n a n c i a l s t a f f s , ( 2 ) c o n j e c t u r e d d i f f e r e n c e s between m e t r o p o l i t a n and n o n m e t r o p o l i t a n c o u n t i e s in th e a d m i n i s t r a t i o n o f p r o p e r t y t a x la w s , and ( 3 ) p r e l i m i n a r y a n a l y s e s o f the kind s o f p l a n t s w h ic h had r e c e i v e d an e x em pt io n p r i o r t o Se pte m ber , 1969, from M i c h i g a n ' s program. xx and (A) th e e n t i r e s t a t e t h a t might have o c c u r r e d the d i r e c t in th e l a t e 1960s if r e g u l a t o r y c o n t r o l s o f th e M ich ig an Water Resources Commission had been s t r i c t l y and im m e di a te ly e n f o r c e d ; 2. fic a tio n s, plants O b je c t ive 2 . — To I d e n t i f y which Standard em pl oy m e nt -s iz e c a t e g o r i e s , In d u strial and l o c a t i o n s o f m a n u f a c t u r i n g in Michigan have been most a b l e to r e c e i v e b e n e f i c i a l effects from v a r i o u s subsidy programs which h e lp pay t h e co s ts o f b u i l d i n g public water p o llu t i o n co n tro l 3- fa c ilitie s ; O b j e c t i v e 3 - ~ “To i d e n t i f y which Standard In d u strial C lassi­ f i c a t i o n s , e m p lo y m e nt -s iz e c a t e g o r i e s , and l o c a t i o n s o f m a n u f a c t u r i n g plants in Michigan have r e c e i v e d th e g r e a t e r b e n e f i c i a l exemptions from th e s t a t e ' s . Objective prog ram;' e f f e c t s of tax and — To recommend f u r t h e r a r e a s o f r e s e a r c h on the economic impacts o f w a t e r p o l l u t i o n c o n t r o l in Michigan and suggest means f o r measures c a r r i e d o u t improving th e p o s s i b i l i t i e s for f u r ­ ther research. Much time spent on e x p l o r a t o r y p r e l i m i n a r y a n a l y s i s o f data c o l l e c t e d and from agency f i l e s a close, and r e c o r d s . re s e a r c h was devoted to the from p u b li s h e d secondary sources When e x p l o r a t o r y r e s e a r c h drew t o t h e r e f o r e , g e n e r a l and s p e c i f i c methods o f a t t a i n i n g t h r e e o f th e above o b j e c t i v e s were a l r e a d y w e l l c o m p le t io n . As summarized VI and Appendix E, on t h e i r way toward in the A b s t r a c t and as d e t a i l e d t h i s work has e s t a b l i s h e d a g e n e r a l rese ar ch whose component . th e f i r s t impact groups and subgroups in Chapter framework o f in c l u d e ; (1) the % ' o b j e c t i v e s 2 and 3 p e r t a i n to the in c i d e n c e o f b e n e f i c i a l e f f e c t s from s t u d i e d a s s i t a n c e programs which had been r e c e i v e d p r i o r to September, 19&9- C lassi­ en tire sta te, (2 ) water she d no nmetropolI tan c o u n t i e s , in dustries, (5 ) regions, in dividual (k) broad groups o f th e s e size c a teg o rie s o f estab lishm ents. have r e l i e d (3) upon d a t a A ll incorporated s t r u c t u r e p ro v id ed by t h i s groups o f m e t r o p o l i t a n and w a te r-u s in g manufacturing in d u stries, and ( 6 ) employment- s p e c i f i c methods o f research i n t o t h i s framework and upon t h e framework. P o s s i b l e " M u l t i p l i e r 11 E f f e c t s T h i s work has tak en about s i x y e a r s t o c o m p le t e . information incorporated Data and i n t o th e r e s e a r c h framework and methods a p p l y t o th e d i r e c t into s p e c ific i n c i d e n c e o f w o r s t - p o s s i b l e employment losses t h a t m ig h t have occ ur re d in 1968 i f th e d i r e c t r e g u l a t o r y con­ t r o l s o f t h e Michi gan Water Resources Commission had been s t r i c t l y and imm ed iat ely e n f o r c e d . actual in c i d e n c e o f b e n e f i c i a l p r i o r t o September, c le a rly , the T h is d a t a and i n f o r m a t i o n a l s o a p p l y t o the effects t h a t m a n u f a c t u r e r s had r e c e i v e d 1969, from s t u d i e d a s s i s t a n c e programs. the s p e c i f i c magnitude o f v a r i o u s In c i d e n c e o f s t u d i e d e f f e c t s used to d e p i c t t h e p o t e n t i a l in th e m i d - 1 9 7 0 s . T h is i n d i c a t o r s used t o d e p i c t In the l a t e or actual Is , o f course, Quite 1960s can no l o n g e r be incidence o f s i m i l a r e f f e c t s th e case because c o n ti nu ou s change has taken p l a c e s in c e 1968 in most s t u d i e d p o l i c i e s and programs, in responses o f m a n u f a c t u r e r s and m u n i c i p a l i t i e s t o the s e p o l i c i e s and programs, and in th e economic c o n d i t i o n s o f M i c h i g a n , studied substate r e g i o n s , and s t u d i e d im p licatio n s o f such change, in dustries. Notwithstanding the I m a i n t a i n t h a t a l t h o u g h the d a t a and t h i s study is o u t d a te d th e p o t e n t i a l negated. usefulness o f t h i s Reasons behind t h i s p o s i t i o n a r e xx i I i n f o r m a t i o n base o f st ud y is not i m p o r t a n t , and t h e y d e s e rv e explanation if the read er is t o un de rs t a n d t h e n a t u r e , s cop e, and purpose o f t h i s work. S o l u t i o n s to economic problems a s s o c i a t e d w i t h do not o c c u r on a o n c e - a n d - f o r - a 11 b a s i s . Rather, r e s o u r c e use s o c i e t y copes w i t h such problems by a t t e m p t i n g o v e r t i m e t o a r r i v e a t ongoing s o l u t i o n s which t a k e t h e form o f Improvements which i n f l u e n c e t h e use o f in those in s titu tio n a liz e d r e s o u r c e s and t h e a l l o c a t i o n o f b e n e f i c i a l and ad v e rs e e f f e c t s a s s o c i a t e d w i t h t h i s u s e . e x p l o r a t o r y r e s e a r c h ended, to i n i t i a t e improvement a c q u i r e and u t i l i z e th is overridin g incidence o f e f f e c t s groups and subgroups a r e not n e a r l y as patterns of a n a lysis, water p o llu tio n in te n tio n , impacts in the s p ecific upon p a r t i c u l a r fin d ­ impact im p o r t a n t as f i n d i n g s about i n c i d e n c e among v a r i o u s groups and subgroups. perhaps none o f t h e f i n d i n g s o f t h i s fin al s tu d y as an e f f o r t i n f o r m a t i o n and knowledge a bo u t economic ings about t h e r e l a t i v e 1971. when in pro c e s se s whereby S t a t e o f M ic h i g a n a g e n c ie s Seen in t h e l i g h t o f gener al Since August, 1 have looked upon t h i s o f p r e s e n t and proposed measures t o c o n t r o l state. processes represent s t u d y ' s methods w i l l , I t s m a jo r c o n t r i b u t i o n . t h a t p e r t i n e n t S t a t e o f M ic h i g a n a g e n c i e s But in the Suppose, f o r instance, took up th e t a s k o f c o o r d i n a ­ t i n g a l o n g - t e r m r e s e a r c h and p l a n n i n g proce ss des ign ed t o keep them a b r e a s t o f t h e economic measures. impacts o f p u b l i c w a t e r p o l l u t i o n c o n t r o l T h i s s t u d y ' s main r e s u l t from background s tru c tu re o f studied input inform ation into It such an e f f o r t mi gh t then p r o v i d e s about the economic impact groups and subgroups' and from t h e d e t a i l e d ^Much o f t h i s background i n f o r m a t i o n is I n c l u d e d In un p u b li s h e d m an us cri pt s w r i t t e n by t h e a u t h o r . These m a n u s c r i p t s a r e l i s t e d in Appendix A. x x 111 explanation it p r o v i d e s about sources and proc edu re s used t o c o n s t r u c t th e g e n e r a l framework and s p e c i f i c methods o f p r e s e n t a t i o n o f background w e ll in form atio n, be o f most use t o f u t u r e In t h e f i n a l chapter, research. s o u r c e s , and methods cou ld research. recommendations a r e made about s e v e r a l kinds o f s t u d i e s which w a r r a n t f u r t h e r c o n s i d e r a t i o n . s t u d i e s a r e those which would r e p e a t c e r t a i n work using updated d a t a . portions o f t h is present For Instance, such s t u d i e s migh t r e s e a r c h frameworks a new mix o f and subgroups, a d i f f e r e n t th is than those included present study. The most f a r - r e a c h i n g l o n g - t e r m c o n t r i b u t i o n o f t h i s work could end up b e in g t h e " m u l t i p l i e r " e f f e c t conduct o f a d d i t i o n a l and measures a d m i n i s t e r e d it has in s t i m u l a t i n g improved r e s e a r c h on t h e e f f i c i e n c y , m e n t a l , and d i s t r i b u t i o n a l in t h e s t a t e o f M i c h i g a n . develop­ Such an e f f e c t would in ten tion of in processes o f a c q u i r i n g and u t i l i z i n g knowledge about economic th e impacts o f p u b l i c w a t e r p o l l u t i o n c o n t r o l c e r t a i n l y j u s t i f y choice o f the o v e r r id in g improvement impact groups s e t o f s t u d i e d p o l i c i e s and pr og ram s, and measures o f a more c o m pl e te range o f economic e f f e c t s w ithin Among thes e O t h e r suggested s t u d i e s would r e v i s e and expand upon t h i s p r e s e n t wo rk. in c l u d e w i t h i n t h e i r In sum, t h e impa cts . xx i v in itia tin g i n f o r m a t i o n and PART I PERSPECTIVE I CHAPTER I ORGANIZATION Intent D i s s e r t a t i o n s , u n l i k e c e r t a i n o t h e r w o r k s , a r e seldom read from t h e f i r s t page through t o th e l a s t . tions are t y p i c a l l y interested e i t h e r Rather, in g e n e r a l m a t t e r s s t u d y ' s broad scope, p r o c e d u r e s , and r e s u l t s ) of specifics tio n s). readers o f d i s s e r t a ­ (such as p a r t i c u l a r methods, o r about {such as a it s discussion f i n d i n g s , and recommenda­ Any g i v e n d i s s e r t a t o n may c ov e r a wi de range o f t o p i c s , whereas th e t y p i c a l c e rta in of reader is Interested in what is s a id about o n l y th e covered t o p i c s . T h i s c h a p t e r g i v e s a p r e v i e w o f th e scope and c o n t e n t o f t h e parts, chapters, and appendices in cl u d e d h e r e i n . It p r o v i d e s an i n t r o ­ d u c t i o n to th e manner by which the se b a s i c s u b d i v i s i o n s a r e o r g a n i z e d and i n t e r r e l a t e d . Its intent is t o g u id e each i n d i v i d u a l those p a r t s , c h a p t e r s , and appendices which may c o n t a i n about t o p i c s he is p e r s o n a l l y interested reader to inform ation in. Parts The main body is d i v i d e d tive, (2) into f i v e From Goals t o O b j e c t i v e s , Designed t o A t t a i n O b j e c t i v e s , A ttain O bjectives, and ( 5 ) (*t) (3 ) parts e n t i t l e d (1) P e r sp ec ­ Scope and Method o f Research R e s u lt s o f Research Designed t o Summary, C o n c l u s i o n s , and Recommendations. These p a r t s g e n e r a l l y correspond to t h e f i v e ma jor t o p i c s which a r e 3 u s u a l l y taken up in th e main body o f theses and d i s s e r t a t i o n s . o t h e r words, th e s e p a r t s r e s p e c t i v e l y p r e s e n t what c l o s e l y resemble the ( 1 ) settin g , and (5) summary, c o n c l u s i o n s and recommendations o f many the ses and d issertations. (2 ) In review o f lite ra tu re , Whereas some s i m i l a r works per each o f th e s e f i v e topics, or t h r e e c h a p t e r s per each o f ( 3 ) methods, I n c l u d e o n l y one c h a p t e r this d issertation its fin ding s, (h) in c l u d e s e i t h e r two f i v e p a rts f o r a t o t a l o f twelve chapters. C h a p t e r - b y - C h a p t e r P r e vi e w A b r i e f c h a p t e r - b y - c h a p t e r p r e v ie w o f th e e le v e n c h a p te r s is now g i v e n . Chapters a r e int ro du c e d w i t h i n devoted t o each p a r t o f t h e main body. to v a r i o u s c h a p t e r s a r e a l s o re maining su bs e c tio n s Appendices which lend support i n t ro d u c e d w i t h i n th e c o n t e x t o f a p p r o ­ p r i a t e subsections. Part C ha pt e r II I: Perspective rounds ou t P a r t lem s i t u a t i o n which led t o i by d e s c r i b i n g in itia tio n of this des c rib e d by p o i n t i n g out th e s u b s t a n t i a l r e g u l a t o r y p o l i c i e s and su bsidy programs c o n t r o l were having in th e m id - to l a t e th e study. immediate prob­ This s e t ti n g i n f l u e n c e which f e d e r a l In th e f i e l d o f w a t e r p o l l u t i o n 1960s upon programs a d m i n i s ­ te red o r c o o r d i n a t e d by t h e M ic hi ga n Water Resources Commission. the r e s u l t o f several 1966, f e d e r a l r e g u l a t i o n s became much s t r i c t e r w h i l e f e d e r a l to m u n i c i p a l i t i e s federal increased a c t s passed p r i m a r i l y d u r i n g rap id ly. is Stream s ta nd a rd s were as th e f o u n d a t i o n o f M i c h i g a n ' s r e g u l a t o r y programs f o r As 1965 and subsidies In stituted th e f i r s t t im e in a f o r t y - y e a r h i s t o r y o f c o n t r o l l i n g w a t e r p o l l u t i o n by a commission. Compared to. what was known about economic ad hoc means o f r e g u l a t i n g individ ual was known about t h e p o t e n t i a l might b r i n g a b o u t . Impacts from t h e p r e v i o u s e f f l u e n t d i s c h a r g e s , much less impacts t h a t e n f o r c e d U n c e r t a i n t y about t h e impacts o f s t a n d a r d s and r e l a t e d measures caused t h e commission t o which has been expanded in itia te laws r e f e r r e d to in t h i s wo rk. li s t i n g o f federal Ch apter X t l which updates p o l i c i e s and programs to t h e i r Part II: ob jectives. of exploratory portray a l l l i t e r a t u r e and o f choice. research. to s p e c i f i c that exploratory 1973. fin al r e s e a r c h was based i n t e r v i e w s and was guided by e x p l i c i t l y Ch apt er By i t s e l f , III begins P a r t I I w i t h a summary however. Ch apt er III does not th e v a r i o u s c o n s i d e r a t i o n s which led t o the c h o i c e o f a study about an a s p e c t o f d i s t r i b u t i o n a l IV accompanies Ch apter need f o r late known t h a t e x p l o r a t o r y r e s e a r c h n a r ­ I t a l s o has e x p l a i n e d stated c r i t e r i a and includes a sectio n s t a t u s as o f st udy from a broad o r i g i n a t i n g goal upon 'a r e v i e w o f study From Goals t o O b j e c t i v e s The P r e f a c e has made i t rowed t h i s th e o r i g i n a l i n t o t h i s wo rk. Appendix B p r o v i d e s a c h r o n o l o g i c a l Michigan stream s t a n d a r d s II! w ith in Part impacts. II. s t u d i e s about t h e d i s t r i b u t i o n a l C o n s e q u e n tl y , Ch apt er C ha pt e r IV documents the impacts no t o n l y o f p u b l i c w a te r p o l l u t i o n c o n t r o l measures but a l s o o f a wi de range o f p u b l i c p o l i c i e s and programs. The a u t h o r ' s recognition of t r ib u tt o n a l- im p a c t s tu d ies --a n d his abiding i n f l u e n c e d the d i r e c t i o n which e x p l o r a t o r y in tere s t the need f o r d i s in such s t u d i e s - - r e s e a r c h t oo k . 5 Appendices C and D r e l a t e t o t h e process by which g o a l s were narrowed to o b j e c t i v e s . They In c l u d e i n f o r m a t i o n abou t Interview s conducted d u r i n g e x p l o r a t o r y r e s e a r c h and p r o v i d e c o p i e s o f form l e t ­ t e r s which guided c e r t a i n Part To f u l l y interview s. III: Scope and Method o f Research Designed to A t t a i n O b j e c t i v e s understand t h e scope and n a t u r e o f methods designed to a t t a i n sp ecific essential features o f d is tr ib u tio n a l impacts. Ch apter V f a c i l i t a t e s s ta rts o f f Part d istrib u tio n a l study o b j e c t i v e s , one must be a b l e to r e c o g n iz e some III by b r i e f l y impacts and o f s t u d i e s about such r e c o g n i t i o n o f th e s e e s s e n t i a l s . r e v i e w i n g some e s s e n t i a l impacts and d i s t r i b u t l o n a l - i m p a c t concepts about studies. Chapter V and i t s companion, Chapter V I , one is It From r e a d in g in t ro du c e d to the ba sic scope and n a t u r e o f v a r i o u s study methods. Chapter VI In t h i s study. programs, it describes the regional impact subgroups used Then, a f t e r a b r i e f r e v i e w o f s t u d i e d p o l i c i e s and summarizes th e r e se a r ch de s ig n and s p e c i f i c methods used t o p o r t r a y the programs. firs t in c i d e n c e o f s t u d i e d e f f e c t s from th e s e p o l i c i e s and The r e v i e w o f methods p ro v id ed by Ch a pt e r VI the e x p l i c a t i o n o f sources and procedures g iv e n appendix o u t l i n e s designed to a t t a i n is based upon in Appendix E. T h is the s t e p - b y - s t e p processes f o l l o w e d by methods each o f th e f i r s t three o b je c tiv e s . Appendix E is t o e x p l a i n t h e methods used in t h i s The i n t e n t o f study w e l l enough t o enable subsequent r e s e a r c h e r s t o u p d a t e , extend upon, and r e v i s e p o r ­ tions o f t h i s study a t p e r i o d i c f u t u r e c l o s e l y a s s o c i a t e d w i t h Appendix E f o r in terv a ls . Appendix F is I t explains th e c l a s s l f i c a t l o n a l 6 scheme o f m a n u f a c t u r in g industries in c o r p o r a t e d i n t o th e r e se a r ch framework. Part Part IV: R es u lts o f Research Designed To A t t a i n O b j e c t i v e s IV is comprised o f Chapters V I I , q u a l i f i e s as a " f i n d i n g s " c h a p t e r s inc e re search designed t o meet the f i r s t These t h r e e o b j e c t i v e s , it w ill reports and IX. Each the f i n d i n g s o f three o b je ctiv es o f th is be r e c a l l e d the d e s i r e t o l e a r n about the d i r e c t adverse e f f e c t s from s t u d i e d it V III, st udy . from th e P r e f a c e , express in ci de nc e o f e i t h e r c e r t a i n regulatory p o lic ie s or c e rta in b eneficial e f f e c t s from s t u d ie d a s s i s t a n c e programs. Chapter V I I sents is w r i t t e n w i t h r e f e r e n c e t o O b j e c t i v e 1. i n f o r m a t i o n b e a r in g upon th e in c i d e n c e o f p o t e n t i a l e ffec ts resulting It pre­ ad v e rs e from r e g u l a t o r y c o n t r o l s a d m i n i s t e r e d by the Michigan Water Resources Commission upon e f f l u e n t d i s c h a r g e s e m i t t e d d i r e c t l y by manuf ac tur ing p l a n t s by Chapter V I M . to i n d i c a t e the into public waters. O b j e c t i v e 2 is then approached Th is c h a p t e r r e p o r t s th e r e s u l t s o f methods designed in cid en ce o f b e n e f i c i a l effects in d ire c tly by ma nu fa c tu rin g p l a n t s from s u b s i d i e s gi ven d i r e c t l y p u b l i c works. Chapter IX completes P a r t IV. by p r e s e n t i n g t e s t s o f hypotheses about th e effects r e c e i v e d by m a n u f a c t u r in g p l a n t s r e c e iv e d in support o f I t a t t e n d s to O b j e c t i v e 3 in c i d e n c e o f b e n e f i c i a l from M i c h i g a n ' s t a x exemption program. Three a pp e nd ic e s- -A pp e n dI c e s G through in P a r t IV. I — rela te to the chapters Appendix G in cl ud e s d e t a i l s o f assumptions and l i m i t a t i o n s o f methods whose f i n d i n g s a r e r e p o r t e d in Chapters V I I and V I I I . Some 7 case stu dies about the increased use o f p u b l i c t r e a t m e n t w orks f a c t u r i n g pl an ts a r e presented I in Appendix H. A ppendix s e n s i t i v i t y analyses o f c h i- s q u a r e t e s t s whose o r i g i n a l reported in Chapter Part V: provides v e r s i o n s ar e IX. Summary, Conclusions and R e c o m m e n d a t i o n s Many readers may want to skim o r s k i p t h e c h a p t e r s appendices o f Pa rts Part V. study. by manu­ These f i n a l I through IV and tu r n to the t h r e e chapters present the h i g h l i g h t s They summarize the study, draw c o n c l u s i o n s a nd related c h a p t e r s of of th is from its e n tire fin d in g s, o f f e r recommendations about the a d m i n i s t r a t i o n and c o o r d i n a t i o n o f p e r t i n e n t p o l i c i e s and programs, and make r e c o m m e n d a t i o n s fo r research. conclu sions, Chapter X provides the summary, Cha pte r X I and Chapter X I I th e further the recommendations. The f i n a l appendix, Appendix J , adds p e r s p e c t i v e conclusions given in Chapter X I . This appendix p r o v i d e s about the r e l a t i v e economic importance o f d i f f e r e n t in d u s t r ie s to Michigan's economy. It also reports in 1968. c e rta in in form atio n m a n u fa c tu rin g the a l l discharges in t o Mic hi gan 's pu bl ic w a t e r s which w e r e manufacturing pl an ts to p r o p o r t i o n of e m itte d by CHAPTER I I SETTING I n t r o d u c t ion D ur in g t h e ments la s t ten t o f i f t e e n years, in p a r t i c u l a r have been s u b j e c t e d in itia te federal and s t a t e g o v e r n ­ to s t r o n g p o l i t i c a l demands to p u b l i c p o l i c i e s which cou ld p r o t e c t and r e s t o r e w a t e r q u a l i t y . ' In response to th e s e demands, federal and s t a t e w a t e r p o l 1u t i o n c o n t r o l measures have undergone much expa nsio n and cha nge, e s p e c i a l l y s i n c e 1965. Former p u b l i c means o f managing w a t e r q u a l i t y have s i n c e been replaced, amended, o r augmented by new p o l i c i e s and programs. S tric te r r e g u l a t o r y p o l i c i e s and l i b e r a l i z e d a s s i s t a n c e programs st and o u t among these new measures. T h i s st ud y began in mid -1968 when th e s e p a r a t e s t a t e s were responding to r e q u i r e m e n t s and ena ct ed in 1965 and 1966. inducements o f m a jo r f e d e r a l State reguta to ry bodies, Michigan W at er Resources Commission, were f i n d i n g tory guidelines changes t h e y were f o l l o w i n g were r e s u l t i n g in fo r m er means o f c o n t r o l . about r a p i d l y , le g is la tio n such as th e that federal regula­ in s u b s t a n t i a l Because th e s e changes had come no t much ti m e was a v a i l a b l e scholarly evaluation of t h e ir p o te n tia l f o r any d e t a i l e d and economic im pa c t. Consequently, ' a l u c i d t r e a t m e n t o f th e p o l i t i c a l a s p e c t s o f w a t e r p o l l u t i o n and o t h e r e n v i r o n m e n t a l p o l l u t i o n problems is p r o v id e d by J . C l a r e n c e D a v i e s , I I I , The P o l i t i c s o f P o l l u t i o n ( R a c i n e , W i s . : Western Pub­ l i s h i n g C o . , 1970) . concern was f r e q u e n t l y expressed about t h e magnitude o f m igh t be caused by s t r i c t impacts which enf or c e m e nt o f newly adopted r e g u l a t o r y po 1 i c I e s . T h i s st udy owes its o rig in s t o such concerns h e ld by th e M ic h i g a n Water Resources Commission and by many e n t i t i e s whose w a s t e w a t e r s regulated. T h i s c h a p t e r summarizes t h e s e t t i n g o f greater d e ta il than t h a t g i v e n in th e P r e f a c e and P e r t i n e n t Changes thes e o r i g i n s in C h a p t e r In R e g u l a t o r y P o l i c i e s It in I.' 2 P r o v i s i o n s o f t h e Fede ra l Wate r Q u a l i t y Act o f 1965 Fundamental changes in t h e means by which w a t e r b o r n e waste d i s - c ha rg es a r e r e g u l a t e d th ro u g h o u t t h e U n i t e d S t a t e s came about a f t e r enactment o f the Water Q u a l i t y Act o f 1965-^ T h i s a c t amended the T h i s c h a p t e r is a summary o f s e v e r a l un p u b l is h e d m a n u s c ri p ts t h e a u t h o r has w r i t t e n about f e d e r a l and M ic h ig a n p o l i c i e s and programs. The t i t l e s o f th e s e m a n u s c r i p t s a r e l i s t e d in Appendix A. 2 Fed e ra l p o l i c i e s and programs r e f e r r e d to In t h i s and the n e x t two s e c t i o n s a r e reviewed by ( l ) John A. B l a t n i k , " H i s t o r y o f Fede ra l P o l l u t i o n C o n t r o l L e g i s l a t i o n , " Ch a pt e r 2 in H e r b e r t F. Lund, e d . f I n d u s t r i a l P o l l u t i o n C o n t r o l Handbook (New Yo rk : M c G r a w - H il l Book C o . , T 97 1; { 2 ) Robert A. Canham, " S t a t u s o f Federal Water P o l l u t i o n C o n t r o l L e g i s l a t i o n , " J ou rna l Water P o l l u t i o n C o n t r o l F e d e r a t i o n , V o l . 38 , No. 1 ( J a n . , 1 9 6 6 ) , ppT 1 - 8 ; ( 3 ) S t a n l e y E. D e g l e r and Sandra C. Bloom, F e d e r a 1 P o l l u t i o n C o n t r o l Programs: W a t e r , A i r and S o l i d Wastes (Wash ingto n, D, C. : Bureau o f N a t i o n a l A f f a i r s , I n c . , 1969) ; PTJ Leonard B. Dworsky, " A n a l y s i s o f Fe de ra l Water P o l l u t i o n C o n t r o l L e g i s l a t i o n , 1 9 ^ 8 - 1 9 6 6 , " J o u r n a l American Water Works A s s o c i a t i o n , V o l . 5 9 . No. 6 (J u n e , 1967)» pp. 6 5 1 - 6 6 8 ; and ( 5 ) A l l a n H i r s c h , ' James L. Agee, and Robert S. Burd, " W a te r Q u a l i t y S t a n d a r d s : The Fed e ra l P e r s p e c t i v e — Pr ogr es s toward O b j e c t i v e s , " J ou rna l Water P o l l u t i o n C o n t r o l F e d e r a t i o n , V o l . ^ 0 , No. 9 ( S e p t . , 1 9 6 8 ) , pp. 1 6 0 1 - 1 6 0 6 . 3 A c h r o n o l o g i c a l l i s t o f a l l f e d e r a l and M ich ig an laws r e f e r r e d t o in t h i s d i s s e r t a t i o n is p ro v id ed by Appendix B. T h i s l i s t g i v e s the co m p le t e c i t a t i o n o f each law. In a d d i t i o n , Appendix B i n c l u d e s a c t s which a r e r e f e r r e d to in t h e un p u b l is h e d m a n u s c r i p t s mentioned above in f o o t n o t e 1. 10 Federal W a te r P o l l u t i o n 6 6 0 , by v i r t u a l l y water q u a l i t y Control 1 9 5 6 , commonly known as P . L . r e q u i r i n g each s t a t e t o p r e p a r e and a d o p t s t a n d a r d s as t h e f o u n d a t i o n o f The 1965 a c t a u t h o r i z e d approved A ct o f in te rs ta te federal its 84- in terstate r e g u l a t o r y program. e n f o r c e m e n t a c t i o n s when f e d e r a l l y s t a n d a r d s wer e no t a d e q u a t e l y e n f o r c e d by th e states. Response t o t h e 1965 Act In response t o t h e in ters ta te 1965 a c t , s t a n d a r d s and s u b m it t e d By m i d - 1969 , t h e in te rs ta te in t h e i r e n t i r e t y or raised n a tio n a l for each s t a t e p r e p a r e d and adopted them t o Washington f o r a p p r o v a l . s t a n d a r d s o f e v e r y s t a t e had been approved t h e most p a r t . ^ These s t re a m s t a n d a r d s and s t a t e w a t e r q u a l i t y o b j e c t i v e s and b r o u g h t abo ut a g r e a t e r d e g r e e o f u n i f o r m i t y between s t a t e programs o f w a t e r q u a l i t y control. i t more d i f f i c u l t As a r e s u l t , local t a x p a y e r s found to avoid paying t h e c o s t s o f w a t e r p o l l u t i o n c o n t r o l w o r k s . F u r t h e r m o r e , much o f th e e f f e c t i v e n e s s was removed from l o n g - s t a n d i n g threats estab lishm ents out o f s t a te s or regions w ith s t r i c t e r to move r e g u l a t i o n s and enforcements. Faced w i t h t h e n e c e s s i t y o f pa y in g p o llu tio n c o n t r o l , municipal Congress and s t a t e and le g is la tu re s T h e i r e f f o r t s were s u c c e s s f u l . in d u s tria l in c r e a s e d c o s t s o f w a t e r i n t e r e s t groups p r e s s u r e d for fin an cia l assistance or tax r e l i e f . L e g i s l a t i v e e n a c tm e nt s p r o v i d e d such ' i n f o r m a t i o n ab ou t t h e number o f s t a t e s w h ic h had s t a n d a r d s approved in whole o r in p a r t is g i v e n by U . S . , C o m p t r o l l e r G e n e r a l , " E x a m i n a t i o n i n t o t h e E f f e c t i v e n e s s o f th e C o n s t r u c t i o n Gr an t Programs f o r A b a t i n g , C o n t r o l l i n g , and P r e v e n t i n g P o l l u t i o n " ( W a s h in g t o n , D . C . : Nov. 3 . 1 9 6 9 ) , p. 163. (M im e o g r a p h e d .) n he lp even b e f o r e i n t e r s t a t e standards o f s u b m it t e d f o r f e d e r a l adopt s t a n d a r d s f o r approval In divid ual and b e f o r e many s t a t e s had chosen t o i n t r a s t a t e w a t e r s as w e l l . In c r e a s e d A s s i s t a n c e to M u n i c i p a l i t i e s 1965 and 1366 In f e d e r a l p r o ­ Much e x p a n s io n to o k p l a c e d u r i n g grams which s u b s i d i z e local water p o llu tio n co n tro l Clean Wa ter R e s t o r a t i o n A c t o f additions P.L . in g r a n t s a l l o c a t e d 8 ^ - 6 6 0 g r a n t s program. fa c ilitie s . The 1966 was r e s p o n s i b l e f o r s u b s t a n t i a l to local governments under th e e x i s t i n g This a c t a ls o which promised much g r e a t e r c o s t - s h a r e s lo c a t e d s t a t e s had been in c l u d e d to municipal in ce n tiv e provisions t r e a t m e n t works in s t a t e s which c o u l d pay a minimum s har e o f c o n s t r u c t i o n c o s t s . Subsidy programs a d m i n i s t e r e d by t h e A p p a l a c h i a n R egi on al Economic Development A d m i n i s t r a t i o n , Farmers' Commission, Home A d m i n i s t r a t i o n , the Housing and Home F i n a n c e Agency came i n t o e x i s t e n c e a f t e r sage o f s e p a r a t e w ith regard le g is la tio n . to s i z e s , of p o llu tio n control These programs d i f f e r industries fa c ilitie s had t o w a i t u n t i l water p o l l u t i o n la te them to o b t a i n c o n t r o l w o rk s . to federal In dustries l e g i s l a t i o n would h o ld t h a t in 1969 f o r ena ctment o f a f e d e r a l special Federal tax re lie f P rio r *Rapid d e p r e c i a t i o n Reform Act o f 1969. to 19 69, f o r e x p e n d i t u r e s on income t a x r e g u l a t i o n s were then amended t o a l l o w r a p i d d e p r e c i a t i o n o f c e r t a i n treatment f a c i l i t i e s . * su b stan tially which t h e y s u p p o r t . in terp retatio n of law which a l l o w e d the pas­ t y p e s , and l o c a t i o n s o f m u n i c i p a l i t i e s and t y p e s P rovision of A ssistance A s tric t and in d u s tria l how eve r, m a n u f a c t u r i n g p r o v i s i o n s were included w i t h in w as te in dustries the Tax 12 In p a r t i c u l a r had been a b l e t o b e n e f i t i n d i r e c t l y from s u b s i d i e s re c e iv e d from f e d e r a l and s t a t e programs o f f i n a n c i a l m u n icip alities. i n d i r e c t a s s i s t a n c e to This a s s i s t a n c e to i n d u s t r y had been a v a i l ­ a b le f o r y e a r s because sewer s e r v i c e charges l e v i e d by m u n i c i p a l i t i e s did not n o r m a l l y r e co ve r t h a t p o r t i o n o f c o n s t r u c t i o n c o s t s p a id by federal or s t a t e s u b s i d i e s . ^ of federal a s s i s t a n c e to In a d d i t i o n in dustries, to the aforementioned by t h e l a t e 1960s, about o n e - h a l f o f the s t a t e s o p e r a t e d programs a l l o w i n g t a x r e l i e f e x p e n d i t u r e s on w a t e r p o l l u t i o n c o n t r o l fa c ilitie s . P o l i c i e s and Programs Adopted for in d u s tria l 2 in M ic hi ga n M ich ig an became one o f th e s t a t e s which adopted a i l types o f p o l i c i e s and programs r e f e r r e d to above . l e g i s l a t u r e a u t h o r i z e d a t a x r e l i e f program. types 3 In 1966, three th e s t a t e T h i s program p e r m it s Th is was le a r n e d from the i n t e r v i e w s l i s t e d in Appendix C and from the f i r s t two annual r e p o r t s in the " c o s t - o f - c i e a n - w a t e r s e r i e s " prepared by the Federal Water P o l l u t i o n C on tr ol A d m i n i s t r a t i o n . Refer to U . S . , Department o f t h e I n t e r i o r , Fede ra l Water P o l l u t i o n C o n tr o l A d m i n i s t r a t i o n , The Cost o f Clean W a t e r , V o l . I I , Deta i 1ed A na ly s i s (Washington, D . C . : Government P r i n t i n g O f f i c e , 1 9 6 8 ) , pp. 7 0 " 7 6 ; and U . S . , Department o f th e I n t e r i o r , Federal Water P o l l u t i o n C o n t r o l A d m i n i s t r a t i o n , The Cost o f Clean Water and I t s Economic Im p a c t , V o l . 1, The R ep or t: 1969 (Washington, D . C . : Governmen t P r i n t i ng Of f i c e , 1 9 6 9 ) , pp. 26 and *48-51 . See a l s o U . S . , Working Committee on Economic Incen­ t i v e s o f th e Federal C o o r d i n a t i n g Committee on th e Economic impact o f P o l l u t i o n Abatement, "Cost Shar ing w i t h I n d u s t r y ? " Summary Report o f t h e Committee ( r e v . ) (W as hington, D . C . , 1 9 6 7 ) , PP- 8 and 9 (mimeographed); and U . S . , Department o f I n t e r i o r , Fe de ra l Water P o l l u t i o n C o n t r o l Admin­ i s t r a t i o n , " I n c e n t i v e s t o I n d u s t r y f o r Water P o l l u t i o n C o n t r o l : Policy C o n s i d e r a t i o n s " (Washington, D . C . , 1 9 6 7 ) , p. 9 . (Mimeographed.) 2 I n f o r m a t i o n about s t a t e ta x r e l i e f programs which e x i s t e d d u r ­ ing th e l a t e 1960s is g i v e n by Research I n s t i t u t e o f A m e r ic a , "A Small Company Program on A i r and Water P o l l u t i o n , " n . p . , November 2 5 , 1968. (M imeographed, ) 3 Acts o f P r o v i s i o n s o f t h i s program a r e s p e l l e d o u t by Act 2 2 , 1966. Public 13 industrial establishm ents a p p l i c a b l e to p r o p e r t y , t o a p p l y f o r ta x e x e m p t i o n c e r t i f i c a t e s sale s , t h e i r water p o l l u t i o n c o n t r o l and use taxes on f i x e d fa c ilitie s . the s t a t e approved a s t a t e - f i n a n c e d Then, in 1 9 68 v o t e r s F in a lly , from I 967 t h r o u g h adopting water q u a l i t y waters. 2 In a d d i t i o n h o l d i n g hea ring s o n , standards to the fe d e ra l throug h and influence e x e r t e d enforcement c o n fe r e nc es . Between 1962 and I 969 , the and through these h a s been f e d e r a 1- s t a t e fiv e had been held or convened w h i c h d e a l t w i t h p o l l u t i o n conferences of the D e tro it and Menominee Rivers and La k e s E r i e , Mic hi ga n, and S u p e r i o r . three of the confer ences p e r t a i n i n g the in tra s ta te stream standards, the r e g u l a t o r y program o f th e c o m m i s s i o n a f f e c t e d by the recommendations and conclu sions o f 1969, re v ie w in g , f o r both i n t e r s t a t e pro­ 8 ^ -6 6 0 grants Michigan Water Resources Commission and i t s s t a f f w e n t formal process o f p r e p a r i n g , in bond program w h i c h p r i m a r i l y vides grants to m u n i c i p a l i t i e s which supplement P . L . f o r wastewater t r e a t m e n t w o r k s . ^ components of t o the Great L a k e s A ll re s u lte d specific e f f lu e n t standards which apply a c ro s s -th e -b o a r d to pal or i n d u s t r i a l d i s c h a r g e s the l o c a t e d along w a t e r s w i t h i n a ll in m unici­ 3 conferences' j u r i s d i c t i o n s . ^Refer to Act 75» P u b l i c A ct s o f I 968 , f o r Michigan's g ra nt programs. p ro v is io n s of 2 F i n a l l y adopted i n t e r s t a t e standards a r e r e p o r t e d i n S t a t e o f Michigan, Water Resources Commission, Water Q u a ! i t y S t a n d a r d s f o r M i c h i ­ gan Waters (As D e s ig na te d) ( L a n s i n g : r e v . June, 19f>7) F i na 1 1 y adopted i n t r a s t a t e standards a r e r e p o r t e d in S t a t e o f M i c h i g a n , W a t e r Resources Commission, Water Q u a l i t y S t a n d a r d s f o r Michigan I n t r a s t a t e W a t e r s (Lansing: January 31 % 1 9 6 8 ) . 3 P o l i c i e s which r e s u l t e d from these t h r e e c o n f e r e n c e s a r e given by (1) U . S . , Department o f t h e I n t e r i o r , Federal W a t e r P o l l u t i o n Co ntrol A d m i n i s t r a t i o n , Conference on t h e M a t t e r of P o l l u t i o n o f L a k e M i c h i g a n 14 I n f l u e n c e s o f F e d e r a l l y Induced Stream and E f f l u e n t Standards on Commission Pr act ice s Procedural Comments Stream and e f f l u e n t s t a n d a r d s r e p r es e n t the most s u b s ta nt ia l changes ev er made in means o f r e g u l a t i n g a g a in s t water p o l l u t i o n Mich ig a n. resulted U n c e r t a i n t y about t h e economic e f f e c t s o f these changes in i n i t i a t i o n of th is and e x t e n t o f study. T h is section places the nature t h e s e changes i n t o an h i s t o r i c a l summarizes some p e r t i n e n t a t t i t u d e s in e f f e c t p r i o r ate ly in perspective. toward both the r e g u l a t o r y p o l i c i e s t o the mid-1960s and t h e p o l i c i e s c a r r i e d out thereafter. I t then Important a s p e c t s o f immedi­ the s e t t i n g o f t h i s study are d e p i c t e d by t h e s e c o n t r a s t i n g a t t i t u d e s and by the synopsis of f ede ral in f lu e n c e s w h i c h close s the c h a p t e r . R eg ulatory Policies C a r r ie d Since 1929 , the Michigan Out U n ti l the Mid-1960s l e g i s l a t u r e has entr uste d a commission w i t h r e g u l a t o r y a u t h o r i t y over t h e m a j o r sources of wastes emitted i n t o the p u b l i c w a t e r s o f the s t a t e . From i t s inception u n t i l the mid- 1960s, t h i s commission ( o r i n g a l l y d e s i g n a t e d as a five-member Stream C o n t r o l Commission and r e c o n s t i t u t e d as a seven-member Water Resources Commission in 19 49) re gulated w a s t e d i s c h a r g e r s according to the powers, and I t s T r i b u t a r y B a s i n s , V o l . 7 , P r o c e e d i n g s , Executive Session, Chicago, I l l i n o i s , March 7, 8 and 1 2 , 19 68, pp. 37^5 to 3914; (2) U . S . , Department o f t h e I n t e r i o r , F e d e r a l W a t e r P o l l u t i o n Control Adminis­ t r a t i o n , C o n f e r e n c e Proceedings, P o l l u t i o n o f Lake E r i e and It s T r i b u t a r i e s , F o u r t h Session, C l e v e l a n d , Oh io, October 4 , 1968, pp. 125~ 136; and ( 3 ) U . S . , Department o f t h e I n t e r i o r , Federal Water P o l l u t i o n C o n t r o l A d m i n i s t r a t i o n , Conference in t h e M a tt er o f P o l l u t i o n o f Lake S u p e r i o r and I t s T r i b u t a r y Basin in t h e S t a t e s o f Minnesota, Wisconsin, and Michi gan, P r o c e e d in g s , E x e c u t i v e S e s s i o n , Duluth, Minnesota, September 30 t o October 1 ,■ 1969, pp. 16 5 ~ 2 4 9 . 4 15 p r o c e d u r e s , and d e f i n i t i o n s o f u n la w f u l enabling l e g i s l a t i o n and amendments to t h a t S in c e control its inception, by i t s le g is la tio n .^ th e commission has been a u t h o r i z e d t o e f f l u e n t d i s c h a r g e s by usin g t h e r e g u l a t o r y t e c h n i q u e s o f stream and e f f l u e n t fastly p o llu tio n estab lished r e fu s e d in fle x ib le . 2 the procedures standards. But down th ro ug h th e y e a r s to employ t h e s e t e c h n i q u e s , Instead, inherent un til recent years, it stead­ c l a i m i n g t h e y were too t h e commission made use o f in t h e r i p a r i a n d o c t r i n e o f r e a s o n a b l e use t h a t e v o lv e d from common-law cases involving disputes over water p o l- l u t i o n which M ic hi ga n c o u r t s de cid ed from th e l a t e 1870s t o th e 1920s. The com m is si on 's powers and g e n e r a l o p e r a t i o n a l pr oce dur es a r e c o n t a i n e d in Act 2 4 5 , P u b l i c Acts o f 1929, as amended. 2 Such c l a i m s have been made b e f o r e C on g r e s s io n a l h e a r i n g s and a t f e d e r a 1- s t a t e enf or c e me nt c o n f e r e n c e s . See, f o r e xam pl e, the f o l ­ lowing s t a t e m e n t s : ( l ) " S t a t e m e n t o f M i l t o n P. Adams, E x e c u t i v e S e c r e t a r y , Water Resources Commission, S t a t e o f M i c h i g a n , " and " S t a t e ­ ment o f N i c h o l a s O l d s , A s s i s t a n t A t t o r n e y General o f M i c h i g a n , " in U . S . , Congress, S e n a t e , Committee on P u b l i c Works, Water and Ai r Pol l u t i o n C o n t r o l , H e a r i n g s , b e f o r e a Subcommittee o f t h e Committee on P u b l i c Works, 8 4 t h C o n g ., 1st s e s s . , 1955, pp. 1 2 6 - 1 4 7 ; ( 2 ) " S t a t e m e n t o f N i c h o l a s O l d s , A s s i s t a n t A t t o r n e y G e n e r a l , S t a t e o f M i c h i g a n ; Accom­ pa ni ed by L o r i n g F. Oeming, E x e c u t i v e S e c r e t a r y , Water Resources Commission, S t a t e o f M i c h i g a n , " in U . S . , Cong re ss , House, Committee on P u b l i c Works, Water P o l l u t i o n C o n t r o l A c t Amendments, H e a r i n g s , b e f o r e the Committee on P u b l i c Works, 8 8 t h C o n g . , 1st and 2d s e s s . , 1963 and 1964, pp. 4 7 1 - 5 0 1 ; and ( 3 ) " S t a t e m e n t o f Ralph W. Purdy on B e h a l f o f t h e M ic h i g a n Water Resources Commission," in U . S . , Department o f H e a l t h , E d u c a t i o n , and V / e l f a r e , Co nf e re n c e in t h e M a t t e r o f P o l l u t i o n o f Lake E r i e and i t s T r i b u t a r i e s , V o l . 2 , Proceed i n g s , C l e v e l a n d , O h i o , August 3" HT, 1965 (Wash i n g t o n , D . C . : Government P r i n t i n g O f f i c e , 1 9 6 5 ) . pp. 4 4 9 4 9 9. 3 A r e v i e w o f t h e s e common-law cases is p r o v i d e d by A. A l l a n Schmid, E v o l u t i o n o f M ich ig an Water Laws: Response to Economic D e v e lo p ­ ment , C i r c u l a r B u l l e t i n No. 2 2 7 , M ic hi ga n S t a t e U n i v e r s i t y , A g r i c u l t u r a l Ex per ime nt S t a t i o n , East L a n s in g , i 9 6 0 . Purdy p r o v i d e s a s i m i l a r r e v i e w . Bohunsky summarizes i m p l i c a t i o n s which th e r e a s o n a b l e use d o c t r i n e had upon p u b l i c means o f c o n t r o l l i n g and a b a t i n g w a t e r p o l l u t i o n in M i c h i g a n . See John M. Bohunsky, " F e d e r a l Water Q u a l i t y S t a n d a r d s : A Vehicle fo r 16 These pr oc ed ur es d e a l t w i t h each case o f u n l a w f u l p o l l u t i o n on an ad hoc b a s i s . Ad hoc proc e du re s used by t h e commission up to t h e m id -1 96 0s o p e r a t e d as f o l l o w s . In d iv id u a lly ta ilo re d sets o f e f f l u e n t t i o n s were p l a c e d upon each source o f w a s t e f o l l o w i n g t h e r e a s o n a b le use concepts o f " b a l a n c i n g th e e q u i t i e s " and "comparing t h e During t h i s p r o c e d u r e , of in ju rie s ." th e commission c o n s u l t e d as needed w i t h members i t s own wo rkin g s t a f f , personnel o f the w a s t e d i s c h a r g i n g e n t i t y , o f f i c i a l s o f o t h e r s t a t e a g e n c i e s , and r e p r e s e n t a t i v e s o f ments. to The commission employed inform ation i n f o r m a l l y e s t i m a t e th e b e n e f i c i a l to be br ought about from a l t e r n a t i v e It re s tric ­ cou ld p l a c e upon wr o n g f u l received local from such p a r t i e s and a d v e r s e impacts t h a t levels of e f flu e n t discharges. go ve r n ­ stood restric tio n s These c o s t s and impacts were economic and s o c i a l c o s t s no t r e f l e c t e d in f e d e r a l e x p e n d i t u r e s bu t m a r k e t and n o n - m a r k e t c o s t s g e n e r a t e d t h r o u g h o p e r a t i o n o f t h e program i t s e l f . Th us, t h e s e a r e no t s i m p l e q u e s t i o n s . 9. How a r e program c o s t s d i s t r i b u t e d among t h e burdened groups? 10. What is t h e c u r r e n t d i s t r i b u t i o n o f Incomes and a s s e t s among ( a ) t h e a c t u a l burdened groups and (b) t h e in te n de d o r p o t e n t i a l burdened groups? F i n a l 1y : 11. I n t e g r a t i n g t h e above i n f o r m a t i o n , what a r e t h e a 1t e r n a t I v e s in a c h i e v i n g t h e same program o b j e c t i v e and wh ich a l t e r n a ­ t i v e Is most e f f i c i e n t ; t h a t i s , a t t a i n s t h e same d e s i r e d d i s t r i b u t i o n a l ( o r o t h e r ) impact bu t a t a lo w e r c o s t ? ! The iss ue o f v a l u e s one and s i x . tiv e In t h i s is regard, r a i s e d when a t t e m p t i n g t o answer q u e s t i o n s Bonnen m e n t io n s t h e c o n d i t i o n a l l y norma­ s ta n c e which ec on om is ts sometimes t a k e : The n o r m a t i v e m a t t e r o f who should b e n e f i t o r who shou ld pay i n v o l v e s v a l u e ju dgments which e c on om is ts may no t make as s c i e n ­ tis ts . Of c o u r s e , i f some g e n e r a l s t a t e m e n t o f norms o r o b j e c t i v e s can be p r o v i d e d , th e e c on om is t l i k e any l o g i c i a n can d e v e l o p c e r t a i n c o n d i t i o n a l l y n o r m a t i v e d e d u c t i o n s upon w h ic h to base a d e c i s i o n as t o who should b e n e f i t and who should pay. ! Bonnen , pp. 2 l b ? d . , p. *t25"^26. 5 2 6. Lac king "some g e n e r a l s t a t e m e n t o f norms o r o b j e c t i v e s , " o n l y a l t e r n a t i v e Bonnen men tion s as b e in g a v a i l a b l e is th e p o s i t l v i s t i c stance. the to t h e economist About t h i s a l t e r n a t i v e s t a n c e , he says: The economist . . . may make a s u b s t a n t i a l c l a r i f y i n g con­ t r i b u t i o n I f he can answer q u e s t i o n s two and seven; t h a t i s , who a c t u a l l y does b e n e f i t and who a c t u a l l y is burdened by the c o s t s o f thes e programs. By i n j e c t i n g p o s i t i v e i n f o r m a t i o n o f t h i s n a t u r e i n t o t h e p o l i c y process one o f t e n he lp s produce a c l a r i f i c a t i o n o f th e o b j e c t i v e s . ^ An exchange o f comments between Schmid and Stevens and K a l t e r has p o i n t e d ou t p r a c t i c a l differences in a n a l y t i c a l appro ach t a k e n by a d h e r e n t s t o th e c o n d i t i o n a l l y n o r m a t i v e s t a n c e and t o t h e p o s i t i v i s t i c stance. Ta k in g t h e fo r m er s t a n c e , Schmid holds t h a t t h a t d I s t r i b u t i o n a l - impact s t u d i e s p r o v i d e p o r t i o n s o f th e t o t a l caused by ( I ) (2) the change change it is im p o r t a n t i n f o r m a t i o n abou t t h e p r o ­ in d i s t r i b u t i o n o f n e t e f f e c t s which a r e the r e d i s t r i b u t i o n o f n e t e f f e c t s among g r o u p s , in d i s t r i b u t i o n o f n e t e f f e c t s p r o d u c tiv ity gains. 3 re su ltin g Schmid's comments a r e d i r e c t e d re so ur ce p r o j e c t s . L from pure to th e work by Stevens and K a l t e r which e s t i m a t e s p a t t e r n s o f change in but ion " w i t h " s e v e r a l w a t e r and income d i s t r i - No s e p a r a t e a c c o u n t s , 1 Ibid. 2 R e d i s t r i b u t i o n i m p l i e s p u r e l y d i s t r i b u t i o n a l e f f e c t s a r e bein g t r a n s f e r r e d from one subgroup to a n o t h e r w i t h i n t h e same broad g r o u p i n g . P u r e l y d i s t r i b u t i o n a l e f f e c t s a r e g e n e r a l l y c o n s id e r e d as those caused by p u b l i c t a x , s u b s id y , and c o s t - s h a r i n g p o l i c i e s . 3 p. Schmid, "Changed D i s t r i b u t i o n o f Income Vs. R ed is trib u tio n ," 137. It Stevens and K a l t e r , " E v a l u a t i o n o f P u b l i c In v e s t m e n t s " as d i s ­ cussed in K a l t e r and S t e v e n s , "Resource I n v e s t m e n t s , Impact D i s t r i b u t i o n , and E v a l u a t i o n C o n c e p t s ," pp. 2 0 6 - 2 1 5 As mentioned above , t h e s t u d y by Stevens and K a l t e r d i d not i n c l u d e a w I t h - a n d - w i t h o u t a n a l y s i s . 75 however, a r e g i v e n In t h a t work o f e i t h e r th e r e d i s t r i b u t i o n o f ne t income e f f e c t s o r o f th e change in d i s t r i b u t i o n r e s u l t i n g from p r o ­ d u c t i v i t y gains. K a l t e r and Stevens t a k e t h e p o s i t l v i s t i c r e p l y t o Schmid. They m a i n t a i n t h a t t h e a n a l y s t position is put in t h e i r into a valu e- loaded p o s i t i o n when he a t t e m p t s t o o b t a i n a s e p a r a t e measure f o r t h e r e d i s t r i b u t i o n component. Thus, th e y c o nc lu de : . . . the a b i l i t y t o u n t a n g l e p r o d u c t i v i t y changes from pure t r a n s f e r s depends on v a l u e judgments t h a t w i l l not be a c c e p t a b l e to a l l p o r t i o n s o f th e c l i e n t e l e f o r such e v a l u ­ ations. T h is reduces th e v a l u e o f t h e i n f o r m a t i o n d e r i v e d f o r d e c i s i o n making and j e o p a r d i z e s th e a n a l y s i s o f p r o j e c t s v i a component o b j e c t i v e s o r a s o c i a l w e l f a r e f u n c t i o n . ^ The exchange o f comments between Schmid and Stevens and K a l t e r would have been c l a r i f i e d if t h e y had d i s t i n g u i s h e d between c o n d i ­ t i o n a l l y n o rm a t iv e p o s i t i o n s and o u t r i g h t n o r m a t iv e p o s i t i o n s . and Stevens a t t a c k Schmid's comment as if K alter he were e x p r e s s in g an o u t r i g h t n o rm a t iv e p o s i t i o n . T h is comment and from th e o r i g i n a l e x p r e s s io n o f h i s fo r m u la f o r d i s t i n ­ gu is h in g between a change impression p o s s i b l e from Schmid's in d i s t r i b u t i o n due t o pure p r o d u c t i v i t y changes and a r e d i s t r i b u t i o n due t o pure t r a n s f e r s . o rig in al form ulation s ta te s : unless Congress e x p l i c i t l y "It is A n o te to the im po ss ib le to d e f i n e r e d i s t r i b u t i o n s ta te s a ru le fo r a llo c a t i n g j o i n t costs. E x p l i c i t d e p a r t u r e s from th e norm can then a i d s e l e c t e d groups ' k a l t e r and S te v e n s , "Changed D i s t r i b u t i o n o f t r i b u t i o n , " p. 138. in a Income Vs. Redis 76 system atic m an n er."' reference The f i r s t sentence o f t h i s n o t e c l e a r l y t o norms which would p l a c e t h e a n a l y s t norm ative s ta n c e . as an e s p o u s a l p o sitio n . Im p l i e s in a c o n d i t i o n a l l y The second s e n t e n c e , however, c o u l d be i n t e r p r e t e d o f eith e r th e c o n d i t i o n a l l y o r th e o u t r i g h t n o r m a t i v e The m a t t e r hinges upon who makes t h e " e x p l i c i t d e p a r t u r e s from t h e n o r m . " I f t h e a n a l y s t h i m s e l f does ( i n such as C o n g r e s s ) , 1 ieu o f some body then th e p o s i t i o n would be o u t r i g h t n o r m a t i v e . Cone I us ion The e m p i r i c a l d is trib u tio n a l th is As w i t h o t h e r s t u d i e s about d i s t r i b u t i o n a l s t u d y could no t p r o v i d e various elem ents o f studies. by which in form atio n about a l l impacts, of the id ea l and thoroughgoing d i s t r i b u t i o n a l - impact The e l e m e n t s t h i s it s t u d y p e r t a i n s to the impacts o f s e l e c t e d p o l i c i e s and programs t o c o n t r o l water p o l l u t i o n . however, work done as p a r t o f t h i s study d i d t a k e I n t o a c c o u n t and th e means d e a l t w i t h d a t a and v a l u e problems a r e e x p l a i n e d in rema in­ ing c h a p t e r s . D a n i e l Bro ml e y, A. A l l a n Schmid, and W i l l i a m L o rd , P u b l i c Water Resource P r o j e c t P la n n i n g and E v a l u a t i o n : I m p a c ts , I n c i d e n c e , and I n s t I t u t i o n s , Work ing Paper No. t , U n i v e r s i t y o f W i s c o n s i n , C e n t e r f o r Resource P o l i c y S t u d i e s and Programs, Madison, 1 9 7 1 , p- A - 1 2 . CHAPTER VI REVIEW OF RESEARCH DESIGN AND METHODS USED TO STUDY BENEFICIAL AND ADVERSE EFFECTS IntroductIon A f t e r a t t e n d i n g t o some p r e l i m i n a r i e s re s e a r c h design and methods used t o a t t a i n t iv e s given in th e P r e f a c e . as t h i s and th e f o l l o w i n g t h i s c h a p t e r r e v i e w s th e the F i r s t These o b j e c t i v e s t h r e e st ud y o b j e c ­ should be ke pt t h r e e c h a p t e r s pr oceed. B e f o r e t u r n i n g to t h e r e v i e w o f methods, a b r i e f is p ro v id ed o f s t u d i e d p o l i c i e s and programs. grams have been in tr o du c e d by un pu bl ish ed m a n u s c r i p t s lim inary topics in mind in Ch a pt e r liste d II restatement These p o l i c i e s and p r o ­ and a r e p r e s e n t e d in Appendix A. include a p re s en tatio n o f regional in d e t a i l In a d d i t i o n , impact subgroups. L i k e most s t u d i e s about some a s p e c t o f d i s t r i b u t i o n a l t h i s one has no t been a b l e t o c o n s i d e r a l l i n f o r m a t i o n r e q u i r e d by the impact s t u d i e s d e s c r i b e d b rie f impa ct s, t h e v a r i o u s k in d s o f i d e a l model o f thoro ug hg oing d i s t r i b u t i o n a l - in C h a p t e r V. T h is c h a p t e r thus ends w i t h a summary o f the n a t u r e and scope o f st udy methods as seen I i g h t of the pre­ in t h e id e a l m o d e l. * The methods employed assumptions and l i m i t a t i o n s . in t h i s study a r e s u b j e c t This c h a p te r, to several however, does not d is c u s s ^ D e t a i l e d a s p e c t s o f r e s e a r c h de s ig n and methods, i n c l u d i n g c i t a t i o n s o f sources o f i n f o r m a t i o n , a r e g i v e n in Appendix E. T h is c h a p t e r is a r e v i e w o f t h a t a p p e n d ix . 77 78 these assumptions and l i m i t a t i o n s in d e t a i l . saved f o r t h e n e x t t h r e e c h a p t e r s and t h e i r Rather, is r e l a t e d a p p e n d ic e s . Assumptions and l i m i t a t i o n s a r e then e x p l a i n e d ments about th e f i n d i n g s o f e m p i r i c a l such d e t a i l in c o n j u n c t i o n w i t h com** research. S t u d ie d P o l i c i e s and Programs A f t e r e x p l o r a t o r y r e s e a r c h ended w i t h t h e f o r m u l a t i o n o f s p ecific ob jectives, which coul d a t t a i n atten tio n turned those o b j e c t i v e s . to t h e r e f i n e m e n t o f methods U n d e r s ta n d in g o f th e s e methods r e q u i r e s a c l e a r c o n c e p t io n o f s t u d i e d r e g u l a t o r y p o l i c i e s and a s s i s t ­ ance programs. The Group o f P o l i c i e s R e p r e s e n t in g t h e D i r e c t C o n t r o l o f the Commission Over M a n u f a c t u r i n g Dis c ha rg es C o n t r o l s o f th e M ich ig an Water Resources Commission which a p p l y t o m a n u f a c t u r in g d i s c h a r g e s e m i t t e d d i r e c t l y herein after tr o ls of referred to by phrases such as " t h e d i r e c t th e com m iss io n. "* s t a nd in g p o l i c i e s s t a t e and r e g u l a t o r y c on­ These d i r e c t c o n t r o l s c o n s i s t o f long­ and pr oce dur es e x e r c i s e d by t h e commission as w e l l as those o f more r e c e n t o r i g i n . economic into p u b lic waters are From t h e s t a n d p o i n t o f p o t e n t i a l impa ct s, for e mo s t among t h e s e c o n t r o l measures a r e t h e i n t r a s t a t e water q u a l i t y 1967 through 19&9- s t a n d a r d s which were adopted Ot h er p o l i c i e s w i t h th e p o t e n t i a l for in te r­ from re la tiv e ly *The d i s t i n c t i o n between th e d i r e c t and i n d i r e c t r e g u l a t o r y c o n t r o l s o f th e commission o v e r m a n u f a c t u r i n g d i s c h a r g e s is im p o rt a n t f o r purposes o f t h i s s t u d y . D i r e c t c o n t r o l s a p p l y t o d i s c h a r g e s sent d i r e c t l y i n t o p u b l i c w a t e r s ; I n d i r e c t c o n t r o l s t o d i s c h a r g e s se nt v i a p u b l i c u t i l i t y sewers t o p u b l i c t r e a t m e n t f a c i l i t i e s . This d i s t i n c t i o n is e x p l a i n e d in th e s u b j s e c t i o n o f C ha pt e r I I I e n t i t l e d F o r m u l a t i o n o f a Useful Research Framework. 79 g r e a t economic impact i n c l u d e s e v e r a l which have been p r e s c r i b e d in recommendations and c o n c l u s i o n s o f f e d e r a l - s t a t e e n f o r c e m e n t c o n f e r e n c e s concerned w i t h p o l l u t i o n o f t h e G r e a t L a k e s . * dictates Stream s ta n d a r d s and from e nfo rc em ent c o n f e r e n c es have a l t e r e d and s t r e n g t h e n e d , r a t h e r than r e p l a c e d , commission. previously e x is tin g r e g u l a t o r y p ro c e du re s o f t h e Some o f t h e s e procedures d a t e back t o t h e y e a r 1929. 2 Study methods were not a b l e to s e p a r a t e l y e v a l u a t e e f f e c t s caused by each o f t h e a f o r e m e n t i o n e d types o f Y e t , t h e y were a b l e t o c o n s i d e r t h e regulatory p o lic ie s . impacts o f th e s e p o l i c i e s by con­ s i d e r i n g them as a s i n g l e group o f c l o s e l y related as i n d i c a t e d by t h e heading o f t h i s s u b s e c t i o n , i d e n t i f y and d e s c r i b e th e set o f d i r e c t which th e Therefore, research attempted to incidence o f c e r t a i n e f f e c t s regulatory controls d u ri n g th e l a t e pot i c i e s . from th e e n t i r e commission exercised 1960s o v e r m a n u f a c t u r i n g d i s c h a r g e s . The Group o f Programs P r o v i d i n g S u b s i d i e s to M u n i c i p a l i t i e s At th e o u t s e t o f 1965, o n l y two f e d e r a l subsidies f o r the c o n s tr u c tio n o f programs p r o v id e d local water p o llu t i o n control ^Probably o f most importance to t h i s s t u d y , because o f t h e p o t e n t i a l e x t e n t o f t h e i r economic im pa c ts , a r e th e ph osp horus-remova1 st an da rd s e s t a b l i s h e d by thes e c o n f e r e n c e s . These e f f l u e n t s ta n d a r d s r e q u i r e a p r e s c r i b e d p e r c e n t a g e removal o f phosphorous compounds from a l l d i s c h a r g e s i n t o most o f th e s t a t e ' s p u b l i c w a t e r s , 2 The s t a t e l e g i s l a t u r e en ac ted t h e e n a b l i n g a c t o f t h e Water Resources Commission's p r e d e c e s s o r , t h e Stream C o n tr o l Commission, in 1929. 3 The p o l i c i e s and programs now bein g reviewed were In e x i s t e n c e d u r i n g t h e l a t e 1960s. Ch apt er X I I updates s t u d i e d p o l i c i e s and p r o ­ grams p r i o r t o making recommendations about t h e a d m i n i s t r a t i o n and c o o r d i n a t i o n o f p o l i c i e s and programs. 80 fa c ilitie s .' One o f th e s e programs— which has s i n c e ma jor f e d e r a l program in t h i s a r e a — was c a r r i e d o u t 1956 been the in accord anc e w i t h th e Federal Water P o l l u t i o n C on tr ol Act Amendments o f c a lle d P.L. 8*1-660. 1956, commonly The second gave supp leme nta ry g r a n t s t o P . L . 8*4-660 g r a n t s and was a u t h o r i z e d by t h e P u b l i c Works A c c e l e r a t i o n Act approved by Congress in 1962. By th e end o f 1966, Congress had a u t h o r i z e d f i v e new f e d e r a l programs which gave g r a n t s o r both g r a n t s and loans to h e l p l o c a l i t i e s pay the c a p i t a l costs o f water p o l l u t i o n c o n tro l works . These new programs were place d under th e a d m i n i s t r a t i v e c o n t r o l o f th e Appa­ la c h i a n Regional Commission, t h e Economic Development A d m i n i s t r a t i o n , the Housing and Home Fin a nc e Agency, t h e Model C i t i e s the Farmers' Home A d m i n i s t r a t i o n . In itia l a p p r o p r i a t i o n s f o r the se new.programs and , o f more im p o rt a n c e , s u b s t a n t i a l l y a p p ro p riatio n s f o r the P.L. amounts o f f e d e r a l Program, and in cr e a s ed annual 8 4 - 6 6 0 g r a n t program caused much g r e a t e r funds t o become a v a i l a b l e to h e lp communities pay f o r w a te r p o l l u t i o n c o n t r o l works. Th is study d i d not c o n s i d e r t h e d i s t r i b u t i o n a l impacts o f g r a n t s m a d e u n d e r th e program r u n by the A p p a la c h ia n Regional s io n . Nor d i d Obviously, t h i s i t consider the Commis­ program does no t a p p l y to M ich ig an m u n i c i p a l i t i e s . impacts o f f i n a n c i a l a s s i s t a n c e o f f e r e d by t h e ' s i n c e th e m i d - 1950s , l o c a l u n i t s o f government have been a b l e to o b t a i n p u b l i c f a c i l i t y loans under p r o v i s i o n s o f the Housing Amend­ ments o f 1955C a p i t a l e x p e n d i t u r e s on w a t e r p o l l u t i o n c o n t r o l f a c i l i t i e s q u a l i f y f o r these l o a n s . T h is program, however, was not c o n s id e re d in t h i s s tu dy . Only those programs which p r o v i d e g r a n t s o r both g r a n t s and loans were i n c l u d e d . At any r a t e , from what the a u t h o r has been a b l e t o d e t e r m i n e , a p p a r e n t l y few p u b l i c f a c i l i t y loans have been g iv e n t o M ich ig an communities f o r th e c o s t s o f w a t e r p o l l u ­ t i o n c o n t r o l works. 81 Model C i t i e s Program. r e c e i v e d funds Model C i t i e s in support o f w a t e r p o l l u t i o n c o n t r o l works from t h e Program. s id e r e d by t h i s 1. As o f m i d - 1 9 6 9 , no M ic h i g a n com munities had F i v e r e m a in in g f e d e r a l study. th e P . L . These programs programs wer e con­ include: 8*1-660 program, which has s in c e 1956 g i v e n g r a n t s f o r the c o n s t r u c t i o n o f w a s t e w a t e r t r e a t m e n t works and s ew ers , in terceptor 1 2. the now nonfunded A c c e l e r a t e d P u b l i c Works Program, which from 1963 through about 1966 supplemented P . L . 8 4-660 g ra n ts received by l o c a l i t i e s w i t h i n Redevelopment A r e a s , 3. th e program c a r r i e d ou t by the Economic Development Admin­ i s t r a t i o n o f th e Department o f Commerce, which a s s i s t s communities lo ca te d in Redevelopment Areas and Economic Development D i s t r i c t s providing ( a ) g r a n t s which supplement P . L . g r a n t s and loans which h e lp l o c a l i t i e s and w a s te w a te r t r e a t m e n t wo rks , 4. 84-660 grants, b u ild a l l by and (b) d i r e c t typ es o f sewer systems 2 the program a d m i n i s t e r e d by th e Housing and Home Finance Agency o f t h e Department o f Housing and Urban Development, which p r o ­ v id e s g r a n t s t o l o c a l governments f o r t h e c o n s t r u c t i o n o f any ty p e o f sewage c o l l e c t i o n system t h a t does not q u a l i f y P . L . 8 4 - 6 6 0 g r a n t program, f o r supp ort under t h e and Whe P . L . 8 4 - 6 6 0 program has been a d m i n i s t e r e d by s e v e r a l f e r e n t a ge n c ie s s in c e i t s i n c e p t i o n . 2 Communities a s s i s t e d by t h i s d if­ program have not exceeded 5 0 , 0 0 0 persons. Grants g i v e n under t h i s program a r e not l e g a l l y r e s t r i c t e d t o communities o f s p e c i f i c s i z e s , but In c a r r y i n g o u t th e p r o v i s i o n s o f t h e a c t th e a d m i n i s t r a t o r s o f t h e program have r e f e r r e d to th e Farmers' 82 5. the program o f the F a r m er s ' Home A d m i n i s t r a t i o n o f th e Department o f A g r i c u l t u r e , which g i v e s g r a n t s and loans to r u r a l m u n i ti e s o f less than 5 *5 0 0 persons f o r o f w a te r p o l l u t i o n c o n t r o l Wh il e f e d e r a l the c o n stru ctio n o f a l l g r a n t s and lo an s in s u p p o r t o f l o c a l w a te r in th e years a f t e r many s t a t e s a l s o expanded e x i s t i n g a s s i s t a n c e programs s t a r t e d up new p ro g ra m s . s t a t e g r a n t programs came from t h e f e d e r a l o f 1966. types fa c ilitie s . p o l l u t i o n c o n t r o l works were being augmented o r , more f r e q u e n t l y , com­ This a c t promised a d d i t i o n a l 1965* in t h i s area I n c e n t i v e s f o r these C le a n Water R e s t o r a t i o n Act federal c o s t shares from the P.L. 8 4 - 66 0 g r a n t program t o t r e a t m e n t works located t h a t could pay a minimum p r e s c r i b e d t h e c o n s t r u c t i o n costs share o f in those s t a t e s o f these works. Michigan in the l a t e is one o f the s t a t e s w h ic h 1960s. M i c h i g a n ' s program began a f t e r a $335 m i l l i o n bond program was approved by re ferendum v o t e o f 1968. in t h e November e l e c t i o n s The sum o f $285 m i l l i o n was ea rm a rk e d f o r payment o f s t a t e ' s share o f t r e a tm e n t p r o j e c t s program. i n i t i a t e d a g r a n t program the s u p p o r t e d by th e P . L , 8 4 - 6 6 0 The remaining $50 m i l l i o n was d e s i g n a t e d to h e lp b u i l d c o l ­ l e c t i o n sewers in small towns in which t h e c o s t s o f sewer p r o j e c t s exceed ten percent o f the s t a t e e q u a l i z e d v a l u a t i o n o f a l l taxable property. Home A d m i n i s t r a t i o n any a p p l i c a t i o n s from c om m un iti es o f less than 5*500 persons. T h is p r a c t i c e is r e p o r t e d in U . S . Code Congressional and A d m i n i s t r a t i v e News, 9 1 st C on g. , 2d s e s s . , No. 11, O c t . 2 0 , 1970, p. 4228. . 83 M i c h i g a n ' s Program P r o v i d i n g Tax Exemptions to P r i v a t e E n t i t i e s T h i s study ta kes program which a l l o w s I n t o account some e f f e c t s o f th e Michigan i n d u s t r i e s and o t h e r p r i v a t e d i s c h a r g e r s o f w a t e r b o r n e wastes t o a p p l y f o r t a x exemptions f o r th e c o s t s o f b u i l d i n g t h e i r own t r e a t m e n t works. in J u l y o f 1965. State le g is la t io n authorized Under th e program's p r o v i s i o n s , exemptions can be o b t a i n e d from personal property, s a l e s , and use t a x es l e v i e d upon th e f i x e d p o r t i o n s o f p r i v a t e l y owned t r e a t m e n t works. t o t h e c o s t s o f t r e a t m e n t works whose f i n a l p r i o r t o emis sion Exemptions a p p l y e f f l u e n t s are sent d i r e c t l y i n t o p u b l i c w a t e r s and t o th e c o s t s o f f a c i l i t i e s e fflu en ts t h i s program into pu blic u t i l i t y which p r e t r e a t sewers. Reasons f o r the S e l e c t i o n o f St udied P o l i c i e s and Programs The f o r e g o i n g p o l I c i e s and programs were not m e re ly s e l e c t e d a t random from th e e n t i r e range o f r e g u l a t o r y and a s s i s t a n c e measures a d m i n i s t e r e d or c o o r d i n a t e d by the Michigan Water Resources Commission d u r i n g th e l a t e l$60s. Rather, t h e i r s e l e c t i o n was made a f t e r e x p l o r a ­ t o r y r e s e a r c h led t o th e c o n c lu s io n t h a t c e r t a i n c l a s s i f i c a t i o n s , sizes, and l o c a t i o n s o f m a n u f a c t u r in g p l a n t s would e x p e r i e n c e an i n o r d i n a t e p r o p o r t i o n o f adv e rs e e f f e c t s caused by any s t r i c t e n f o r c e ­ ment o f the commission's d i r e c t regulatory c o n tro ls . And, s i m i l a r y e t o p p o s i t e v e i n , e x p l o r a t o r y re s e a r c h r e s u l t s In a Indicated that s u b s i d i e s and t a x exemptions were p r o v i d i n g r e l a t i v e l y g r e a t amounts of fin an cial assistan ce to c e r ta in c l a s s i f i c a t i o n s , t i o n s o f m a n u f a c t u r in g p l a n t s . s i z e s , and lo c a ­ 84 Regional From t h e o u t s e t o f t h i s c a te d a lo n g c o u n t y l i n e s , subgroups.^ Impact Subgroups study, seven wa te rs h ed r e g i o n s , demar­ served as one s e t o f regional impact M e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s have comprised t h e second s e t o f the s e two s e t s o f r e g i o n a l regional subgroups. 2 Figure I depicts impact subgroups. Watershed r e g i o n s were based upon d r a i n a g e p a t t e r n s I n t o th e Great Lakes and upon t h e sharp d i f f e r e n c e o f p o p u l a t i o n d e n s i t i e s between t h e s o u t h e r n and n o r t h e r n h a lv e s o f M i c h i g a n ' s Lower P e n i n s u l a . F i g u r e 2 shows t h e l o c a t i o n o f w at er sh eds w i t h r e s p e c t regions, to s p e c if ic and F i g u r e 3 p o r t r a y s p o p u l a t i o n d e n s i t i e s f o r t h e y e a r i 960 . M a jo r Li n e s o f Research Several d i f f e r e n t , to a t t a i n th e f i r s t yet in terre la ted , three research o b j e c t i v e s . and a n a ly z e d d a t a which cou ld r e v e a l cial effects l i n e s o f r e s e a r c h sought resu lting the These l i n e s o r g a n i z e d incidence o f adverse o r b e n e f i ­ from t h e above types o f p o l i c i e s and programs. The r e s e a r c h c o n t r a c t d e s i g n a t e d o n l y f i v e r e g i o n s . P r io r to w r i t i n g t h e s ix - m o n t h r e p o r t r e f e r r e d t o in th e P r e f a c e , however, two o f th e f i v e r e g i o n s were s u b d i v i d e d . O r i g i n a l l y a s s ig n e d Regions I I and I I I were broken down i n t o Regions I I A , I IB , I I I A , and I I I B to r e f l e c t d i f f e r e n c e s in p o p u l a t i o n d e n s i t i e s i d e n t i f i e d by F i g u r e 3* County l i n e s were used to d e l i m i t r e g i o n s to a l l o w f o r th e use o f secondary i n f o r m a t i o n t h a t is r e a d i l y a v a i l a b l e a t th e coun ty le v e l. Each c oun ty w i t h water sh eds t h a t f l o w i n t o two o r more b a s ic d r a i n a g e a r e a s was a s si gn e d to t h a t w at er sh ed r e g i o n whose d r a i n a g e a r e a w i t h i n th e county c o n t a i n e d the l a r g e s t p o r t i o n o f t h e c o u n t y ' s po p u la t ion. 2 Co u n t i e s c o n s id e r e d as m e t r o p o l i t a n were those i n c l u d e d w i t h i n a Standard M e t r o p o l i t a n S t a t i s t i c a l Area ( S . M . S . A . ) in I 9 6 0 . Refer to U . S . , Department o f Commerce, Bureau o f th e Census, Census o f Po p ul a ­ t i o n , I 9 6 0 , Vol . 1 , C h a r a c t e r i s t i c s o f t h e P o p u l a t i o n , P t . 2 4 , iMichTgan ( W a s h in g t o n , D . C . : Government P r i n t i n g O f f i c e , 1963 ) , p. 2 4 - 3 . ; i ’u u u a L 'J ^ iiiiiT i* | t u t m* Milt I ■ * m m l l t . _ ■ F . , . * . t in e o I I I 1.0t r»7«tr< tl AM — I--- y«UT<0 'uicoir. KUMi1 * {Me t r o p o l i tan count ies a r e i n d i c a t e d by d o t t e d p a tte rn .) ■ t> re « L i .................... I CL*I* Jj:* AlLfVMI TLA) h. ■innal e»*t Zi Figure _ !/ .ar j f l O M u i k i t a . -i- l* 'N lL t tt llfL v m s f t .(II I . — Watershed r e g i o n s and m e t r o p o l i t a n c o u n t i e s . 86 * 2 5 F i g u r e 2 . - - W a t e r s h e d s and water she d r e g i o n s . PERSONS PER SQUARE MILE {I960) AIL UNSHADED AREA*- 24 OR LESS. NORTHERN TWO-THIRDS OF STATE* — 250 AND OVER “ 25 TO 249 SOUTHERN ONE-THIRD OF STATE5 — 500 AND OVER 4 — 250 TO 4 99 — 50 TO 249 | | — 25 TO 49 F i g u r e 3 . — Persons per square m i l e , M i c h i g a n , I960. ♦ 88 Research on Adverse E f f e c t s o f Regulatory P o l ic i e s Guided by O b j e c t i v e of direct I, r e s e a r c h on t h e m a g ni tu de and I n c i d e n c e r e g u l a t o r y c o n t r o l s was des ign ed t o p r o v i d e an e s t i m a t i o n o f the w o r s t - p o s s i b l e loss in employment in d i f f e r e n t impact subgroups if r e g u l a t o r y c o n t r o l s on m a n u f a c t u r i n g d i s c h a r g e s had been s t r i c t l y enforc ed d u r i n g t h e late 1960s. Research p r o c e d u r e s which approached t h i s t a s k a r e summarized below. C o l l e c t i o n o f I n f o r m a t i o n on P l a n t s With D i r e c t l y - C o n t r o l l e d D is c h a rg e s The names and l o c a t i o n s o f a l l m anufacturing p la n ts w ith d i s ­ charges d i r e c t l y c o n t r o l l e d by th e M ic h i g a n Water Resources Commission in 1968 were o b t a i n e d from an annual c onsulting several fied into a tw o -, tion (S IC ). commission r e p o r t . trade p u b lic a tio n s , t h r e e - , o r foui—d i g i t each o f P r i m a r i l y by t h e s e p l a n t s was c l a s s i ­ St and ar d In d u strial C la s sific a ­ The a p p r o x i m a t e number o f employees w o rk in g f o r each p l a n t was a l s o o b t a i n e d p rim a rily from t h e same t r a d e p u b l i c a t i o n s . Each p l a n t was l o c a t e d a c c o r d i n g t o wa te rs h ed r e g io n s and m e t r o p o l i t a n or n o n m e t r o p o l i t a n groups o f c o u n t i e s . treatment given The adequacy o f w a s t e w a t e r in 1968 t o t h e d i s c h a r g e o r d i s c h a r g e s o f each p l a n t was o b t a i n e d from a commission r e p o r t . Regional e n g i n e e r s who work on t h e s t a f f o f th e commission a s s i g n th e s e r a t i n g s each y e a r . ratings i n d i c a t e one o f t h e f o l l o w i n g a l p h a b e t i c a l a r e a s sig ned t o each in dustrial discharge These d e s i g n a t i o n s , and into pu blic w aters. d e s i g n a t ions a r e : . A --C o n tro l adequate, B - - C o n t r o l p r o v i d e d ; adequacy no t f u l l y d e t e r m i n e d , C— No c o n t r o l ; need n o t e s t a b l i s h e d , These 89 D— C on tr ol E— C o n t r o l p r o v i d e d ; p r o t e c t i o n u n r e l i a b l e , and In a d e q u a t e . Summation o f I n f o r m a t i o n on P l a n t s W ith D i r e c t l y - C o n t r o l l e d D is c h a rg e d The i n f o r m a t i o n d e s c r i b e d above was c o l l e c t e d on each o f t h e ^38 m a n u f a c t u r in g p l a n t s in to p u b l i c w a t e r s in Michigan which e m i t t e d d i s c h a r g e s d i r e c t l y in 1968. to a framework which include d s i z e subgroups. 21 t w o - d i g i t i n f o r m a t i o n was summed up a c c o rd in g in d u s tria l, r e g i o n a l , and employment- Summation was f i r s t done a t th e s t a t e in dustries, industry l i s t e d T h is 5 th re e -d ig it in T a b l e 2. in dustries, Each o f thes e In t o t o t a l s (1) f o r each o f the se fo r th re e general f o r the and one f o u r - d i g i t i n d u s t r i e s had a t one p l a n t which e m i t t e d d i r e c t l y - c o n t r o l l e d d i s c h a r g e s S t a t e w id e t o t a l s level least in 1968. i n d u s t r i e s were then subd ivide d categories o f the W a t e r- U s in g Nondurables c a t e g o r y , in dustries. (2) These i n c l u d e the W a t e r - U s in g Dur able s c a t e g o r y , and (3) t h e Minor Water Users c a t e g o r y . ' f o r each s e p a r a t e i n d u s t r y and f o r the t h r e e broad c a t e g o r i e s were then a r r i v e d a t f o r each o f th e seven watershed Statewide t o t a l s region s and f o r t h e m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s d e p i c t e d by F igu re 1. C o l l e c t i o n o f Data About A l l Manu­ f a c t u r i n g P l a n t s in Michigan The next s t e p in vo lv e d th e r e c o r d i n g o f employment for a ll m a n u f a c t u r in g p l a n t s in Michi gan f o r the year 1968. inform ation Th is d a t a ' R e f e r t o Appendix F f o r an e x p l a n a t i o n o f th e c h o i c e o f s p e c i f i c i n d u s t r i a l c a t e g o r i e s and f o r a d e s c r i p t i o n o f procedures used to c l a s s i f y s p e c i f i c i n d u s t r i e s i n t o t h r e e broad c a t e g o r i e s . 90 TABLE 2 . — L i s t o f s p e c i f i c m a n u f a c t u r in g i n d u s t r i e s in cl ud e d w i t h i n r e s e a r c h fr am e w o rk , by t h r e e broad c a t e g o r i e s . SIC Code Number3 O fficial Abbreviated T i t l e c T i t l e 15 W a t e r - U s i n g Nondurabfes 201 Meat pr o d u c t s 202 D a i r y prod uct s Canned and f r o z e n foods 203 Beet sugar 2063 2 0 k , 2 0 8 , G r a in m i l l p r o d u c t s , b e v e ra ge s , and 209 f a t s and o i l s 20 Food and k in d r e d prod uct s 26 28 Meat ( p r o c e s s i n g ) Da i ry Cann i ng Beet sugar ( r e f i n i n g ) M i s c e l l a n e o u s food Food Paper and a l l i e d products Chemical and a l l i e d prod ucts Pet role um and coa l pro d uc ts Rubber and p l a s t t c s p r o d u c t s , nec* L e a t h e r and l e a t h e r products S to n e, c l a y , and g l a s s pr oducts 29 30 31 32 Paper Chem ica 1 P e tr ol e um ( r e f i n i n g ) Rubber and p l a s t i c s Le a t h e r St on e, c l a y , and g l a s s W a t e r - U s i n g Dur able s 33 P r im a r y m e t a l s i n d u s t r i e s 3*» F a b r i c a t e d metal products 35 M a c h i n e r y , e x ce pt e l e c t r i c a l 36 E l e c t r i c a l m achinery 37 T r a n s p o r t a t i o n equipment 38 In s t r u m e n t s and r e l a t e d products 39 M i s c e l l a n e o u s m a n u fa c t u r e r s Pr im a ry m e ta l s Fabricated metals N o n - e l e c t r i c a l machinery E l e c t r i c a l machinery T r a n s p o r t a t i o n equipment P r e c i s i o n equipment M i s c e l l a n e o u s m a n u f a c tu r e r s M i n o r Water U ser se 19 Ordinance and a c c e s s o r i e s 22 T e x t i l e m i l l products 25 F u r n i t u r e and f i x t u r e s 27 P r i n t i n g and p u b l i s h i n g Ord inance Te x t i I e s Furn i t u r e P r i n t i n g and p u b l i s h i n g 0 These SIC code numbers a r e g i v e n by U . S . , E x e c u t i v e O f f i c e o f t h e P r e s i d e n t , Bureau o f th e Budget, Standard I n d u s t r i a l C l a s s i f i c a t i o n Manual , 1967 (Washington, D . C . : Government P r i n t i n g O f f i c e , 1967X^These a r e o f f i c i a l title s c These a r e t i t l e s r e f e r r e d p a r e n t h e s e s a r e sometimes u s e d .) ^Nec is s h o r t f o r n . e . c . given to in I b i d . in t h i s d i s s e r t a t i o n . (Words in and means not e l s e w h e r e c l a s s i ­ fie d . eThe t i t l e Minor Water Users does not n e c e s s a r i l y mean t h a t i n d i v i d u a l p l a n t s w i t h i n the se i n d u s t r i e s u s e , on t h e a v e r a g e , any le s s w a t e r per g i v e n time p e r i o d than i n d u s t r i e s w i t h i n the o t h e r two c a t e ­ g o ries. R ef e r t o Appendix F f o r f u r t h e r comments about no me ncl at ure and c l a s s i f i c a t i o n . 91 on employment was t o t a l e d and s u b t o t a l e d a c c o r d i n g t o t h e same framework of Impact groups and subgroups d e s c r i b e d above . Employment S e c u r i t y Commission p r o v i d e d this F i l e s o f t h e M ic h ig a n i n f o r m a t i o n on employment. C a l c u la t io n o f Percentage Figures to Show E x t e n t o f Commission's D ir e c t Control The e x t e n t o f t h e d i r e c t ov e r employment water she d re g u la to ry control in d i f f e r e n t m a n u f a c t u r i n g r e g i o n s , and in d u stries, in s e p a r a t e in m e t r o p o l i t a n and n o n m e t r o p o l i t a n c o u n t i e s was e s t i m a t e d by t h e f o l l o w i n g the p e r c e n t a g e o f t o t a l o f t h e commission percentages. employees in a l l C a l c u l a t i o n s were made o f manufacturing p la n ts w ith in r e s p e c t i v e groups and subgroups t h a t worked in 1968 f o r p l a n t s which e m i t t e d d i r e c t l y - c o n t r o l l e d d i s c h a r g e s a s sig ned t o each o f adequacy-of-waste-treatm ent f o r each o f t h e at r a t ings . i n d u s t r i e s and the s t a t e w i d e , th e v a r i o u s These p e r c e n t a g e s were o b ta i n e d in d u strial categories listed in T a b l e 2 r e g i o n a l , m e t r o p o l i t a n , and n o n m e t r o p o l i t a n levels o f aggregation. A n a l y s i s o f P e r ce nt a ge s A nalysis of th e s e p e r c e n t a g e s p ro v id ed e s t i m a t e s o f p o s s i b l e d i r e c t employment losse s t h a t c o u ld have r e s u l t e d th e w o r s t in 1968 from t h e e nf or c e m e nt o f d i r e c t c o n t r o l s o v e r m a n u f a c t u r i n g d i s c h a r g e s . T h is was done by r e f e r r i n g t o t h e p e r c e n t a g e f i g u r e s when a r r i v i n g a t e s t i m a t e d answers t o two h y p o t h e t i c a l assume t h e e x i s t e n c e o f a s i t u a t i o n questions. In 1968 Both o f these questions in which t h e d i r e c t regula­ t o r y c o n t r o l s o f t h e commission o v e r m a n u f a c t u r i n g d i s c h a r g e s were s tric tly and i m m e d ia t e ly e n f o r c e d . These i n t e r r e l a t e d questions are: 92 1. What would have been th e maximum p o t e n t i a l ment w i t h i n s p ecific I n d u s t r i e s and c a t e g o r i e s o f manufacturing p la n ts w i t h ratings^ lo ss in employ­ In d u stries if 1e s s - t h a n - a d e q u a t e w a s t e w a t e r - t r e a t m e n t had been fo r c e d c o m p l e t e l y out o f business by c o s t s r e q u i r e d to a t t a i n ade qua te t r e a t m e n t ? 2. What would have been th e maximum p o t e n t i a l ment w i t h i n th e e n t i r e state, loss in employ­ s p e c i f i c water she d r e g i o n s , and m e t r o p o l i t a n and n o n m e t r o p o i i t a n groups o f c o u n t i e s i f manufacturing plants w ith ratings l e s s - t h a n - a d e q u a t e wastewatei— t r e a t m e n t f o r c e d c o m p l e t e l y ou t o f bu sin es s by c o s t s r e q u i r e d had been to a t t a i n ade quate treatment? Research on B e n e f i c i a l E f f e c t s o f Subsidy Programs The second o b j e c t i v e o f t h i s o f those c l a s s i f i c a t i o n s , study c a l l s f o r an i d e n t i f i c a t i o n s i z e s , and l o c a t i o n s o f m a n u f a c t u r in g p l a n t s t h a t had been most a b l e to o b t a i n a s s i s t a n c e from s t u d i e d programs. subsidy P r e v i o u s c h a p t e r s e x p l a i n how m a n u f a c t u r i n g p l a n t s which used p u b l i c c o l l e c t i o n and t r e a t m e n t works up t o the e a r l y o b t a i n a s s i s t a n c e from thes e s u b s i d i e s . because sewer s e r v i c e charges 1970s could Such a s s i s t a n c e was a v a i l a b l e l e v i e d upon m a n u f a c t u r in g and o t h e r customers d i d not n o r m a l l y r e c o v e r any p a r t o f c o n s t r u c t i o n co s ts beyond t h e l o c a l l y borne s h a r e . L e s s - t h a n - a d e q u a t e r a t i n g s a r e r a t i n g s B thr ough E which have been e x p l a i n e d ab ove. As mentioned in Chapter V I I , e s t i m a t e s were a l s o made o f t h e maximum p o t e n t i a l loss in employment which would have d i r e c t l y r e s u l t e d from s t r i c t enf orcement i f o n l y those p l a n t s w i t h E, o r c o m p l e t e l y in a d e q u a t e , d i s c h a r g e r a t i n g s had been f o r c e d o u t o f bus i n e s s . 93 E s t i m a t e s o f t h e E x t e n t t o Which rtanufa c tu rin g Plants W ith in D i f f e r e n t Subgroups Used M u n i c i p a l F a c i l i t i e s As e x p l a i n e d a bo v e , employees t h a t worked in 1968 f o r each m a n u f a c t u r i n g p l a n t e m ittin g discharges d i r e c t l y this into p u blic w aters. in M i c h i g a n With re fe re n c e to in fo rm a tio n , m anufacturing p la n ts w i t h d i r e c t l y - c o n t r o l l e d c ha rg es c o u l d be grouped Thus, i n f o r m a t i o n was o b t a i n e d on t h e number o f the t o t a l i n t o one o f f o u r e m p l o y m e n t - s i z e c a t e g o r i e s . ^ number o f p l a n t s w i t h d i r e c t l y - c o n t r o l l e d in each emp1o y m e n t - s i z e c a t e g o r y was o b t a i n e d f o r of statew ide, in d u s tria l, d e s c r i b e d a bo v e . to o b t a i n included w i t h i n and r e g i o n a l number o f a l l discharges t h e same framework impact groups and subgroups Data was then rec o rd ed the t o t a l d is­ from a f e d e r a l m anufacturing p la n ts survey in o r d e r t h a t were each e m p l o y m e n t - s i z e c a t e g o r y o f each impact group and subgroup. The e x t e n t o f the d i r e c t c o n tro l discharges o f m anufacturing p la n ts o f t h e commission o v e r t h e in d i f f e r e n t employment-size c a t e - gores c o u l d be e s t i m a t e d from t h e f o l l o w i n g s e t o f p e r c e n t a g e f i g u r e s . C a l c u l a t i o n s were made o f t h e p e r c e n t a g e o f a l l 2 m anufacturing p la n ts E m p lo y m e n t - s iz e c a t e g o r i e s i n c l u d e 1 t o 19, 20 t o 9 9 , 100 to 2 ^ 9 , and 250 o r more em plo y e e s . I n f o r m a t i o n c o u l d not be o b t a i n e d a bo u t employment in a r e l a t i v e l y small number o f p l a n t s w i t h d i r e c t l y c o n tro lle d discharges. Th us , t h e employment o f some p l a n t s c o u l d no t be added i n t o employment t o t a l s , and some p l a n t s c o u l d not be p l a c e d i n t o one o f t h e f o u r e m p l o y m e n t - s i z e c a t e g o r i e s . R efer to Chapter V I I and Appendix E f o r means o f c o p i n g w i t h t h i s problem and f o r an e s t i ­ mate o f I t s i n f l u e n c e upon f i n d i n g s . 2 These p e r c e n t a g e f i g u r e s a r e r e p o r t e d in C h a p t e r V I I and t h e i r complements r e f e r r e d t o in C h a p t e r V I I I . The p e r c e n t a g e s p r o p e r a r e g i v e n in C h a p t e r V I I when e v a l u a t i n g t h e i n c i d e n c e o f a d v e r s e e f f e c t s o f enforced r e g u la to r y c o n t r o ls . Although they g iv e a general in d ic a ­ t i o n o f t h e e x t e n t o f t h e c o m m is s i o n 's c o n t r o l o v e r d i s c h a r g e s from 9* w i t h i n each component o f t h e r e s e a r c h framework t h a t was comprised by ju st those p l a n t s which e m i t t e d any d i r e c t i y - c o n t r o l 1ed d i s c h a r g e s . These p e r c en ta g es were o b t a i n e d by d i v i d i n g w i t h i n each component o f discharges w i t h in Such p e r c en ta g es were o b t a i n e d c a t e g o r y o f each i n d u s t r i a l each water she d number o f p l a n t s t h e framework i n t o th e number o f p l a n t s which emitted d i r e c t l y - c o n t r o l l e d component. the t o t a l subgroup w i t h i n r e g i o n , and w i t h i n th e same r e s p e c t i v e f o r each e m p lo y m e n t - s iz e th e e n t i r e s t a t e , w i t h i n th e m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s . Complements o f p e r c e n t a g e f i g u r e s j u s t d e s c r i b e d wer e used to e s t i m a t e th e p r o p o r t i o n o f m a n u f a c t u r in g p l a n t s o f d i f f e r e n t c l a s s i f i ­ cations, sizes, u t i l i t y s e w e rs . and l o c a t i o n s which sen t t h e i r d i s c h a r g e s Most m a n u f a c t u r i n g p l a n t s w i t h i n assumed t o send t h e i r d i s c h a r g e s e i t h e r d i r e c t l y d ire c tly fore, to p u b lic u t i l i t y sewersJ the s t a t e could be i n t o p u b l i c w a te r s or These complements c o u l d , there­ be used t o e s t i m a t e th e p r o p o r t i o n o f p l a n t s w i t h i n each component o f t h e framework which u t i l i z e d tie s . into public Thus, complements co ul d pu b lic water p o llu tio n control indicate fa c ili­ the p r o p o r t i o n o f p l a n t s p l a n t s w i t h i n v a r i o u s groups and subgroups, t h e s e p e r c e n t a g e s o n l y serv e t o i n t r o d u c e th e b a s i c means o f e s t i m a t i n g t h e in c i d e n c e o f adv ers e e f f e c t s from r e g u l a t o r y p o l i c i e s . These b a s i c means a r e the w o r s t - p o s s i b l e employment e f f e c t s summarized above. ' A n a l y s i s o f the s e complements r e l i e s upon a b a s i c u n d e r l y i n g assumption about a l l m a n u f a c t u r i n g p l a n t s in M ich ig an which were in cl ud e d w i t h i n the i n d u s t r i e s l i s t e d in T a b l e 2 . T h is assumption holds t h a t t h e e n t i r e volume o f e f f l u e n t s from each s e p a r a t e p l a n t was e i t h e r d is c h a r g e d I n t o p u b l i c w a t e r s o r i n t o p u b l i c u t i l i t y sewers. The upshot o f t h i s assumption i s , t h e n , t h a t each p l a n t e i t h e r e m i t t e d d i s c h a r g e s s u b j e c t t o t h e d i r e c t c o n t r o l s o f th e commission o r u t i l i z e d p u b l i c f a c i l i t i e s and t h e r e b y b e n e f i t e d from s t u d i e d subsid y programs. The r a m i f i c a t i o n s o f t h i s assumption a r e di sc uss ed in Appendix G. 95 w i t h i n each component o f t h e framework which had b e n e f i t e d ance p r o v i d e d in d ire c tly from a s s i s t ­ from s t u d i e d sub s id y pr og ram s.* Research on B e n e f i c i a l E f f e c t s o f Tax Exemptions O b j e c t i v e 3 r e q u i r e d an a n a l y s i s o f d a t a about a p p l i c a t i o n s f o r and r e c e i p t s o f t a x exemptions from M i c h i g a n ' s program. This a n a ly s is was s t r u c t u r e d around t h e same r e s e a r c h framework used t o e v a l u a t e t h e incidence o f b e n e f i c i a l effects from s u b s i d i e s . C o l l e c t i o n o f I n f o r m a t i o n on Tax Exemptions The names o f a l l t a x exemption p r i o r m a n u f a c t u r i n g p l a n t s which had a p p l i e d t o September, 1969, were recorded from f i l e s and reco rds kep t by per son ne l w o rk in g f o r and the S t a t e Tax Commission. sewers. f o r and r e c e i v e d by p l a n t s which i n t o p u b l i c w a t e r s as w e l l R e l a t i v e l y few p l a n t s w i t h (discharges th e Water Resources Commission Ex a m in a tio n o f th e s e names r e v e a l e d t h a t t a x exemptions had been a p p l i e d em itted discharges into p u b lic u t i l i t y a t t e n t i o n was d i r e c t e d c la s s ific a tio n s, as in to p u b lic u t i l i t y in d ir e c t l y - c o n t r o ll e d discharges sewers), or been a u t h o r i z e d a t a x exemption p r i o r fore, for a p rim a rily however, had e i t h e r t o September, 1969- re qu es ted There­ to an e v a l u a t i o n o f those s i z e s , and l o c a t i o n s o f p l a n t s which had a p p l i e d for and had r e c e i v e d exemptions f o r works which t r e a t e d w a s t e w a t e r s p r i o r to e m iss io n d i r e c t l y into p u b lic w aters. ^Chapter V I M and Appendices £ and H d e s c r i b e o t h e r pr oc ed ur es which a p p l y to O b j e c t i v e 2 . These procedures a r e s up pl em en tar y to t h e ones j u s t summarized. In g e n e r a l , t h e y p r o v i d e a b a s i s f o r e s t i m a t i n g the magnitude and d i r e c t i o n o f e r r o r s In a n a l y s i s caused by t h e assump­ t i o n mentioned in t h e p r e v i o u s f o o t n o t e . 96 At th e t i m e when i n f o r m a t i o n was c o l l e c t e d about t a x e x e m pt io ns , em plo y m e nt -s ize c a t e g o r i e s f o r m a n u f a c t u r in g p l a n t s w i t h d i r e c t l y c o n t r o l l e d d i s c h a r g e s had a l r e a d y been d e t e r m i n e d . Thus, th e em pl oy m en t- siz e c a t e g o r y o f p l a n t s which had a p p l i e d f o r and r e c e iv e d an exemption was a l r e a d y a v a i l a b l e . a v a i l a b l e on th e in dustrial In a d d i t i o n , i n f o r m a t i o n was c l a s s i f i c a t i o n s and l o c a t i o n s o f thes e pi a n t s . Summation o f I n f o r m a t i o n t o A r r i v e a t Observed F re qu e nc ie s and P o p u l a t i o n s f o r C h i- S q u a r e An aly ses The number o f p l a n t s w i t h d i r e c t l y - c o n t r o l l e d d is c h a r g e s which had r e c e i v e d an exemption was t o t a l e d f o r each e m p lo y m e nt -s iz e c a t e g o r y w i t h i n each component o f th e r e se a r ch framework. Totals fo r c e r t a i n e m p lo y m e n t - s iz e c a t e g o r i e s and o t h e r components were then added t o g e t h e r in o r d e r t o a r r i v e a t observed f r e q u e n c i e s f o r f o u r t w o -b y -t w o c o n t i n g e n c y t a b l e s f o r c h i - s q u a r e a n a l y s e s . table in clu ded t h e f o l l o w i n g r e s p e c t i v e columns: than 250 and 250 or more employees, (2) (I) Each r e s p e c t i v e p l a n t s w i t h le ss p l a n t s w i t h i n W a te r- U s in g Nondurables and W a t e r - U s in g Du ra b le s c a t e g o r i e s , {3) p l a n t s w i t h i n th e n o r t h e r n m o s t - f o u r and t h e s o u t h e r n m o s t - t h r e e watershed r e g i o n s , and {*0 p l a n t s w i t h i n m e t r o p o l i t a n and n o n m e t r o p o l i ta n groups o f c o u n t i e s . The t o t a l population referred t o by each o f the f o u r t a b l e s c o n s is t e d o f th e A38 m a n u f a c t u r i n g p l a n t s which e m i t t e d d i r e c t l y - c o n t r o l l e d discharges In 1968. The p o p u l a t i o n w i t h i n each o f t h e I n d i c a t e d by the a f o r e m e n t i o n e d columns c o n s i s t e d o f a l l plants w ith in discharges the r e s p e c t i v e in 1968. impact subgroups m a n u f a c t u r in g subgroups which e m i t t e d d i r e c t l y - c o n t r o l l e d 97 C a l c u l a t i o n o f Expected Frequencies Expected f req uen cie s f o r the two columns w i t h i n each o f t h e four contingency t a b l e s Indic at ed the number o f m a n u f a c t u r i n g p l a n t s w i t h d i r e c t l y - c o n t r o l l e d discharges which would exemption i f the t o t a l have number o f p l a n t s which a c t u a l l y exemption had been p r o p o r t i o n a l l y d i v i d e d between r e f e r r e d to by each t a b l e . the t e s t i n g o f four n u l l These n u ll the hypotheses about the r e c e i v e d an impact s u b g ro u p s These expected f r e q u e n c i e s received p r i o r to September, gram. received a tax thus allo wed in c id e n c e o f benefits 1969, from M i c h i g a n ' s t a x exemption p r o ­ hypotheses held t h a t t h e r e had be en no s t a t i s t i c a l l y s i g n i f i c a n t d i f f e r e n c e between each p a i r o f impa ct subgroups r e f e r r e d to above in the prop or tio ns o f p l a n t s which had r e c e i v e d an e x e m p t i o n . Construction of these hypotheses was based upon t h e tu r e and in te rv ie ws r e f e r r e d to in Chapter re view of lite ra ­ IN . Conduct of Chi-Square Analyses Conduct o f c hi - s q u a r e analyses p r o v id e d hypotheses about the d i s t r i b u t i o n o f b e n e f i t s exemption program between va rio us te s ts f o r n u ll from M ic h ig a n 's impact s u b g r o u p s . tax The r e s u l t s o f these t e s t s a re given in Chapter IX. Summary: Methods in P e r s p e c t i v e Chapter V has reviewed some b a s i c e l e m e n t s o f d i s t r i b u t i o n a l impacts about which e mpir ica l data must be c o l l e c t e d a thoroughgoing study o f those impacts. made i t c l e a r t h a t few, about a l l T h is p r i o r and analyzed by c h a p t e r has a l s o i f any, s tu di es have been a b l e those elements. to obtain d a t a The for e go in g r e v i e w o f me thods c l e a r l y 98 in dicates data that l i k e o t h e r s t u d i e s t h i s p r e s e n t one cou ld not a c q u i r e s u ffic ie n t to e s t i m a t e a l l the v a rio u s r a m i f i c a t i o n s o f a c o m pl e te e v a l u a t i o n o f d i s t r i b u t i o n a l impa cts . Y et, a n a ly z e d d a t a about c e r t a i n o f t h e s e r a m i f i c a t i o n s . summary h i g h l i g h t s considered. impact s t u d i e s The f o l l o w i n g t h e k in d o f r a m i f i c a t i o n s wh ich s tu d y methods have Perspective t h e s e methods t h i s st ud y has is ga in e d by p l a c i n g t h e n a t u r e and scope o f into the broader co n te x t o f in tr o d u c e d t hor ou ghg oin g d i s t r i b u t i o n a l - in t h e p r e v i o u s c h a p t e r . Methods o f t h i s st ud y o r i g i n a t e d and e v o lv e d d u r i n g an in terd isc ip lin a ry after this process o f e x p l o r a t o r y r e s e a r c h . They wer e r e f i n e d process had ended w i t h t h e f o r m u l a t i o n o f st ud y o b j e c t i v e s . These o b j e c t i v e s c a l l e d for, and st ud y methods p r o v i d e d , an e v a l u a t i o n of: 1. th e magnitude and in c i d e n c e o f a d v e r s e employment e f f e c t s which would have r e s u l t e d i f s t u d i e d r e g u l a t o r y p o l i c i e s had been s t r i c t l y and im m e d ia t e ly e n f o r c e d in 1968, and 2. t h e i n c i d e n c e o f b e n e f i c i a l e f f e c t s which wer e a c t u a l l y o c c u r r i n g as a r e s u l t o f those s u b s i d i e s and t a x exemp­ t i o n s which had been issued p r i o r to September, 1969- E f f e c t s c o n s i d e r e d by s t u d y methods a r e a d v e rs e o r b e n e f i c i a l from t h e s t a n d p o i n t o f th e v a r i o u s w ithin t h e r e s e a r c h frame wo rk. impact groups and subgroups Only t h e d i r e c t in clu ded i n c i d e n c e o f ad v e rs e employment e f f e c t s from e n f o r c e d r e g u l a t o r y p o l i c i e s and o n l y the direct in c i d e n c e o f b e n e f i c i a l have been e v a l u a t e d . effects from s u b s i d i e s and exemptions A lt h o u g h t h e nonmonetary i n d i c a t o r o f employment is a measure o f t h e mag nitu de o f s t u d i e d a d v e r s e e f f e c t s , no monetary o r nonmonetary measure has been a s s i g n e d t o t h e magnitude o f s t u d i e d b e n eficial effects. Consequently, o n ly the e f f e c t s has been e s t i m a t e d . incidence o f b e n e f ic i a l 99 With fic ia l respect to studied effects plants w ith in s u b s id y pr og ram s, v a r i o u s components o f t a x e x em pt io n p ro g ra m , has been e v a l u a t e d by s t a t i s t i c a l In sum, methods o f this t i o n abo ut what C h a p t e r V r e f e r s of re gulatory p o lic ie s p o llu tio n ever, control. the a u d i t Rather, the fac i l i t i e s . the W ith regard incidence o f b e n e f ic i a l effects study provided p o s i t i v i s t i c informa­ t o as " e x post a u d i t s " o f the e f f e c t s to stu d ied in t h e f i e l d o f water regulatory p o lic ie s , how­ has not been o f e f f e c t s w h ic h have a c t u a l l y o c c u r r e d . th is audit has been o f a d v e r s e employment e f f e c t s w h ic h m ig h t enforcement c o n d it io n s . in d ir e c t e f f e c t s o f studied s tu d y methods d i d no t c o n s i d e r p o l i c i e s and prog rams. the " w ith -a n d -w ith o u t" p r i n c i p l e or take norm ative in t h e c ase o f a n a ly s is . T h i s c h a p t e r has shown t h a t u tiliz e r e s e a r c h frame wo rk which u t i - and a s s i s t a n c e programs have t a k e n p l a c e und er s t r i c t any i n c i d e n c e o f bene has been e s t i m a t e d by t h e p e r c e n t a g e o f m a n u f a c t u r i n g 1 i zed p u b l i c w a t e r p o l 1u t ion c o n t r o l M ichigan's the issues a b o u t what th e c o s t s o r g a in e d Nor d i d i n t o a c c o u n t the impact subgroups should have e i t h e r the b e n e fits o f they studied measures.* Th us , paid this In C h a p t e r X I I t h e a u t h o r t a k e s an o u t r i g h t n o r m a t i v e p o s i ­ t i o n in o r d e r t o e x p l a i n h i s v a l u e c o n c e p t s a b o u t t h e e q u i t a b l e a d m i n i s t r a t i o n and c o o r d i n a t i o n o f p e r t i n e n t p u b l i c p o l i c i e s and programs. T h i s p o s i t i o n is r e q u i r e d b e f o r e a p p r o a c h i n g O b j e c t i v e *1, which c a l l s f o r recommendations abo ut t h e f u t u r e conduct o f p o l i c i e s and prog rams. T h i s o u t r i g h t n o r m a t i v e s t a t e m e n t , however, does not p e r t a i n t o which o f t h e s t u d i e d impact subgroups should have s u f f e r e d g r e a t e r o r l e s s e r a d v e r s e employment e f f e c t s o r g a in e d g r e a t e r o r l e s s e r amounts o f b e n e f i c i a l e f f e c t s from a s s i s t a n c e pr ograms. Rather, t h i s s t a t e m e n t r e l a t e s t o t h e means by which p o l i c i e s and programs should tn t h e a u t h o r ' s e s t i m a t i o n , be e v a l u a t e d , c o n d u c t e d , and coordinated. 100 study has not p r o v i d e d i n f o r m a t i o n about e i t h e r t h e magnitude o r i n c i d e n c e o f any n e t b e n e f i c i a l o r a d v e rs e e f f e c t s upon d i f f e r e n t impact subgroups w i t h i n t h e r e s e a r c h frame wo rk. As a r e s u l t , th e issues s ur r o u n d in g t h e e s t i m a t i o n o f a change in d i s t r i b u t i o n and a r e d i s t r i b u t i o n were no t c o n f r o n t e d . PART IV RESULTS OF RESEARCH DESIGNED TC ATTAIN OBJECTIVES 101 CHAPTER VI I THE POTENTIAL INCIDENCE OF ADVERSE EFFECTS FROM DIRECT REGULATORY CONTROLS P r e v i e w o f Th re e C ha pt e rs T h i s and the n e x t two c h a p t e r s p r e s e n t designed t o a t t a i n the f i r s t t h r e e study o b j e c t i v e s . chapter deals w ith O b je c tiv e tia l direct f i n d i n g s o f methods 1 by r e p o r t i n g f i n d i n g s abo ut t h e p o t e n ­ i n c i d e n c e o f a d v e r s e e f f e c t s which s t r i c t r e g u l a t o r y p o l i c i e s mig ht have caused IX r e s p e c t i v e l y a t t e n d This present In 1968. to O b j e c t i v e s 2 and 3- enforcement o f Then C h a p t e rs V I I I Th us, th e s e l a t t e r c h a p t e r s d e s c r i b e f i n d i n g s o f methods which have r e v e a l e d of b en eficial the and two incidence e f f e c t s from s t u d i e d su bs id y and t a x ex emption programs. The s p e c i f i c o b j e c t i v e a t t e n d e d t o by each o f t h e s e t h r e e chapters is r e s t a t e d near t h e c h a p t e r ' s o u t s e t . A b rie f b a s ic methods and d a t a sources then leads d i r e c t l y review o f i n t o th e p r e s e n t a ­ tio n o f research r e s u l t s . Restatement o f O b j e c t i v e Objective 1 of this I s tu d y i s : To a p p r o x im a te th e p o t e n t i a l impact on t h e employment s t r u c ­ t u r e s o f ( 1 ) m a n u f a c t u r i n g I n d u s t r i e s , ( 2 ) wa te rs h ed r e g i o n s , (3) m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s , and ( k ) the e n t i r e s t a t e t h a t might have o c c u r r e d in the l a t e 19&0s i f th e d i r e c t r e g u l a t o r y c o n t r o l s o f th e M ic h i g a n Wa ter Resources Commission had been s t r i c t l y and im m e d ia t e ly e n f o r c e d . ^From t h e P r e f a c e . 102 103 B r i e f Review o f Methods and Sources Chapter VI r e v i e w s and Appendix E e x p l a i n s d i s t i n c t s e t s o f d a t a were c o l l e c t e d o b jective. in d e t a i l in o r d e r t o a t t a i n t h a t two th e f i r s t One s e t a p p l i e d o n l y t o those 438 m a n u f a c t u r i n g e s t a b l i s h - * ments which e m i t t e d d i r e c t l y - c o n t r o l l e d d i s c h a r g e s in 1968. second a p p l i e d ’ t o a l l in M i c h i g a n . manufacturing estab lishm ents sets o f da ta c o n s i s t e d o f th e same k in d s o f necessity, t h e sources o f t h e da ta inform ation. The Both Y e t , ou t o f in cl ud e d w i t h i n each set had to be e n t i r e l y d i f f e r e n t . The t o t a l number o f employees t h a t worked in about t h r e e - f o u r t h s o f the 438 p l a n t s co ul d be o b t a i n e d from c u r r e n t t r a d e p u b l i c a t i o n s o r from th e f i l e s o f th e commission. t o th e r e m a in in g e s t a b l i s h m e n t s . A p o st c a r d q u e s t i o n n a i r e was sent From th e s e combined s o u r c e s , employ­ ment f i g u r e s were o b t a i n e d from a l l but 29 e s t a b l i s h m e n t s . 2 9 , about 23 were known to be e i t h e r small p l a n t s o r small metal and seasonal Of these food pr oc es sin g p l a t i n g works. P l a n t - b y - p l a n t d a t a on employment were added t o g e t h e r to y i e l d total employment f i g u r e s for ju s t c o n t r o lle d discharges w i t h i n those p l a n t s which e m i t t e d d i r e c t l y - each o f t h e in cl ud e d w i t h i n t h e r e s e a r c h framework. referred t o when p l a c i n g a l l d irectly-co n tro lled impact groups and subgroups In a d d i t i o n , the se d a t a were bu t 29 o f th e 438 e s t a b l i s h m e n t s w i t h discharges i n t o one o f f o u r e m p lo y m e nt -s Iz e categori e s . The t o t a l subgroups w i t h i n number o f employees t h a t worked th e e n t i r e s t a t e and w i t h i n in v a r i o u s regional in dustrial subgroups was recorded from In -h ou se re co rd s o f th e M ich ig an Employment S e c u r i t y )0k Commission. The t o t a l These reco rds gave employment f i g u r e s f o r March, 1968. number o f p l a n t s w i t h i n each em ptoyment-size c a t e g o r y o f v a r i o u s groups and subgroups was then o b t a i n e d from t h e 1967 County Business P a t t e r n s f o r M i c h i g a n . * By r e f e r r i n g t o the two s e ts o f d a t a , l a t e t a b u l a r m a t e r i a l s p r e s en t ed I t was p o s s i b l e to c a l c u ­ in t h i s c h a p t e r . T a bl es 3 through 5 d i s p l a y pe r c e n t a g e f i g u r e s which r e p r e s e n t a p pr ox im a te p r o p o r t i o n s o f the t o t a l number o f e s t a b l i s h m e n t s w i t h i n subgroups t h a t e m i t t e d d i r e c t l y - c o n t r o l l e d through 15 p r e s e n t employment f i g u r e s i n d i v i d u a l impact groups and discharges Ta bles 6 in a manner which shows the ap pr ox im a te p r o p o r t i o n s o f workers w i t h i n d i f f e r e n t regional in 1968. in d u s tria l and subgroups and t h e e n t i r e s t a t e t h a t were employed by e s t a b ­ l is h m e n ts w i t h d i r e c t l y - c o n t r o l l e d d i s c h a r g e s assig ned v a r i o u s ratings in I 9 6 0 . Objective preting tables. 1 is approached information reported As these in th e ne x t two s e c t i o n s by i n t e r ­ in t h e two a fo re m e nt io ne d s e r i e s o f i n t e r p r e t a t i v e comments proce ed, d e t a i l s o f methods a r e r e v i e w e d . a r e p a r t o f these d e t a i l s , some impo rta nt Assumptions and l i m i t a t i o n s o f methods but a r e discussed in Appendix G. Appendix E c i t e s th e f u l l r e f e r e n c e to t h i s so ur c e . At the time s p e c i f i c methods were being r e f i n e d , the Census o f M a n u f a c t u r e rs f o r 1968 was not y e t p u b l i s h e d . The a u t h o r judged t h a t t h e b e n e f i t s from sub s e qu e n tly u p d a t in g d a t a on s i z e s o f e s t a b l i s h m e n t s by using 1968 f i g u r e s would no t be w o rt h th e time and com put at io nal e f f o r t requ i r e d . 1 105 The P o t e n t i a l I n c i d e n c e o f Adverse E f f e c t s Upon D i f f e r e n t Sizes o f Establishments The Ta b l e s As s t a t e d above , T a b l e s 3 t hro ug h 5 p r o v i d e f o r an a n a l y s i s o f the p o t e n t i a l i n c i d e n c e o f a d v e r s e e f f e c t s o f s t r i c t l y and enforced d i r e c t regulatory co n tro ls. are percentages. These p e r c e n t a g e s tions^ o f th e t o t a l various fig u res i n d i c a t e the a p p r o x i m a t e propoi— Impact groups and subgroups t h a t were included on t h i s lis t for 1968. in clu de d on t h e Water A ll establishm ents l i s t d i s c h a r g e d w a s t e w a t e r s which were d i r e c t l y con­ by th e commission in 1968. T a b l e 3 is a summary t a b l e . p e rc en ta g es f o r t h e t h r e e s tudy and f o r shown by th e s e t a b l e s number o f m a n u f a c t u r i n g e s t a b l i s h m e n t s w i t h i n Resources Commission s t a t u s tro lled A ll im m e d ia t e ly th e t o t a l broad f o u r columns r e p o r t groups o f i n d u s t r i e s used m anufacturing s e c to r . in dustry-by-industry d e t a i l . each o f th e s e p a r a t e Its Tables subject In t h i s and 5 p r o v i d e They r e p o r t s u b j e c t p e r c e n t a g e s f o r industries w ith in th e t h r e e broad groups o f in dustries. How P e r ce nt a ge s Are The p e r c e n t a g e f i g u r e s an a n a l y s i s o f t h e p o t e n t i a l p r e t e d as f o l l o w s . Interpreted shown by T a b l e s 3 through 5 a l l o w f o r in c i d e n c e o f a d v e r s e e f f e c t s when i n t e r ­ The l a r g e r (sm aller) percentages in d ic a te that ^These p e r c e n t a g e s r e p r e s e n t o n l y a p p r o x i m a t e p r o p o r t i o n s because o f c e r t a i n l i m i t a t i o n s t o d a t a . These l i m i t a t i o n s a r e discu ss ed below and in Appendix G. 2 The s t a t u s l i s t hereby r e f e r r e d to is S t a t e o f M i c h i g a n , Water Resources Commission, "Waste Water C o n t r o l S t a t u s ( I n d u s t r i a l and Com­ m e r c i a l ) as o f A p r i l 1, 1 9 6 8 . " (Mimeographed.) 106 TABLE 3 • - - A p p r o x i m a t e p e r c e n t o f t o t a l m a n u f a c t u r i n g e s t a b l i s h m e n t s in min o r w a t e r - u s i n g i n d u s t r i e s , w a t e r - u s i n g no n d u r a b le and w a t e r usin g d u r a b l e i n d u s t r i e s t h a t were l i s t e d on t h e Water Resources Commission s t a t u s l i s t f o r 1968, by e m p lo y m e n t - s iz e c a t e g o r i e s , wa te rsh ed r e g i o n s , and m e t r o p o l i t a n and nonmetro­ po litan co u n tie s.3 i -M c 4) £ >> O •— CL e LU c o '— CD L. ro z i 3 : Q O ) 4J c c •— aj i~ E 3 -C -m in u — ro — — M------ O id a 4-1 C 4-1 O id in i— x : l u ro 1 -1 9 20-99 1 0 0- 2 4 9 250+ To t. Est. 0*0% 0.4 0.0 5 .0 0.2% 0.3% 1 .6 1 1 .5 29.3 3.2% 0.2% 0.9 3-7 1 9 .7 1 .4% 0.2% 0.9 4.9 1 6 .8 1 .5% 1-1 9 20-99 100- 24 9 0.0% 0.0 2.2 0.4% 3-8 9.0 32.5 5.3% 1.0% 5.5 12.5 33.9 5.7% Tot. 250+ 6.1 Est. 0.6% 4.7% 16.1 28.4 52.9 14.7% Region MB 1-1 9 20-99 100-249 250+ To t. Est. 0.0% 0.0 0.0 0.0 0.0% 11 .4% db 71 -4 100.0 63-4% 8.6% 8.3 26.7 14.3 12.0% 2.3% 21 .4 40.0 33.3 12.0% Region I IIA 1-1 9 20-99 100 -2 4 9 250 + Tot. Est. 0.0% 0.0 0 .0 0.0 0.0% 0.8% 14.1 6.7 87.5 9-9% 0.0% 0 .0 2.9 37.5 3.4% 0.2% 3.8 9.1 43.2 3.5% Region I I IB 1-19 20-99 100-2 49 250 + Tot. Est. 0.0% 0.0 0.0 0.0 0.0% 0.0% 40.0 25.0 0.0% 0.0 10,0 66.7 25.0 33.3% 5-4% 0.0% 4.1 11 . 8 3 3 .3 2.4% 1-19 20-99 100-2 49 0.0% 0,0 0.0 57-1% 40,0 66.7 d 76.5% 0.0% 66.7 0.0 0,0 1 1.1% 1 .8% 1 0 .0 1 6 .7 50.0 5.3% Region IV Tot. 250+ 0, 0 Est, 0,0% 107 TABLE 3 * — Continu ed. IS) 1 cn C CO L. O L. O C 4J ro 2: 3 cn m a 0 «— ■.— <0 1 tL- 3 at -a 4J c cn O 3 z cn 4-j c c — at t- E 3 -C ■m in O — nj — — U- -Q IT) 3 CO ■W C -M 01 c __ tn 3 in 1 —a) L- .O at co 4-1 1_ CO 3 a 0 O h I co tn iu Region V 1-19 20-99 100-2^9 250+ T o t. Est. 0.0% 0,0 0.0 0.0 0.0% 11.1% 37.5 100.0 100.0 36.7% 0.0% 0.0 0 .0 nc 0.0% 0.8% 5.9 28.6 50.0 3.**% M e tr o . Count Ies 1-1 9 20-99 100-2*19 250+ T o t. Est. 0.0% 0.*l 0.0 3.** 0.2% 0.6% 3.1 11 .*1 3**.6 3.9% 0.1% 0.9 *1.1 20.5 1.7* 0,2% 1 .2 5-3 21 .7 1 .8% Nonmetro. Count ies 1-19 20-99 1 00-2**9 250+ To t. Est. 0.0% 0 .0 *1.0 20.0 0.6% 3-8% 25.3 **9.3 63.8 17.2% 0.3% **.6 9.8 39.3 5 .3 S 1 .2% 9.3 19.8 **5.0 6.7% To ta l Michiga n 1-19 20-99 100-2*i9 250+ To t. Est. 0.0% 0.3 1.3 8.1 0.3% 1 .9 2 10.1 2*i. 1 **8.1 8.8% 0.3% 0.5% 1.7 6.0 25.2 2.5% 3.2 9.5 25.6 ‘ 3.2% a R e f e r to Ch apter VI and Appendix E f o r t h e sources and methods used when p r e p a r i n g t h i s t a b l e and th e f o l l o w i n g two t a b l e s . Employ­ ment d a t a could not be o b t a i n e d f o r 29 p l a n t s l i s t e d on t h e s t a t u s l i s t f o r 1968. These p l a n t s w i t h unknown employment cou ld o n l y be taken I n t o account when c a l c u l a t i n g the p e r c e n t a g e f i g u r e s g i v e n in the rows e n t i t l e d T o t. Est. T h is a b b r e v i a t i o n stands f o r T o t a l E s t a b l i s h m e n t s . ^The l e t t e r d i n d i c a t e s t h a t a p e r c e n t a g e f i g u r e coul d not be c a l c u l a t e d because t h e County Business P a t t e r n s f o r 1967 w i t h h e l d the number o f p l a n t s w i t h i n c e r t a i n i n d u s t r i e s o f a few c o u n t i e s . cThe l e t t e r n i n d i c a t e s t h a t a p e r c e n t a g e f i g u r e is no t r e l e v a n t because i n f o r m a t i o n o b t a i n e d from the County Business P a t t e r n s f o r 1967 r e v e a l e d t h a t t h e r e were no p l a n t s w i t h i n c e r t a i n i n d u s t r i e s o f e n t i r e watershed r e g i o n s . TABLE 4 , — Approximate percent o f t o t a l manufacturing establishments in minor water-using in du s tr ie s and water-using nondurable in d us tr ie s t h a t were l i s t e d on the Water Resources Commission status l i s t f o r 1968, by employment-size c a t e g o r i e s , watershed regions, and me tro p ol it an and non­ metropolitan c o u n t i e s . 3 Reg ion EmploymentSlze Class Minor Water Users Region i Reg i on Region Region Region 1-19 20-99 100-2l»9 250+ T o t. Est. IIA 1-19 20-99 100-249 250+ T o t. Est. 1 IB 1-19 20-99 100-2A9 250+ Tot. Est. IIIA 1-19 20-99 100-21(9 250+ To t. Est. 111B 1-19 20-99 100-249 250+ To t. Est. a) tn CM <0 IA 3 CM ■*-> CM U -M U C — 1_ — X tn 3 cn a) Lu h0 .02 0,02 0.0 0 .0 n 0.0 0 .0 0.0 0 .02 0.02 1.2% n 0.02 0.02 0 .0 n 0.0 n 25 .0 0 .0 n 0 .0 16.7 n 1.52 1 .1 % n n n n n 0.0 n n 0.0 n n n n n 0.02 n n 0.02 n n 0.0 n 0.0 0.0 n 0.0 0.0 0.0 2 n 0.02 n n n n n n n n n n n n n n n <0 CTl c — 73 CO L. O 0 .02 0 .0 0.0 2 5 .0 i_ cn JQ O *3 C flJ in a. o X. 3 CM ■w —■ I— CD O (j 73 o c U< U1 — O cn itn o O CD Lu a. 1- 3 0.02 0.02 0.02 0.8 0.4 1.6 0.0 0.0 6.7 0 .0 5.0 5.0 0.02 0.22 1.92 8 .2 2 0.02 0.02 0.0 0.0 2 5.5 2 .2 0.0 33.3 0.0 6.1 37-5 0.32 0.62 18.22 0 .02 0.02 10.52 0.0 0.0 d 0.0 0.0 d n 0 . 0 100.0 0.02 0.02 37 .92 0.02 0.02 1.62 0.0 0.0 18.0 0.0 0.0 7-3 0.0 0 .0 100.0 0.02 0.02 13.32 n 0.02 0.02 0.0 0.0 n 0.0 0.0 n n 0 .0 n 0.02 0.0 2 n Water-Using Nondurables * Ifl \0 CM l_ O 0 — Cl tn CD 0_ 0 .02 2 .9 12.5 100.0 9 .42 0.02 0 .0 23.8 70.0 22,92 n n n 100.0 100.02 n 0.0 0.0 n 0.0 2 n d 100.0 d d CD E 3 cn u> — CD tn a) -i 0 .02 0.0 0.0 0.0 0.02 0.02 0.0 2 5 .0 50.0 16.72 0.02 0.0 2 5.0 0 .0 9.12 0 .02 n 0.0 0.0 0.02 n n n n n >ID t_j tn cm « cn * cd o— U CO — o tn ut ta tn iL tn 0) U u» — CD Ul-Q 2 C CO — tn 3 CO=> T3 u> c ,0 0 z 0 .62 0.0 9.1 11.1 1.02 0.02 0.0 0.0 0.32 1.6 11.5 29.3 3.22 4 .7 2 16.1 28.4 52.9 14.72 11.42 d 71.4 100.0 63.42 0.82 14.1 6.7 87 .5 9 .9 2 0 .02 40 .0 2 5.0 66.7 33.32 60.0 24.42 l4.32 d 3 3 .0 d 40.02 0 .0 2 0.0 0.0 n 0 .0 2 0 .0 2 0.0 0.0 n 12.52 z 0 3 3 (D rr “1 O (It * tn H O 3: rr 0) o rr The in 01 3 footnotes —t o rr * o o 1 m ro ro t/> vn x rr o vo . + ■H O ro rr © —■. • i VD aw m ro VO VO l/l vn rr o + • H « O rr © ro • © © 1 1 1 ro vo —< m IO x - vn VO in vn rr 0 vn * + to Table o * o O o . * o o dp o . 3 © dp 3 0 * 0 O 0 • • 3 O 0 dP O 0 * ♦ 3 O 0 dp fo — • vn o . • * oo o o dp o o O o © * * * O U1 o o o dP dp to * o o OO *— m a • * oo V I O U) dP o this table. f ho oo N> vn o • ■ a V> ©VO o . o 0 « 0 (he O O 0 0 O # . a a • O O © O © (TP dp 0 . 0 O © © © © O # 3 • . a * * O ro O O © O dP (TP dp ro © o x- © O • « # « • Cl o © 0 O dP dP _ ro CO V C l • * » N> OO x dp dP __. oo ro 00 V I d - t - o * . * » * vo -o '•J N> o dp VO ro « 1X1 e-p d W VO V I © vo — . a . • * o o O — dP to O # vn dP © i vn C l X» • --O X - O vo © # a a ro x - 0 dP .— ao ho vn ro o o X" vn . » • * 3 a. oo o o x- o © e* dP dP N> ro o * * ro o 3 3 3 3 3 3 3 3 3 3 3 3 3 vn C l 00 ■ . V I 00 the to VI ro vn 0 V I » * . . to 03 vn vo dp dP ro vo 0 O VO V I a a. * 0 O 4r- V I -t l/l CD •-J ro • 3 SIC 20 o — Food dP dP O O • O dP O • 3 O dP 3 ro vn vn -- j 3 * 3 cr\ o CT- O Q. * * * -J O 3 SIC 26 Paper dP 3 3 3 3 SIC 28 Chemicals 3 3 3 3 SIC 29 P et rol eu m £ ri­ te ”1 I <3 01 3 to 0 3 D- vn © © O • * . 3 0 O O dP aw cn © © a • • --J O © c i x - ro vo oo vo vn v*> V) x a « • • » « • to oo VO VO 00 VD C i *P dP dp t I/i U l f - l D I D rt O U ) • + O • 3 O dP 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 3 o o o o 3 3 3 • • 3 3 3 dP dP __ x - ro OO Oo X" O * • • * * in oo , dP i n O O O O O T o t a l Minor » * » • o o o o o Water Users dP dp VO XO to *-J vo 00 00 vo • a * . • » * . 3 <71 x - O 'O O XT' —■ Xdp dP ■J-P dp to 00 — * • ONVO dP 3 O © O O O O O O w * 4 * • « * • X* 0 O © O O O dP _ _ VaI VD *0 •w © ro ^ vn o o ro vo O 0 to • . • . * . » • • * « * • • • 3 vo -W " j vn © N) -O X" VO '—1 oo vo O © dP VO « * N) OO de 3 _ •— r 03 -J O OO X" x 00 ro © vn O C I'O 00 0 O a • • * • . . * . . CN V I O C l C l vo —* © O O & 9 dp dp —J o • • o & od < O • 3 O dP 0 * 0 > (D in o Reg ion ■ O D -t 1 O © to rr 0 to • 0 © O 0 —• f 1 • I 1 1 m ro ro vd ro vd x -v o vo in vn X - VD VO rr O VD vo + * ro —1vn 0 * a * -w 0 © ap N> * CO o dp 30 50 (B ID 2 ro 0 rr 0 c 0 3 ■ rr —* (B l/> O O c 3 rr —•* VO — vo O C> • • • • x© "O dP dP O © VO —• - j © O "O — CN ■ • • * O 0 601 vn in SIC 32 S t o n e , Cla y & Glass T o t a l Water* Using ~o o —Nondurables dP © x-vn . Q, . . . dP d p C SIC 30 ”1 > Rub. 6 PI a s . Q cr te 01 SIC 31 Leather © O '—1 Region t 1-19 20-99 100-21*9 250+ Tot. Est. Reg ion II A 1-19 20-99 100-21*9 250+ T o t. E s t . ^ Reg ion 1 IB 1-19 20-99 100-21*9 250+ To t. Est. Region 11IA 1-19 20-99 100-21*9 250+ To t. Est. Region I I I B 1-19 20-99 100-21*9 250+ To t. Est. XI ra i*\ m u — V) >■ u i/i (B — E in u 0) q. a: 0.0? 3-2 7.1 37.9 5 .4? 1.8? 9.2 2 5 .0 36.7 13.6? n 20.0? 0 .0 0.0 12.5? 0.0? 0.0 0.0 16.7 3.2? n n 0.0? n 0.0? 4-1 j - ra n-i u . 4J +J ra >• o u O u L. C U> 0) Cl cd — a) r'- o ra m— c WL C m a. e UJ — 4-1 •— cn q, O I SZ O O -C u c» — c u — 0) u — ran cn o ra cn — ro cn i- o' z: :E iu z; *- LU 0.0? 0.2 2 .3 11.6 0.5? 0.0? 0.5 2 .5 23.3 1.7? 0.0? 0 .0 14.3 0.0 2.2? 0.0? 0.0 0 .0 0 .0 0.0? 0.0? 0.0 0 .0 100.0 5.3? 0.0? 0.0 0,0 14.3 0.1*? 0.0? 6.7 0 .0 38.8 11.7? n 0.0? 0 .0 0.0 20.0? 0.0? 0.0 0.0 0.0 0.0? n n 0.0? n 0.0? 0.0? 0 .0 2.1* 22.2 1*.2? 0.0? 2.7 0.0 1*2.1* 11.7? n 0,0? 0.0 50.0 20.0? 0.0? 0 .0 0 .0 6 0.0 17.3? 0,0? 0.0 0 .0 0.0 0.0? C o co ~ m w — U O — ra l/l L 4J e ra e Q. 3 O' CL UJ 0.0? 0.0 33.3 0.0 1.1*? 0.0? 0.0 25.0 0.0 A.2? 0.0? n 0 .0 0 .0 0.0? n n n n n n n n n n i 3 c ra ro l. n s ra cn L. * 3 (_> o p — ra cj cn ro 2: u0.0? 0.0 0.0 0.0 0.0? 0.0? 5.9 2 0 .0 28.6 1*.0? n n n n n 0.0? 0.0 0.0 0.0 0.0? n n n 0.0? 0.0? Tota 1 Durables 1 EmploymentSize C las s 1 Reg ion TABLE 5- "Approximate percent o f t o t a l manufacturing establishments in water-using durable in dus tr ies th at were l i s t e d on the Water Resources Commission status l i s t f o r 196b, by employments ' ze c a t e g o r ie s , watershed regions, and m e tro p ol it an and nonmetropolitan c o u n t i e s . 3 0.2? 0 .9 3-7 19.7 1.1*? 0 . 1*? 3-8 9 -0 32.5 5-3? 8.6? 8.3 2 6.7 14.3 12.0? 0.0? 0.0 2 .9 37 .5 3.4? 0.0? 0 0 10.0 2 5.0 5.4? —1 H o O — O to — ti rt rt • o o — o 1 1 1 o rt m N M U ) - m ro 3 VI Vn X-VO VD v> vn rt O VD rt O o r-t ■ + ■ + ID (A V* ro rr Vo — O ' J J t O U l O vo 'O • ■ . . . . . H M W V D - U l cn vo o> a* ap ap V = o 3 3 n> rr "1 O • H O — o ro rt o o — • 1 1 1 ro vo —■ m -P* VD VD in VO rt * O O C 3 rt «. ID l/l , 3 (0 rt -l o • 70 <0 to — O 3 C — o ro o o — 1 1 1 ro ro vo — vn X- VD VD O VD + —I o rt * m ro ip vn rt O * + o ro o o i i to vo X-VD VD 70 (D ID O Reg Ion 3 _ < — i — VO -1 — o rt o ro . o o 4^4 Employmenti r 1 m ro ro vd — d S i z e C la s s i/i vn x - vd vd rt o vo . — vo SIC 33 3 . 4 3 • 3 3 Pr imary —i cn o ■o oo vd vo o o O O o o ap ap ap ap ap ap ap Metals (D o o o . 3 3 4 • O O o ap ap SIC 3A o . 3 3 •o © F a b r I c a ted O CD o ae ae Meta Is o o o • 3 - 3 • o O O ap ae ■■< SIC 35 o o o o o * • * * • N on -E 1e c t , o o o o ap ae M a c h in e r y — vo O vo o o ■ • ♦ • -o vo o o ap o • 3 3 o ap ro MW O l-O * * * • * W M OMUI ae ae vo 0-1 VO VO -B- o • * * * » VO VO oo O'VD ap ap — — o • • CD o ap ro -x- o o •—< •o ■ • • -o vn — VD — ap ap 3 n ro ro o vn • • • -J O O ap 3 n n n ro —• o 'O ro o ■ * * * • VO O —' O' o ae ae 3 Transport Equ i pment n n o . 3 3 o ap n n n ro ro o CO o • * . . ro o cn o ap n o . .o . o . o. o o o o o o ap ap o * O ap SIC 37 3 n n n to —1o vn o • • • i Jr O O O ap ro x - ro o o • * * * 3 3 ro cn vd o ap vn SIC 36 o o o o 4 3 • • 3 E le c t r i cal o o o rtach i n e r y ap ap n n n vn CD CD O O O cn . . . . . * O' VO o o o -tap ap ap n n n VO '0 0 — 0 0 « • * * • o vo vn os o ae ap n 3 3 n •— t cn —■ K> GJ W S J O N O ■—i —■vd ■—i ro — C O O' — O • • * * ■ » i t • r . . • • . w — vo vn vn vo co vn o — vn oo oo o —• vn O ap ap ap ap ap ap CD *0 ■o vo *< VO x -----o o — — o o o .vn. ro. o. o — . • 1 t # ■ * . • * • pt o ■o cd cn oj o cd vo vn -c- o vn vn VD — O ap ap ap ap ap ap rt ir U> —4 vo rt ro 01 va) vn o ro o vd o co ro o vo o o o . . . . . . . . . 4 • • • * • cr — vo co o cn cn -e-vn o os O' CD VO o o o ap ae ap ap ap ap a * 3 SIC 38 Y e c I s Ion iqu lp me nt SIC 39 Manu­ factu rers 3 M isc. b Emp, in S ta tu s L is t P la n tS a ,c % o f M fg. Emp. in S t a t u s - L is t P la n ts Rat in g s Rat in g s B-E E (1) (2) (31 667-8 288.0 130.2 8 6 .3 7 0 .5 2 3 .7 1.2 1 ,0 8 5 .9 178.5 6 8 .9 20.8 25.0 6 .3 1.3 B-E % o f T o ta l Labor Force in S t a t u s - L is t P la n ts T o ta l Labor F o rc e " R a tin g s E B-E E (2 ) 7 ( 6 ) (3 )7 (6 ) [3 7 7 1 1 7 ' (6) 3 3 .2 12.61 5.0% 1,877.1 16.6 2 6 .5 S .o 8 0 9 .9 8 .7 IB .2 0 .9 3 3 0 .3 7 -2 16.6 * 6.5% 0.6 20.6% 2.2 6.6% 2.2 92.6 83.0 0 .5 16.9 7 .2 3 9 .0 " ( 2 ) / '( I ) 3 ,0 1 7 .3 P e rc e n t T .L .F . in H fg .e ( D /1 6 ) i.a% 35.6% 3 5 .6 5 .9 1 1.8 0.6 1.6% 6.6% 1.6% 22.5% 0 .7 0 .7 30.1 1.3 0.6 1.0% 18.6 8.6 21.3% 6.5% 39.6 36.0% 5-1 0.6 1.1 1.1 7 .0 0.2 2.6 21.2 12.0 * 6.6 5 8 .) 6.5% 273.3 2.8 1.8 2.6% M e tr o p o lita n C o u n tie s 9 2 7 .6 123.5 3 2 .6 13-3% 3-5% 2 ,5 7 2 .6 6.8% 1.3% 36.0% Nortm etropol it a n C o u n tie s ; T h ro u g ho u t M ich ig a n S o u th . Three Reg. O nly 2 1 6 .A 158.3 6 1 .9 5 6 .9 19.1 16.6 28.6/, 666.7 B.6% 12.3% 2.7% 3-71 30.1% 35.6% 1 ,1 6 6 .0 185.6 5 1 .5 16. 3 ,2 9 0 .6 5-6% 1.6% 36.8% Reg ion I I I B Region IV Region V N o rth e rn Four Regions T o ta l H ic h ig a n 7 -2 8.7% 3 6 .7 2 10.6% n 6.5% 5 8 .9 718.0 aA11 employment f ig u r e s in th o usa n d s. Due t o ro u n d in g , employment f ig u r e s n o t add up to employment f o r p a r t ic u la r groups o r f o r th e e n t ir e s t a t e . ^From T a b le s 6 th ro u g h 15. f o r v a rio u s re g io n a l subgroups may Employment in M arch, 1968. c From T a b le s 6 th ro u g h 15. M o n th ly -a v e ra g e t o t a l ta b o r fo rc e s in 1968 w h ic h , f o r th e m ost p a r t , have been o b ta in e d by s u n n in g employment f ig u r e s re p o rte d f o r c o u n tie s and la b o r a re a s by S ta te o f H ic h ig a n , Employment S e c u r ity C o ron ission , "L a b o r F orce and Employment E s tim a te s ," HESC Form 3221, Rev. 1 2 /6 2 . H o n th ly -a v e ra g e e s tim a te s were n o t a v a ila b le f o r lo n la , M ontcalm , M eco sta , Roscommon, G la d w in , Io s c o , Is a b e lla , M id la n d , and A lco n a c o u n tie s , w h ic h a re in e it h e r R egions I I A , I IB , o r IIIB . MESC Form 3221 d id , how ever, r e p o r t December, 1968, e s tim a te s f o r th e se c o u n tie s , and th e December e s tim a te s w ere used in a r r iv in g a t th e t o t a l la b o r fo rc e o f Regions I I A , I IB , o r I I I B . tlo m o n th ly -a v e ra g e e s tim a te s o f employment in th e t o t a l la b o r fo r c e were a v a ila b le f o r Lenawee, S a n ila c , A lle g a n , B ra n ch , Cass, H il ls d a le , Van B u re n , and T usco la c o u n tie s w h ich a re in e it h e r Regions I , I I A , o r IM A . O n ly H a tc h , 1968, f ig u r e s w ere re p o rte d f o r th e s e c o u n tie s . These March f ig u r e s , t h e r e f o r e , had t o be in c lu d e d in r e g io n a l t o t a l s used in T a b le 16 f a r R egions I , I I A , and IM A . ^ P e rc e n t o f t o t a l la b o r fo r c e employed in th e e n t ir e m a n u fa c tu rin g s e c to r . T71 (5) j u s t those n o n m e t r o p o l i t a n c o u n t i e s located in t h e t h r e e s o u t h e r n ­ most watershed regions.^- A n a l y s i s o f T a b l e 16 T a b l e 16 shows t h a t th e combined f o u r n o r t h e r n compared w i t h a l l o t h e r combined groups o f w at er she d r e g i o n s , smallest proportions o f t h e i r lis t r e g i o n s , when total l a b o r f o r c e employed had th e in s t a t u s - p l a n t s w i t h d i s c h a r g e s a s sig ned a l e s s - t h a n - a d e q u a t e r a t i n g . the w o r s t - p o s s i b l e employment e f f e c t s which e m i t t e d E - r a t e d d i s c h a r g e s total work. la b o r f o r c e tio ns, had o n l y extended o v e r p l a n t s in 1968, o n l y 1 . 0 p e r c e n t o f t h e in thes e f o u r r e g io n s would have been f o r c e d o u t o f Even i f a l l th e f o u r If s t a t u s - 1 i s t p l a n t s w i t h d i s c h a r g e s a s sig ne d one o f l e s s - t h a n - a d e q u a t e r a t i n g s had been f o r c e d then o n l y 2 . 6 p e r c e n t o f th e t o t a l t o shut down o p e r a ­ work f o r c e o f the s e n o r t h e r n re g io n s would have l o s t t h e i r j o b s . The south ern n o n m e t r o p o l i t a n c o u n t i e s and t h e n o th e rn f o u r r e gi on s comprise a l l Perhaps th e most o f the n o n m e t r o p o l i t a n c o u n t i e s in H i c h i g a n . im p o rt a n t f e a t u r e o f T a b l e 16 is t h a t these northern and southern c o u n t e r p a r t s o f M i c h i g a n ' s n o n m e t r o p o l i ta n c o u n t i e s con­ t r a s t s t r i k i n g l y w i t h r e s p e c t t o shares o f th e ir labor forces that would have been d i s p l a c e d by s t r i c t and u n if o r m enfor ce men t o f d i r e c t regulatory c o n tro ls . N o n m e tr o p o l it a n c o u n t i e s in cl ud e d in the f o u r n o r t h e r n watershed re g io n s would have avoided th e b r u n t o f w o r s t p o s s i b l e adv ers e e f f e c t s from t h e s e e n f o r c e m e n t s . Nonmetropolitan *The f o u r no rthernmost watershed r e g io n s a r e comprised e n t i r e l y o f n o n m e t r o p o l i ta n c o u n t i e s . In e f f e c t , t h e n , th e row o f T a b l e 16 which p e r t a i n s to these f o u r r e gi on s co ul d have been l a b e l e d Nonmetro­ p o lit a n Counties: N o r t h e r n Four Regions O n ly . 172 counties in th e t h r e e sou th er n r e g i o n s , on t h e o t h e r hand, would have borne the b r u n t o f those a d v e r s e e f f e c t s . total 1.0 labor force As men tion ed a bo v e , in th e n o r t h e r n n o n m e t r o p o l i t a n c o u n t i e s had o n l y p e r c e n t and 2 . 6 p e r c e n t included in s t a t u s - 1 i s t d i s c h a r g e s and B- t hr ou g h E - r a t e d d i s c h a r g e s , percentages a re the in d i s t i n c t c o n t r a s t w i t h plants w ith E-rated resp ectively. These th e r e s p e c t i v e 317 p e r c e n t and 1 2 .3 p e r c e n t f i g u r e s which a p p l y to t h e s o u t h e r n n o n m e t r o p o l i t a n c o u n t i e s . In f a c t , no r e g i o n a l subgroup, t h e m s e l v e s , had n e a r l y as g r e a t employed in cludin g the sep a ra te watershed regions shares o f t h e i r total labor forces in the se r e s p e c t i v e kinds o f s t a t u s - I i s t p l a n t s as d i d the sou thern n o n m e t r o p o l i t a n c o u n t i e s . Underlying reasons f o r the s e d i f f e r e n c e s between r e g i o n a l Impact subgroups can be understood from a c l o s e r Among th e broad r e g i o n a l impact subgroups, t h e combined f o u r n o r t h e r n re g io n s had th e s m a l l e s t p e r c e n t a g e s h a r e , o r total lo ok a t T a b l e 16. 12.0 p e rc e n t, o f t h e i r m a n u f a c t u r i n g work f o r c e t h a t was employed w i t h d i s c h a r g e s a s sig ned one o f th e f o u r in s t a t u s - 1 i s t p l a n t s less-than-adequate ra tin g s . And t h e sha re o f th e m a n u f a c t u r i n g work f o r c e o f th e s e n o r t h e r n r e g io n s t h a t worked in d i s c h a r g e s , a share o f shares t h a t a p p l i e d en tire state. to In t h i s ju st those s t a t u s - 1 i s t p e r c e n t , was equal t h e southernmost t h r e e respect, however, plan ts w ith E-rated t o t h e same r e s p e c t i v e r e g i o n s and t o th e th e m e t r o p o l i t a n c o u n t i e s o f M ich ig an d i d have a s m a l l e r share o f 3 * 5 p e r c e n t . broade r r e g i o n a l by f a r impact subgroups, t h e combined n o r t h e r n th e s m a l l e s t p r o p o r t i o n o f t h e i r t o t a l employed But among th e in th e m a n u f a c t u r i n g s e c t o r . r e g io n s had l a b o r f o r c e t h a t was Only 2 1 . 3 percent o f t h e i r 173 total l a b o r f o r c e worked in a j o b the o t h e r hand, between 3 0 .1 in t h e m a n u f a c t u r i n g s e c t o r . p e r c e n t and 3 6 . 0 p e r c e n t o f t h e t o t a l l a b o r f o r c e s o f t h e o t h e r broad r e g i o n a l manufacturing j o b s . ' On impact subgroups worked in Among t h e s e o t h e r broad subgroups, however, none had a m a n u f a c t u r i n g work f o r c e w i t h as g r e a t a p r o p o r t i o n w o rk in g statu s-1ist plants w ith 1e s s - t h a n - a d e q u a t e l y th e south ern n o n m e t r o p o l i t a n c o u n t i e s . f a c t u r i n g employees In s t a t u s - 1 i s t in r a t e d d i s c h a r g e s as di d About one o u t o f e v e r y ten manu­ in thes e sou thern n o n m e t r o p o l i t a n c o u n t i e s worked plan ts w ith E -ra te d discharges. t h r e e o f th e m a n u f a c t u r i n g w o rk e r s And about one in e v e r y in th e s e c o u n t i e s found employment in s t a t u s - 1 i s t p l a n t s w i t h d i s c h a r g e s a s sig ned one o f th e f o u r less- than-adequate r a t i n g s . One i m p l i c a t i o n o f t h e A n a l y s i s o f T a b l e Se ver al of Table 16. it direct kin d s o f impl i c a t i o n s can be drawn from t h e a n a l y s i s One example o f the s e im p lic a tio n s has been seen t h a t s t r i c t and reg u lato ry c o n tro ls against is as f o l l o w s . immediate e nf or c e m e nt o f in d u strial p o t e n t i a l l y caused t h e w o r s t - p o s s i b l e to comprise r e l a t i v e l y 16 d i s c h a r g e s would have I n c i d e n c e o f employment l a r g e p r o p o r t i o n s o f th e t o t a l south ern n o n m e t r o p o l i t a n c o u n t i e s . losses labor fo rc e of Such enf or c e m e nt by the M ic hi ga n ' B o t h th e m e t r o p o l i t a n and n o n m e t r o p o l i t a n c o u n t i e s w i t h i n the sou thern r e g i o n s had about 36 p e r c e n t o f t h e i r t o t a l l a b o r f o r c e s employed in the m a n u f a c t u r i n g s e c t o r . T h i s same a pp r o x im a t e p e r c e n t a g e f i g u r e a l s o a p p l i e d t o Regions I and I I A . The r e s p e c t i v e p e r c e n t a g e f i g u r e f o r Region I I I A , however, was somewhat l a r g e r , o r 39.^4 p e r c e n t . These p r o p o r t i o n a l f i g u r e s a r e a n o t h e r i n d i c a t i o n o f t h e widespread oc c u r r e n c e o f m a n u f a c t u r i n g a c t i v i t i e s th ro u g h o u t t h e s o u t h e r n on et h i r d o f M tch i gan . 174 M a t e r Resources Commission In t h e caused t h e g r e a t e s t p r o p o r t i o n a l la te lo s s e s s e lf s a m e s o u t h e r n H i c h i g a n c o u n t i e s 1 9 60 s , t h e r e f o r e , would have in employment t o o c c u r t h a t were a b l e t o In t h e Increase t h e i r m a n u f a c t u r i n g work f o r c e between 1950 and 1970 by a p r o p o r t i o n a l amount t h a t was g r e a t e s t among any o f t h e broad r e g i o n a l groups. ^ have a t Th us , t h e c o m m is s i o n ' s s t r i c t least p a r t i a l l y o ffs e t m a n u f a c t u r i n g work f o r c e o f during the previous e n f o r c e m e n t s most impact sub­ l i k e l y would t h e amount o f d e c e n t r a l i z a t i o n so u t h er n M ic h i g a n t h a t in t h e had t a k e n p l a c e two d e c a de s . T h i s s t a t e m e n t is based upon background i n f o r m a t i o n on w a t e r ­ shed r e g i o n s t h a t t h e a u t h o r has w r i t t e n in t h e form o f an u n p u b l i s h e d m a n u s c r i p t r e f e r r e d t o in Appe nd ix A. CHAPTER VI I I THE ACTUAL INCIDENCE OF BENEFICIAL EFFECTS FROM SUBSIDY PROGRAMS I n t r o d u c t ton T h i s c h a p t e r r e p o r t s t h e r e s u l t s o f r e s e a r c h designed t o a t t a i n the second o b j e c t i v e o f t h i s s t u d y . T h i s o b j e c t i v e re a d s : To i d e n t i f y which Standard I n d u s t r i a l C l a s s i f i c a t i o n s , e m p lo y m e n t - s iz e c a t e g o r i e s , and l o c a t i o n s o f m a n u f a c t u r i n g p l a n t s in M ich ig an have been most a b l e to r e c e i v e b e n e f i c i a l e f f e c t s from v a r i o u s sub sid y programs which h e lp pay th e c o s t s o f b u ild in g public p o llu tio n control f a c i l i t i e s . St u d ie d subsidy programs have been V I. in tr o du c e d T h e ir a d m in i s t r a t iv e d e t a i l s a re given id en tifie d in Appendix A. Sources o f In C hap te rs II and in un pub li she d m a n u s c ri p t s i n f o r m a t i o n about t h e d i s t r i b u ­ t i o n o f g r a n t s and loans from subsid y programs have been r e f e r r e d to in Chapter VI and Appendix E. Cha pte r VI and Appendix E a l s o d e s c r i b e the kinds o f d a t a c o l l e c t e d about each program and th e methods by which it has been a n a l y z e d . Chapter III led to O b j e c t i v e 2 . actual patterns summarizes th e e x p l o r a t o r y r e s e a r c h process which During t h i s in the p r o c e s s , o b s e r v a t i o n s were made about in c i d e n c e o f b e n e f i c i a l d e v e lo p in g d u r i n g th e l a t e responded to s u b s t a n t i a l effects t h a t were 1960s as m u n i c i p a l i t i e s and m a n u f a c t u r e r s in c r e a s e s o f public water p o l l u t i o n co n tro l in s u b s i d i e s f o r fa c ilitie s . ^From the P r e f a c e . 175 the c o n s t r u c t i o n 176 E xp lo rato ry research discovered that in c r e a s e d f e d e r a l s t a t e s u b s i d i e s were c o n s id e re d a ma jor f a c t o r behind a t r e n d 1960s f o r g r e a t e r p r o p o r t i o n s o f public u t i l i t y sewers. to be among the b a s ic treated in t h e i n d u s t r i a l w a s t e w a t e r s t o be sen t t o Consequently, in cre as ed s u b s i d i e s were thought reasons why g r e a t e r shares o f w a s t e w a t e r s in p u b l i c f a c i l i t i e s were coming from i n d u s t r i a l establishm ents. The need t o p r o v i d e p u b l i c t r e a t m e n t f o r a growing volume o f in d u strial w a s te wa te rs was a l s o c i t e d as a p r i n c i p l e cause f o r a r e l a t e d Many p u b l i c t r e a t m e n t p l a n t s which served communities o f a t 1 0 ,0 0 0 and trend. least persons were being b u i l t w i t h amounts o f excess c a p a c i t y sub­ s t a n t i a l l y g r e a t e r than t h a t r e q u i r e d t o t r e a t j u s t p r o j e c t e d volumes o f domestic w a s t e w a t e r s . S u b s i d ie s induced a d d i t i o n a l treatm ent o f in dustrial in p u b l i c works because l o c a l i t i e s were not r e q u i r e d wastewaters t o r e c o v e r th os e p o r t i o n s o f c o n s t r u c t i o n c o s t s paid from f e d e r a l or s ta te existence o f subsidies, u n i t s o f government to levy a r t i f i c i a l l y works. t h e r e f o r e , allowed The low sewer s e r v i c e charges upon users o f t r e a t m e n t Stud ied subsid y programs have, public treatment f a c i l i t i e s therefo re, to g a in b e n e f i t s savings from low sewer s e r v i c e c h a r g e s . fa c ilitie s , local fu n d s . however, a ll o w e d t h e us er s o f in the form o f c o s t Nonusers o f p u b l i c treatment have no t been a b l e t o w i t n e s s th e s e c o s t s a v i n g s . E x p l o r a t o r y r e s e a r c h found t h a t not a l l and l o c a t i o n s o f m a n u f a c t u r in g e s t a b l i s h m e n t s use o f p u b l i c w a t e r p o l l u t i o n c o n t r o l c la s s ific a tio n s , in M ic hi ga n made equal fa c ilitie s . about th e uneven d i s t r i b u t i o n o f b e n e f i t s manufacturing p l a n t s w i t h i n the v a ri o us sizes, O b s e r v a t i o n s were made from s u b s id y programs among impact groups and subgroups o f 177 the r e s e a r c h fra m e wo rk . III, These o b s e r v a t i o n s a r e Appendix H, and s e v e r a l o f t h e m a n u s c r i p t s included w i t h i n listed Chapter in Appendix A. T h i s p r e s e n t c h a p t e r re vi ew s t h e r e s u l t s o f methods des ign ed t o p r o v i d e empirical ba c k in g f o r th e s e o b s e r v a t i o n s . The Ma gn it ud e o f S u b s i d i e s Before tu rn in g to the review o f research r e s u l t s , is g i v e n o f t a b l e s in u n r e p o r t e d m a n u s c r i p t s which r e p o r t t h e t o t a l d o l l a r amounts o f s u b s i d i e s a l l o c a t e d September, 1969. combined t o t a l A ll fiv e federal by v a r i o u s programs p r i o r o f $77*1 m i l l i o n d o l l a r s Gra nts w o r t h $ 4 0 . 5 m i l l i o n P . L . 8 4 - 6 6 0 program. had been These above t o t a l s and p o s s i b l y a l l o f the fe d e r a l th e end o f t h e Great D epr es sio n pu blic water p o llu t i o n c o n tro l By September o f thr ough two rounds o f A total E ither t o H i c h i g a n c o m m u n it ie s . to ta l; issued loan s o n l y $ 4 . 7 m i l l i o n . in a c co rd an c e w i t h t h e The re m a in in g f o u r f e d e r a l a combined t o t a l o f $ 3 6 . 7 m i l l i o n I9&9, its o f $ 1 03 *0 m i l l i o n to s u b s id y programs had d i s t r i b u t e d a Gra nts comprised $ 7 2 . 4 m i l l i o n o f t h i s lo c a litie s . a summary in g r a n t s o r represent a l l programs had p r o v i d e d loans to M ic h i g a n of th e f e d e r a l grants l o a n s ' which had been p r o v i d e d since in s u p p o r t o f t h e c o n s t r u c t i o n o f works in H i c h i g a n . th e M ic h ig a n bond program had gone l e g i s l a t i v e l y prescribed a l l o c a t i o n process. had been d i s b u r s e d d u r i n g t h e s e two rounds. r e t r o a c t i v e payments t o communities had been a u t h o r i z e d or ' as mentioned In C h a p te r V I , t h e a u t h o r was no t a b l e t o l e a r n about th e amount o f any loans which H i c h i g a n communities m ig h t have r e c e i v e d in supp ort o f t h e c o n s t r u c t i o n o f sewer f a c i l i t i e s under t h e p u b l i c f a c i l i t y loan program a u t h o r i z e d by the Housing Amendments o f 1955. 178 a p p lic a tio n s had been approved and ranked t o cause some $ 9 8 . 6 m i l l i o n t o be d e s i g n a t e d as s u p p le m e n ta r y g r a n t s t o f e d e r a l Another $ ^ .4 m i l l i o n had been a u t h o r i z e d f o r d i s t r i b u t i o n towns whose a p p l i c a t i o n s f o r a s s i s t a n c e sewer p r o j e c t s g r a n t programs. t o small in th e f i n a n c i n g o f s a n i t a r y had been approved and ra nked.^ Estim ates o f the In c i d e n c e o f B e n e f i c i a l E ffects T a b l e s 3 Through 5 R e v i s i t e d In terp retatio n s of Percentage Figures Percentage fig u r e s r e p o r t e d by T a b l e s 3 th ro ug h 5 approxim ate p ro p o rtio n s o f the t o t a l ments w i t h i n various wastewater c o n tr o l sion f o r 19 68 . 2 number o f m a n u f a c t u r i n g e s t a b l i s h ­ impact groups and subgroups t h a t were named on t h e statu s lis t o f t h e M ic h i g a n Water Resources Commis­ These p e r c e n t a g e s thus r e p r e s e n t p r o p o r t i o n s o f e s t a b l i s h m e n t s w h ic h d i s c h a r g e d t h e i r w a s t e w a t e r s d i r e c t l y waters. Th es e p r o p o r t i o n s , d ir e c tly c o n tro lle d the p o te n tia l the d i r e c t The l a r g e r t h e r e f o r e , e m i t t e d w a s t e w a t e r s which were as sumptions and l i m i t a t i o n s , T a b l e s 3 t h r o u g h 5 have been ment o f in to public by t h e commission. Under c e r t a i n in dicators o f indicate in terpreted the percentages o f in th e p r e c e d i n g c h a p t e r as in c i d e n c e o f a d v e r s e e f f e c t s from e n f o r c e ­ r e g u l a t o r y c o n t r o l s a d m i n i s t e r e d by t h e commission. (s m aller) p e r c e n t a g e s have been used t o ^A11 m o n e t a r y v a l u e s e xpr ess ed above a r e i n d i c a t e those In terms o f c u r r e n t values. 2 The r e a d e r w i l l Chapter V I I . . recall t h a t these t a b le s a r e given in 179 impact groups and subgroups which stood t o w i t n e s s t h e g r e a t e r po tential a d v e rs e e f f e c t s from such e n f o r c e m e n t . The f o l l o w i n g assumption has been r e q u i r e d the p o t e n t i a l Incidence o f adverse e f f e c t s 1968 s e n t a l l of through 5 to located into pu blic u t i l i t y sewers. In into pu blic T h i s same assumption In d ic a te the a c tua l incidence o f b e n e f i c i a l Under t h i s a s s u m p t io n , t a b l e s can be used t o from r e p o r t e d by these in d ic a t e the prop ortio ns o f estab lishm ents w i t h in impact groups and subgroups t h a t sen t a l l to p u b lic f a c i l i t i e s . t h a t the l a r g e r in d ic a te the lesser effects the unreported p e r ­ cen ta ge f i g u r e s which a r e complements t o t h e f i g u r e s from s t u d i e d It f o r when usi n g t h e p e r c e n t a g e s g i v e n by T a b l e s 3 s t u d i e d sub sid y programs. tions.^ In te rp re t In M ic h ig a n I t s wastewater discharges e i t h e r d i r e c t l y waters or d i r e c t l y is a l s o c a l l e d In o r d e r to In t h e above manner. has been assumed t h a t each m a n u f a c t u r i n g p l a n t various (lesser) From t h i s (sm aller) (greater) It o f t h e i r discharges f o l l o w s , under s t i l l o t h e r assump­ p e r c e n t a g e s o f T a b l e s 3 th r o u g h 5 Incidence o f the b e n e f i c i a l effects sub sid y programs which had been r e c e i v e d by v a r i o u s c la s s ific a tio n s , s i z e s , and l o c a t i o n s o f m a n u f a c t u r i n g p l a n t s . Assumptions and L i m i t a t i o n s I n t e r p r e t a t i o n o f th e incidence o f b e n e f i c i a l f o r e g o i n g manner I m p l i e s t h a t an In d ire c t Or, a l t e r n a t i v e l y stated, In t h e r e l a t i o n s h i p e x i s t s between t he magnitude o f r e p o r t e d p e r c e n t a g e s and t h e effects. effects incidence o f b e n e f i c i a l such i n t e r p r e t a t i o n im plies th a t a d i r e c t r e l a t i o n s h i p e x i s t s between t h e magnitude o f th e u n r e p o r t e d * R e f e r to Appendix G f o r th e s e o t h e r a s su m p ti o n s . 180 complements o f r e p o r t e d p e r c e n t a g e s and t h e effects. In c i d e n c e o f b e n e f i c i a l These r e l a t i o n s h i p s can be s a i d t o e x i s t w i t h i n o f c e r t a i n assumptions and t h e i r a s s o c i a t e d explained t h e bounds l i m i t a t i o n s which a r e in Appendix G. Patterns o f by T a b l e s In c i d e n c e indicated Pr oc ed ur al comments T a b l e s 3 thr oug h 5 a r e now re viewed patterns in t h e in c i d e n c e o f b e n e f i c i a l programs. ge ne ra l F irst of a l l , patterns in th e in o r d e r t o d e p i c t g e n e r a l effects from s t u d i e d subsid y o n l y T a b l e 3 is examined. incidence o f b e n e f i c i a l s i z e s and l o c a t i o n s o f p l a n t s w i t h i n effects broad in d u strial upon d i f f e r e n t Then T a b l e s 4 and 5 a r e c o n s u l t e d . These two t a b l e s a l l o w some d i s t i n c t d i f f e r e n c e s incidence fo r c e r t a i n in dicates th e broad W a t e r - U s i n g Nondurables and W a t e r - U s in g D u r a b le s c a t e g o r i e s . patterns o f It in dustries t o be noted among t h e in c l u d e d w i t h i n the two gr ou ps . F a i r l y e x t e n s i v e synopses o f T a b l e s 3 th r o u g h 5 have been w ritten In th e p r e v i o u s c h a p t e r . about t h e These r e v i e w s summarize h i g h l i g h t s i n c i d e n c e o f a d v e rs e e f f e c t s N evertheless, pr e s e n t t a s k . from r e g u l a t o r y p o l i c i e s . th e s e f o r e g o i n g summaries have much r e l e v a n c e to th e They mentioned th e magnitude o f reported percentages which i n d i c a t e th e p r o p o r t i o n s o f e s t a b l i s h m e n t s w i t h i n v a r i o u s groups and subgroups which e m i t t e d d i r e c t l y - c o n t r o l l e d 1968. Because such d i m e n s i o n a l d e t a i l s coming synopses about t h e so d e t a i l e d . Rather, discharges have a l r e a d y been g i v e n , in c i d e n c e o f b e n e f i c i a l t h e y can make more g e n e r a l impact effects in fo rth ­ need no t be comments about b a s i c 181 d i f f e r e n c e s w h ic h e x i s t among t h e s h a r es o f e s t a b l i s h m e n t s w i t h i n v a r i o u s subgroups w h ic h made use o f m u n i c i p a l ben efits fa c ilitie s from s u b s i d i e s . In te rs p e rs e d throughout thr o u g h 5 the n a r r a t i v e r e p o r t e d by t h e t a b l e s . s t a t e d as a t existed summaries o f T a b l e s 3 in t h e p r e v i o u s c h a p t e r a r e o b s e r v a t i o n s ab ou t u n d e r l y i n g causes f o r c e r t a i n d i f f e r e n c e s fig u res and t h e r e b y g a in e d le a s t p a r tia l some o f t h e in m a g n it u d e s o f p e r c e n t a g e These c a u s e s , o r r e a s o n s , e x p l a n a t i o n s a bo u t why d i s t i n c t in t h e p r o p o r t i o n s o f e s t a b l i s h m e n t s w i t h i n subgroups which e m i t t e d d i r e c t l y - c o n t r o l l e d how eve r, d ifferences various discharges. have been w r i t t e n have been Impact The causal factors themselves, various t y p e s o f e s t a b l i s h m e n t s have made d i f f e r e n t amounts o f use o f pu blic water p o llu tio n control relevant t o t h e t a s k now a t hand. why c e r t a i n These causes reasons why These reasons a r e q u i t e For t h e y a t le a s t p a rtia lly explain k in d s and l o c a t i o n s o f m a n u f a c t u r i n g p l a n t s have been a b l e to gain g r e a t e r or lesser b e n e fits (or reasons) are no t, th e summaries w h ic h f o l l o w . facto rs fa c ilitie s . In terms o f from s t u d i e d ho we ver , s u b s i d y programs. in te rs p e rs e d throughout R a t h e r , a s e p a r a t e d i s c u s s i o n abou t ca us al is t a k en up when recommendations f o r further r e s e a r c h a r e made in C h a p t e r X I I . General patterns o f incidence Table 3 re veals that re la tiv e ly f a c tu r in g establishm ents w ith in pu blic water p o llu tio n from s t u d i e d w ith in ce rta in s i z a b l e p r o p o r t i o n s o f manu­ impact subgroups made use o f c o n t r o l works a n d , s u b s id y prog rams. t h e r e f o r e , g a in e d b e n e f i t s Such e s t a b l i s h m e n t s in clu d e those s u c c e s s i v e l y s m a l l e r employment s i z e c a t e g o r i e s w i t h i n th e 182 m e t r o p o l i t a n component o f t h e W a t e r - U s i n g D u r a b l e s c a t e g o r y . opposite extreme, other re la tiv e ly small Impact subgroups used p u b l i c subsidies. Such e s t a b l i s h m e n t s proportions o f establishm ents w ith in fa c ilitie s indicated successively These l a t t e r in C ha pt e r V I I ty pe s o f e s t a b ­ as h a v in g o f bei n g most a d v e r s e l y a f f e c t e d by t h e p o t e n t i a l of w o rst-po ssib le e ffe c ts from t h e n o n m e t r o p o l i t a n component o f t h e W a t e r - U s i n g N on du rab les c a t e g o r y . po ten tial and g a in e d b e n e f i t s i n c l u d e th os e w i t h i n l a r g e r em ploym ent-size c a te g o r ie s w i t h i n li s h m e n t s a r e t h e same ones At t h e from e n f o r c e m e n t o f the incidence regulatory co n tro ls. D e v i a t i o n s away from g e n e r a l p a t t e r n s o f in c i d e n c e T a b l e s A and 5 r e v e a l for c e rta in tw o -d ig it that the in c i d e n c e o f b e n e f i c i a l effects i n d u s t r i e s d e v i a t e s q u i t e s u b s t a n t i a l l y from the a f o r e m e n t i o n e d p a t t e r n s which a p p l y t o t h e more in c lu s iv e Water- Using N on du rab les o r W a t e r - U s i n g D u r a b le s c a t e g o r i e s . Some o f th e more n o t i c e a b l e d e v i a t i o n s a r e as f o l l o w s . Three i n d u s t r i e s o r components o f in dustries w ith in the W a te r- Using N on du rab les c a t e g o r y st and t o g e t h e r as ha v in g made much g r e a t e r use o f m u n i c i p a l in dustries w ith in fa c ilitie s than o t h e r th is category. m e t r o p o l i t a n component o f r ubb er and p l a s t i c s Hereby r e f e r r e d th e food p r o c e s s i n g i n d u s t r y , and th e n o n m e t r o p o l i t a n component o f In f a c t i n d u s t r i e s o r components o f (3) a ll in dustry, (1) (2) th e the e n t i r e but t h e l a r g e s t p l a n t s w i t h i n the s t o n e , c l a y , the p r o p o r tio n s o f p la n ts w i t h i n to a re th e s e and g l a s s in dustry. in d u stries or parts of i n d u s t r i e s which s e nt t h e i r w a s t e w a t e r s t o p u b l i c fa c ilitie s e ith e r approached o r exceeded t h e r e s p e c t i v e p r o p o r t i o n s f o r many I n d u s t r i e s 183 w i t h i n t h e W a t e r - U s in g D ur ab le s c a t e g o r y . T a b l e A shows t h a t o t h e r At th e o p p o s i t e e x t r e m e , i n d u s t r i e s o r subgroups t h e r e o f a r e c h a r a c ­ t e r i z e d by having made much le ss use o f p u b l i c f a c i l i t i e s w ithin t h e W a t e r - U s in g Nondurables c a t e g o r y or subgroups o f w ithin (2) In d u stries include (1) in g e n e r a l . than p l a n t s Such i n d u s t r i e s th e t h r e e s m a l l e r s i z e c a t e g o r i e s t h e n o n m e t r o p o l i t a n component o f t h e food p r o c e s s i n g industry, those paper p l a n t s thro ug ho u t M ic h ig a n which employed a t 250 p e r s o n s , (3 ) those c h e m ic a ls p l a n t s thro ug ho u t M ic h ig a n which p r i m a r i l y employed from 20 t o 249 p e r s on s , and ( 4 ) w ithin least th e l a r g e s t p l a n t s t h e n o n m e t r o p o l i ta n components o f t h e p e t r o le u m s t o n e , c l a y , and g l a s s i n d u s t r y and t h e industry. T u r n in g to T a b l e 5 and th e W a t e r - U s in g D u r a b le s c a t e g o r y , sub­ s t a n t i a l l y a b o v e - a v e r a g e use o f p u b l i c f a c i l i t i e s was made by p l a n t s w ithin the n o n - e l e c t r i c a l ponent o f machinery th e p r e c i s i o n equipment manufacturers industry. employed a t th e n o n m e t r o p o l i t a n com­ i n d u s t r y , and th e m i s c e l l a n e o u s Conversely, c e r t a i n tions of plants w ith in other use o f p u b l i c f a c i l i t i e s . industry, sp ecific s i z e s and l o c a ­ i n d u s t r i e s made s u b s t a n t i a l l y b e lo w - a v e r a g e T h is p a r t i c u l a r l y a p p l i e s t o p l a n t s which l e a s t 250 persons w i t h i n th e m e t r o p o l i t a n component o f the p r im a r y m e t a l s I n d u s t r y and w i t h i n th e n o n m e t r o p o l i t a n components o f both t h e f a b r i c a t e d m e t a l s and t h e t r a n s p o r t a t i o n equipment These l a t t e r two i n d u s t r i e s were j o i n e d by f i v e W a t e r - U s in g Nondurables c a t e g o r y ( n a m e ly , p e t r o le u m ; and s t o n e , c l a y , and g l a s s none to o n l y about 40 p e r c e n t o f t h e i r in dustries. in d u stries w ith in the the fo od ; pa p e r ; c h e m i c a l s ; in dustries) in having had from la r g e s t nonm etropolitan plan ts which had sent any d i s c h a r g e s t o p u b l i c u t i l i t y sewers. Thus, the I8it la r g e s t employment-size c a te g o r ie s w i t h i n o f t h e s e seven i n d u s t r i e s a r e t h e n o n m e t r o p o l i t a n components i n d i c a t e d as h a v in g t h e l e a s t sh a re s o f p l a n t s w h ic h had been a b l e t o g a i n any f i n a n c i a l b en efit from th e a l l o ­ cation o f subsidies. An I n d i c a t i o n o f t h e Degree o f U n i f o r m i t y in t h e A l l o c a t i o n o f S u b s i d i e s Background and Purpose Du rin g e x p l o r a t o r y r e s e a r c h , in Appendix E y i e l d e d d a t a ab ou t t h e c o m m un iti es . effects sourc es o f inform ation referred to r e c e i p t o f s u b s i d i e s by H i c h i g a n T h i s d a t a has r e l e v a n c e to t h e incidence o f b e n e f ic ia l from s t u d i e d s u b s id y programs w h ic h s up po rt the c o n s tru c tio n of t r e a t m e n t works.^ Table 17 p r e s e n t s i n f o r m a t i o n ab ou t t h e number o f m u n i c i p a l wastewater treatm ent f a c i l i t i e s o p e r a t e d w i t h i n M ic h i g a n had been s u b s i d i z e d by one o r more o f t h e s t u d i e d programs. 2 T h i s t a b l e p e r m i t s an e v a l u a t i o n o f in 1968 t h a t federal or sta te the e x te n t to which s u b s i d i e s wer e u n i f o r m l y a l l o c a t e d among p u b l i c t r e a t m e n t f a c i l i t i e s s e r v i n g v a r i o u s s i z e s o f com mu nities f o r t h c o m in g r e v i e w o f T a b l e 17 is in e v e r y w a t e r s h e d r e g i o n . in e f f e c t , th erefo re, The an e x a m i n a t i o n ^Only one f e d e r a l program, t h e one a d m i n i s t e r e d by t h e Housing and Home F in a n c e Agency, does n o t s u b s i d i z e t h e c o n s t r u c t i o n o f t r e a t ­ ment w o rk s . T h i s program o n l y s u p p o r t s t h e c o n s t r u c t i o n o f c o l l e c t i o n sewers. In a d d i t i o n , p a r t o f t h e g r a n t s from t h e H i c h i g a n bond program a l s o o n l y a p p l y to c o l l e c t i o n sewer systems. 2 Some g r a n t s o r loan s which had been a u t h o r i z e d f o r a l l o c a t i o n under c e r t a i n programs had n o t y e t been r e c e i v e d and spent by l o c a l com m uni ti es. M a n u f a c t u r i n g p l a n t s which s e n t t h e i r d i s c h a r g e s to some m u n i c i p a l systems p r i o r t o September o f 1 9 6 9 , t h e r e f o r e , m ig h t n o t have y e t r e c e i v e d f i n a n c i a l b e n e f i t s from s u b s i d i e s which were a u t h o r i z e d but not y e t a l l o c a t e d and expended. o f th e g e n e r a l d e g r e e to which an assumption s e t f o r t h does not ho ld t r u e in a c t u a l i t y . The f i r s t In Appendix G p a r t o f a t w o - p a r t assump­ t i o n m a i n t a i n s t h a t e v e r y m u n i c i p a l w a s t e w a t e r t r e a t m e n t system in M ich ig an which t o o k s u b s i d i z e d from a t In i n d u s t r i a l w a s t e w a t e r s in 1968 had been l e a s t one o f t h e f e d e r a l o r M ic h ig a n programs which h e l p pay t h e c o s t s o f b u i l d i n g t r e a t m e n t w o rk s . As mentioned above, T a b l e 17 a l l o w s a check to be made on th e v a l i d i t y o f t h i s a ssu mp tio n. Furthermore, this t a b l e a l l o w s some g e n e r a l s t a t e m e n t s to be made abo ut th e d i r e c t i o n o f e r r o r s which may be p r e s e n t foregoing in te rp re ta tio n o f patterns effects. In o t h e r wo rd s, the d a ta i n d i c a t i o n about wheth er t h e s e in t h e in c lu d e d in th e incidence o f b e n e f ic i a l In T a b l e in terp retatio n s 17 g i v e some have o v e r e s t i m a t e d o r underestimated the p ro p o rtio n s o f manufacturing p la n ts in c e r t a i n impact subgroups which had been a b l e t o g a i n b e n e f i t s from s t u d i e d subsid y programs. S t r u c t u r e o f T a b l e 17 The two pages o f T a b l e 17 a r e h o r i z o n t a l l y d i v i d e d sections. Each s e c t i o n r e p o r t s t h e same k in d s o f d a t a abo ut e i t h e r a s i n g l e water she d region o r the e n t i r e s e c t i o n g i v e s th e t o t a l t h a t were o p e r a t e d latio n in to e ig h t The upper row in each number o f p u b l i c w a s t e w a t e r t r e a t m e n t p l a n t s in 1968 by m u n i c i p a l i t i e s w i t h i n w i t h i n seven popu­ size c a teg o rie s . The re m a in in g f o u r rows w i t h i n each h o r i z o n t a l subdivision o f the t a b le re p o rt t h a t had r e c e i v e d state. th e number o f th e s e t r e a t m e n t works s u b s i d i e s p r i o r t o September o f 1969. These s u b s i d i e s TABLE 17.--T o ta l number o f m u n ic ip a litie s w ith waste treatment f a c i l i t i e s in 1968 th a t had received a federal grant o r loan and/or a grant from the f i r s t two rounds o f the s ta te bond program, by watershed region and by p o p u la tio n 's iz e c l a s s i f i c a t i o n o f m u n i c ip a l i t ie s . 3 ---—-a—■—^ ^ -_ . * — g g Si L a ^ ------ H Pop. Size C l a s s i f i c a tio n o f M u n i c i p a l i t i e s o Information by Watershed Region • cn CT\ 0 -u * CTl o\ in CM 0 13 6 0 0 6 2 1 0 0 1 1 1 0 0 1 12 8 0 1 9 2 1 0 0 1 23 7 0 0 7 225 98 7 8 113 g ^Refer to the t e x t f o r references to sources and methods. Size c l a s s i f i c a t i o n s in 1,000s o f persons. 0 m 9 0 0 9 188 co ul d have been from f e d e r a l gram a l o n e , programs a l o n e , o r from both f e d e r a l from M i c h i g a n ' s bond p r o ­ and s t a t e p r o g r a m s . ' C o n c lu s i o n s Drawn From T a b l e T a b l e 17 r e v e a l s 17 th a t the c o n s tru c tio n o f only w a s t e w a t e r t r e a t m e n t works o p e r a t e d in M i c h i g a n s i d i z e d w i t h funds r e c e i v e d from a t l e a s t one o f programs. At f i r s t glance, 267 works had r e c e i v e d the fa c t 1k k o f t h e 267 in 1968 had been sub­ the studied s u b s id y t h a t o n l y 5** p e r c e n t o f t h e s e s u b s i d i e s m ig h t be i n t e r p r e t e d as an in dication t h a t a g r e a t number o f m a n u f a c t u r i n g e s t a b l i s h m e n t s s e n t t h e i r w a s t e ­ w a t e r s t o p u b l i c works w i t h o u t r e c e i v i n g any f i n a n c i a l the s u b s id y programs. q u ic k in terp retatio n beneficial turing effects It that would l o g i c a l l y the fo re g o in g p l a n t s which had g a in e d b e n e f i t s i n t e r p r e t a t i o n and c o n c l u s i o n , fact how eve r, t h a t o n l y 5** p e r c e n t o f M i c h i g a n ' s been s u b s i d i z e d . Rather, from t h e prog rams. shown t h a t m u n i c i p a l e ra lly received small Such an should n o t be drawn from th e public t r e a t m e n t works had 17 should t a k e in to had o r had n o t been s u b s i d i z e d . S i z e should be a p r i m a r y c o n s i d e r a t i o n because in t h i s c h a p t e r and as documented incidence o f t h e p r o p o r t i o n s o f manuf ac ­ the e v a l u a t io n o f Table account t h e s i z e o f works w h ic h e i t h e r from be con clu de d from such a review o f the has g r e a t l y o v e r s t a t e d b e n e fit in C h a p t e r works which s e r v e l e s s (as me ntioned e a r l i e r 111) than volumes o f w a s t e w a t e r s from federal s t u d i e s have 1 0 , 0 0 0 persons have g e n ­ in d u s tria l sources. *A11 o f t h e te n t r e a t m e n t works i n d i c a t e d by T a b l e 17 as ha v in g r e c e i v e d o n l y s t a t e g r a n t s p r i o r t o September o f 1969 had been a u t h o r i z e d g r a n t s in t h e second round o f th e a l l o c a t i o n p r o c e s s . Michigan o f f i c i a l s e x p e c t e d , however, t h a t f e d e r a l g r a n t s would be f o r t h c o m i n g in subsequent y e a r s t o pay th e promised f e d e r a l s h a r e o f t h e c o s t s o f th e s e w o r k s . 18? The f o l l o w i n g c o n c l u s i o n s from T a b l e 17 a r e consideration is p a id to t h e s i z e o f p u b l i c works which e i t h e r had o r had no t r e c e i v e d s u b s i d i e s . discussed in o r d e r when due Because o f assumptions and l i m i t a t i o n s in Appendix G, c e r t a i n complements to th e p e r c e n t a g e f i g u r e s o f T a b l e s 3 thr ough 5 have led t o o v e r e s t i m a t e s o f t h e p r o ­ p o r t i o n s o f m a n u f a c t u r i n g e s t a b l i s h m e n t s w i t h i n some impact subgroups which had local i n d i r e c t l y b e n e f i t e d from s u b s i d i e s a l l o c a t e d d i r e c t l y u n i t s o f government. But to i t must be concluded t h a t t h e e x t e n t o f t h e s e a c t u a l o v e r e s t i m a t e s has not been n e a r l y as s e ve re as the extent o f overestim ation referred to. T h is s t u d y d i d not c o l l e c t needed to p r e c i s e l y has been made. i n d i c a t e which estim ation, i n d i c a t e d by th e h u r r i e d c o n c l u s i o n j u s t th e kind o f information i d e n t i f y t h e de gre e o f a c t u a l o v e r e s t i m a t i o n A vailable inform ation is s u f f i c i e n t , however, that to impact subgroups have been most a f f e c t e d by t h i s o v e r ­ The f o r th c o m in g synopsis o f Ta b l e 1 shows t h a t impact subgroups p r i m a r i l y c o n s i s t o f (l) th e s m a l l e r employment- s iz e c a te g o rie s o f manufacturing p la n ts w it h in a l l r e g i o n s , and ( 2 ) thes e seven watershed bo th t h e s m a l l e r and l a r g e r s i z e c a t e g o r i e s o f p l a n t s wi t h i n Reg ion I I A . I n f o r m a t i o n g i v e n by T a b l e 17 a t m a ri ze d as f o l l o w s . total of th e s t a t e P r i o r t o September o f level 1969, c o n s t r u c t i o n o f a 123 p u b l i c w a t e r p o l l u t i o n c o n t r o l fa c ilitie s not been supported by any f e d e r a l o r s t a t e s u b s i d i e s . not be o v e r l o o k e d , communities o f however, t h a t can be sum­ in Michi gan had The f a c t must 112 o f th e s e 123 f a c i l i t i e s le s s than 1 0 , 0 0 0 per son s. served Thus, s u b s i d i e s had not been r e c e i v e d by 11 o f th e p u b l i c t r e a t m e n t works which served towns and c i t i e s w ith populations o f a t f a c t to note least is t h a t 9 o f th e s e I I m u n icip a litie s w ithin 10,000 persons. Another im p o r t a n t works r e c e i v e d w a s t e w a t e r s from th e 1 0 , 0 0 0 to 2 4 , 9 9 9 p o p u l a t i o n s i z e c a t e g o r y , w h i l e t h e 2 rem ain in g works served m u n i c i p a l i t i e s w i t h i n the 25,000 t o 4 9 , 9 9 9 ra ng e . A closer d a t a used in state-level lo ok a t T a b l e 17 and an e x a m i n a t i o n o f u n r e p o r t e d raw i t s c o m p i l a t i o n p r o v i d e some r e g i o n a l dim e ns io ns to t h e fig u res. It is n o t e w o r t h y t h a t e v e r y wa te rs h ed r e g i o n included some t r e a t m e n t works which had not been s u b s i d i z e d and which served towns w i t h le s s than 1 0 ,0 0 0 p e r s on s . works o f t h i s pe r c e n t R egi on al s i z e which had n o t r e c e i v e d s u b s i d i e s in Region V t o 75 p e r c e n t l a r g e r towns and c i t i e s , the lis t In Region IV. ranged from 30 W i t h r e s p e c t t o the below i d e n t i f i e s t r e a t m e n t works t h a t had not r e c e i v e d e i t h e r proportions of those served by federal or s ta te assistance. P o p u l a t i o n S i z e C l a s s i f i c a t i o n s and M u n i c i p a l i t i e s Which Had Not Received S u b s i d i e s P r i o r t o September, 1969 Region I IIA 10,000 to 24,999 Communities a lo n g Lake S t , C i a i r served by works o p e r a t e d by t h e Huron-Clinton Metro. A u th o r ity Albion Grand Haven Hoi 1and N i 1es Owosso M IA Saginaw Township IIIB A1pena IV Menom inee 2 5 ,000 to 49,999 Mount Clemens East Lansing 191 T h re e b a s i c c o n c l u s i o n s can be drawn from t h e s t a t e and regional i n f o r m a t i o n summarized a bo v e . repeating, figures pertain These c o n c l u s i o n s , to the degree t h a t c e r t a i n i t b ea rs complements t o p e r c e n t a g e r e p o r t e d by T a b l e s 3 th r o u g h 5 have le d t o o v e r e s t i m a t e s prop ortions o f manufacturing p la n ts had ga in ed b e n e f i t s in v a r i o u s impact subgroups wh ich from s t u d i e d s u b s id y programs. The f i r s t c o n c l u s i o n is as f o l l o w s : some l i m i t e d amount o f o v e r e s t i m a t i o n Th er e has p r o b a b l y been in t h e a f o r e s t a t e d p r o p o r t i o n s o f m a n u f a c t u r i n g p l a n t s which had b e n e f i t e d from s u b s i d i e s w i t h i n s m a l l e r e m p l o y m e n t - s i z e c a t e g o r i e s o f mo st, region s. The f o l l o w i n g Every wa te rs h ed region served communities o f subsidized. At l i n e o f r e a s o n in g if l e s s than plants. M a n u f a c t u r i n g us er s o f w a t e r sh ed t r e a t m e n t works which 1 0 , 0 0 0 persons and w h ic h had no t been l e a s t a p o r t i o n o f t h e s e small received no t a l l , the l e a d s up t o t h i s c o n c l u s i o n . in cl u d e d some m u n i c i p a l no doubt works in many r e g i o n s l i m i t e d volumes o f w a s t e w a t e r s from m a n u f a c t u r i n g gained any b e n e f i t s w ith r e l a t i v e l y in t h e th e s e smal 1-t ow n works would not have from s u b s i d i e s . Only those m a n u f a c t u r i n g p l a n t s low volumes o f w a s t e w a t e r s , how eve r, can g e n e r a l l y send t h e i r d i s c h a r g e s t o sm al1-town w o r k s , and it Is reasonable to e x p e c t t h a t m a n u f a c t u r i n g p l a n t s wh ich employ t h e f e w e r persons e m it t h e l e s s e r volumes o f w a s t e w a t e r s . Consequently, p r i m a r i l y those e s t a b l i s h m e n t s w i t h i n categ ories, i.e , it follow s that th e two s m a l l e s t e m p l o y m e n t - s i z e those which employ no more than 99 p e r s o n s , would have made t h e most use o f those smal1-town systems wh ich had not r e c e i v e d any s u b s i d i e s . 192 The second c o n c l u s i o n extends upon t h e f i r s t by me ntio nin g o v e r e s t i m a t e s t h a t have been made w i t h r e sp ec t to l a r g e r as w e l l s m alle r manufacturing p la n ts o f c e r t a i n s io n regions. Th is second c o n c lu ­ is a l s o based upon a l i n e o f re asoning s i m i l a r given. The l o g i c a l to the one j u s t sequence le a d i n g up t o t h i s c o n c l u s i o n , s t a r t s w ith the fa c t that Each o f these works took in do m e s tic w a s t e w a t e r s from m u n i c i p a l i t i e s po pulated w i t h a t nical however, t h e 11 p u b l i c t r e a t m e n t works l i s t e d on a p r e v i o u s page had not been s u b s i d i z e d . 1 0 , 0 0 0 pe r s o n s . as least Many o f them, t h e r e f o r e , pr ob ab ly have had the t e c h ­ c a p a b i l i t y and t h e p h y s ic a l c a p a c i t y to t a k e in amenable d i s c h a r g e s from m a n u f a c t u r i n g p l a n t s w i t h i n both the s m a l l e r and the l a r g e r e m p lo y m e n t - s iz e c a t e g o r i e s . The second c o n c l u s i o n , then, holds t h a t some l i m i t e d amount o f o v e r e s t i m a t i o n has a l s o been made w i t h r e s p e c t t o t h e p r o p o r t i o n s o f m an u fa c t u r in g p l a n t s which had b e n e f i t e d from s u b s i d i e s and which were lo c a t e d and p a r t i c u l a r l y NA. in Regions I , IIIA , IIIB , T h i s c o n c lu s io n s i n g l e s out Region I I A IV, in p a r t i c u l a r because 5 o f th e 9 un sub sid iz ed p u b l i c works which served communities in the 1 0 , 0 0 0 t o 2 ^ , 9 9 9 range were l o c a t e d t h e r e i n . * A t h i r d c o n c l u s i o n t o be drawn from T a b l e 17 c a l l s a t t e n t i o n to p u b l i c t r e a t m e n t works and m an u f a c t u r in g e s t a b l i s h m e n t s lo c a t e d w i t h i n * E a s t Lansing Is the s i t e o f 1 i t t l e m a n u f a c t u r in g a c t i v i t y . T h e r e f o r e , t h e f a c t t h a t th e East Lansing t r e a t m e n t works had not been s u b s i d i z e d p r i o r t o September o f 1969 di d not i n f l u e n c e the degree o f emphasis p la c e d upon Region I I A in t h i s c o n c l u s i o n . As a r e s u l t o f e x p l o r a t o r y r e s e a r c h , however, th e a u t h o r knew t h a t a l l but one o f the o t h e r m u n i c i p a l i t i e s named on a p r e v io u s page might have r e c e iv e d d i s c h a r g e s i n t o t h e i r t r e a t m e n t works from m a n uf a c t ur in g p l a n t s t h a t were l o c a t e d w i t h i n o r near t h e i r b o r d e r s . The e x c e p t i o n to t h i s s t a t e ­ ment is r e p r e s e n t e d by the. t r e a t m e n t f a c i l i t y o p er a t e d in Region I near Lake S t . C l a i r by t h e H ur on- C1 in ton M e t r o p o l i t a n A u t h o r i t y . 193 the m e tr o p o lit a n c o u n tie s r e f e r r e d central dized c i t i e s w ithin to in t h i s study. t r e a t m e n t works . the s e c o u n t i e s . ^ t h e range o f of t h e 10 t h e s e m e t r o p o l i t a n c o u n t i e s were served by s u b s i ­ Furthermore, a l l works had been s u b s i d i z e d which served o t h e r c i t i e s w i t h p o p u l a t i o n s o f a t w ithin A ll l e a s t 5 0 , 0 0 0 persons F u r t h e r m o r e , among t h e m u n i c i p a l i t i e s w i t h i n 1 0 , 0 0 0 t o 4 9 , 9 9 9 persons t h a t a r e located in m e t r o p o l i t a n c o u n t i e s , o n l y f o u r o p e r a t e d t r e a t m e n t works which had gone w i t h o u t subsidies. 2 From t h e s e f a c t s ment f a c i l i t i e s it which have taken is obvi ous t h a t Not q u i t e so o b v i o u s , ment. These same l a r g e received subsidies p r i o r bu t e q u a l l y t r u e , treatment f a c i l i t i e s f i c a t i o n s o f those m a n u f a c t u r i n g p l a n t s sewers. 3 to September o f is t h e f o l l o w i n g state ­ in m e t r o p o l i t a n c o u n t i e s t h e w a s t e w a t e r s from a m a j o r i t y o f a l l w a s t e w a t e r s to p u b l i c u t i l i t y treat­ in w a s t e w a t e r s from th e g r e a t m a j o r i t y o f M i c h i g a n ' s p o p u l a t i o n had r e c e i v e d 19 69. those p u b l i c s i z e s and many c l a s s i ­ in M ic h ig a n which sent t h e i r The t h i r d c o n c l u s i o n f o l l o w s These c i t i e s o u t s i d e o f c e n t r a l c i t i e s which o p e r a t e t h e i r own t r e a t m e n t works i n c l u d e P o n t i a c and Warren in t h e D e t r o i t a r e a and Wyoming in th e Grand Rapids a r e a . C o l l e c t i o n sewers from t h e D e t r o i t t r e a t m e n t f a c i l i t i e s a l s o reached ou t t o s e rv e 11 i n c o r p o r a t e d c i t i e s w i t h p o p u l a t i o n s o f a t l e a s t 5 0 , 0 0 0 pe r s o n s . T h is i n f o r m a t i o n , as w e l l as t h a t in the f o l l o w i n g f o o t n o t e , comes from u n r e p o r t e d d a t a used in th e p r e p a r a t i o n o f T a b l e 17. 2 These m u n i c i p a l i t i e s i n c l u d e East L a n s i n g , Mount Clemens, Saginaw Township, and communities a lo n g Lake S t . C l a i r . Many o t h e r m u n i c i p a l i t i e s o f t h i s s i z e , p a r t i c u l a r l y in t h e v i c i n i t y o f D e t r o i t , were served by t r e a t m e n t works o p e r a t e d by th e c e n t r a l c i t i e s o f m e t r o p o l i t a n c o u n t i e s . For i n s t a n c e , 14 i n c o r p o r a t e d p l a c e s In t h e 2 5 , 0 0 0 t o 4 9 , 9 9 9 range were served by th e D e t r o i t system, 3 T h i s s t a t e m e n t is made w i t h r e f e r e n c e to background i n f o r m a t i o n g i v e n in un p u b l is h e d m a n u s c r i p t s and t o the u n r e p o r t e d d a t a on numbers, s i z e s , and l o c a t i o n s o f e s t a b l i s h m e n t s which went i n t o t h e c o m p i l a t i o n o f T a b l e s 3 th r o u g h 5 . A more e x a c t i n g s t a t e m e n t canno t be made because not a l l m a n u f a c t u r i n g p l a n t s in m e t r o p o l i t a n c o u n t i e s which u t i l i z e d pub­ l i c f a c i l i t i e s sent t h e i r d i s c h a r g e s t o t h e s p e c i f i c l a r g e f a c i l i t i e s now bein g r e f e r r e d t o . 19^ from t h e s e s t a t e m e n t s . I t m aintains t h a t , as indicated, t h e two p r e v io u s c o n c l u s i o n s do Indeed a p p l y o n l y to o v e r e s t i m a t e s which a r e q u ite lim ited in m a g n i t u d e . Such o v e r e s t i m a t e s c e r t a i n l y do not appear g r e a t enough t o w a r r a n t any r e v i s i o n o f g e n e r a l incidence o f b e n e f ic i a l effects patterns from s u b s i d i e s which have been c a te d by T a b l e s 3 t hr oug h 5 and summarized e a r l i e r in t h e in d i­ in t h i s c h a p t e r . CHAPTER IX THE ACTUAL INCIDENCE OF BENEFICIAL EFFECTS FROM MICHIGAN'S TAX EXEMPTION PROGRAM In troductIon In J u l y o f 1965* t h e M ic h ig a n l e g i s l a t u r e approved a program which a l l o w s both e x i s t i n g and newly c o n s t r u c t e d p r i v a t e w a t e r p o l l u tion control fa c ilitie s t o be exempted from per sonal In a d d i t i o n , newly b u i l t f a c i l i t i e s In o p e r a t i o n and f a c i l i t i e s prop erty taxes. which have n o t been l o n g e r than f o u r y e a r s can be exempted from e i t h e r s a l e s o r use t a x e s . During th e conduct o f e x p l o r a t o r y r e s e a r c h , hypotheses were f o r m u l a t e d about t h e d i s t r i b u t i o n o f b e n e f i t s from M i c h i g a n ' s ta x exemption program among c e r t a i n are r e fe r r e d stated, to impact subgroups. In t h e P r e f a c e and in Chapters t h e y m a i n t a i n t h a t p r i o r t o September, III These hypotheses and I V . 1969, B rie fly th e b e n e f i t s from s tu di ed t a x exemptions had p r i m a r i l y been r e c e i v e d by r e l a t i v e l y m a n u f a c tu r in g p l a n t s o p e r a t e d by w e l l plants established large f i r m s and by lo c a t e d w i t h i n m e t r o p o l i t a n c o u n t i e s . Objective 3 r e f l e c t s which a r e a b l e t o th e s e hypo the ses . I d e n t i f y which Stand ard I t c a l l s f o r methods In d u strial C la s sific a tio n s , e m p lo y m e nt -s iz e c a t e g o r i e s , and l o c a t i o n s o f m a n u f a c t u r in g p l a n t s Michigan have r e c e i v e d t h e g r e a t e r b e n e f i c i a l 195 in e f f e c t s o f t a x exemptions 196 from t h e s t a t e ' s p r o g r a m . ' have been summarized Methods designed t o a t t a i n in C h a p t e r VI this ob jective and a r e e x p l a i n e d more c o m p l e t e l y in Appendix E. Tax Exemptions E i t h e r Received o r Pending I n f o r m a t i o n about th e response o f m a n u f a c t u r i n g f i r m s and p l a n t s t o M i c h i g a n ' s t a x exemption program was c o l l e c t e d from reco rds and f i l e s o f persons on t h e s t a f f o f t h e M ich ig an Wa ter Resources Com­ m is s io n and t h e s t a f f o f th e S t a t e Tax Commission. C e rtific a te s of exemption had been issued o r were pending facturing plan ts. Each o f the s e p l a n t s had a p p l i e d f o r an exemption f o r f a c i l i t i e s which t r e a t e d discharge in d u strial issue to a t o t a l w a s t e w a t e r s p r i o r to t h e i r I n t o e i t h e r p u b l i c w a t e r s on p u b l i c u t i l i t y C e r t i f i c a t e s o f exemption had been gave s e l f - t r e a t m e n t public w aters. to wa s t e w a te rs p r i o r o f 79 manu­ sewers. issued t o 50 p l a n t s which t o t h e i r d i r e c t e m iss io n in to Anoth er 7 p l a n t s which d is c h a r g e d w a s t e w a t e r s d i r e c t l y i n t o p u b l i c w a t e r s had a p p l i e d for, but had n o t y e t r e c e i v e d , a c e r t i f i c a t e o f exemption on t h e i r w a s t e w a t e r t r e a t m e n t f a c i l i t i e s . Some 22 o t h e r p l a n t s e i t h e r had r e c e i v e d exemptions o r had a p p l i e d f o r exemptions t h a t were s t i l l wa s te wa te rs p r i o r these 22 p l a n t s , pending on works used t o p r e t r e a t to t h e i r bein g sent to p u b l i c u t i l i t y sewers. Of 19 had a c t u a l l y been issued a c e r t i f i c a t e o f exemption and 3 had s u b m it t e d r e q u e s t s which were s t i l l bei n g re viewed by p e r ­ sonnel o f t h e S t a t e Tax Commission and t h e Water Resources Commission. 'fh e objective is s t a t e d in t h e P r e f a c e . 197 A P r e v i e w o f t h e Scope o f S t a t i s t i c a l and N o n s t a t i s t t e a 1 An aly s es Some o f t h e d a t a r e p o r t e d ted into four chi-squ are t e s ts . in t h e p r e c e d i n g s e c t i o n is incorpora­ These t e s t s have been conducted to d e t e r m i n e w h et h er any s t a t i s t i c a l l y s ig n ific a n t differences e x is t between t h e p r o p o r t i o n s o f m a n u f a c t u r i n g p l a n t s w i t h i n c e r t a i n broad Impact subgroups which had a c t u a l l y September* 1969- received These t e s t s o n l y p e r t a i n into public w aters. p l a n t s had been coming c h i - s q u a r e t e s t s N o n statistical tio n o f selected data w ithin As mentioned a b o v e , some 50 such in cl ud e d w i t h i n d i r e c t l y - c o n t r o l l e d discharges chi-square t e s ts . t h e i r wastewaters p r i o r issued a c e r t i f i c a t e o f exemption by September, These 50 p l a n t s a r e to to d a t a about t h e r e c e i p t o f exemptions by those p l a n t s which s e l f - t r e a t e d to d i s c h a r g e t a x exempti ons p r i o r 1969- t h e **38 p l a n t s which e m i t t e d in 1968. The p o p u l a t i o n f o r t h e f o r t h ­ is comprised by th e s e 438 p l a n t s . * analyses in t h i s chapter I n c l u d e t h e examina­ in o r d e r t o supplement th e r e s u l t s o f the f o u r C e r t a i n o f the s e d a t a a l s o p e r t a i n t h e a f o r e m e n t i o n e d p o p u l a t i o n o f 438 p l a n t s . to e s t a b l i s h m e n t s Ot h er d a t a no t These 438 p l a n t s a r e named on t h e i n d u s t r i a l w a s t e w a t e r con­ t r o l s t a t u s l i s t p r e pa r ed f o r 1968 by t h e s t a f f o f t h e M ic h i g a n Water Resources Commission. T h i s l i s t Is r e f e r r e d to in Appendix E and in p r e v io u s c h a p t e r s . The o b s e r v a n t r e a d e r w i l l no te t h a t t h e p o p u l a t i o n o f 1*38 p l a n t s is ta ken from a l i s t o f I n d u s t r i a l e s t a b l i s h m e n t s p r e p a r e d in 1968 whereas t h e observed f r e q u e n c i e s o f p l a n t s which e i t h e r had o r had not r e c e i v e d an exemption a p p l y to t h o s e p l a n t s which had r e c e i v e d exemptions on thr ough t o September, 1969. T h i s d i f f e r e n c e coul d have an e f f e c t on t h e v a l u e o f c h i - s q u a r e s t a t i s t i c s computed from d a t a included in fo r t h c o m in g t a b l e s . But a l l p l a n t s which had r e c e i v e d an exemption a p p l i c a b l e t o f a c i l i t i e s t h a t t r e a t w a s t e w a t e r s p r i o r t o d i s c h a r g e i n t o p u b l i c w a t e r s were named on t h e s t a t u s l i s t f o r 1 9 6 8 . A l l o f t h e 50 p l a n t s w h ic h. h ad r e c e i v e d an exemption f o r such f a c t l i t i e s , t h e r e f o r e , were a c t u a l l y in cl u d e d w i t h i n th e p o p u l a t i o n o f 438 p l a n t s . 198 in clu ded those in any s t a t i s t i c a l included w i t h i n a n a ly s is , however, the po pu la tio n o f 438. re la te to p l a n t s b e s i d e s These o t h e r d a t a a p p l y t o m a n u f a c t u r i n g p l a n t s which had s u b m it t e d a p p l i c a t i o n s f o r a n d , cases, r e c e i v e d exem ptio ns on f a c i l i t i e s p r i o r t o e m is s i o n into p u b lic u t i l i t y In most which p r e t r e a t e d w a s t e w a t e r s sewers. Chi-Square Tests This section tests. r e v i e w s t h e s t r u c t u r e and r e s u l t s o f c h i - s q u a r e C o n ti n ge nc y t a b l e s a r e g i v e n by T a b l e s pr oc e e di n g d i r e c t l y is d i r e c t e d 19 th ro ug h 2 2 . to a d isc us s io n o f these t a b l e s , Before how eve r, a t t e n t i o n t o some d e t a i l e d d a t a abo ut t h e 50 p l a n t s which had been issued an exemption a p p l i c a b l e p r io r to discharge to f a c i l i t i e s used t o t r e a t w a s t e w a t e r s into pu blic waters. T a b l e 18 r e p o r t s t h e number o f t h e s e 50 p l a n t s w h ic h were in clu ded w i t h i n v a r i o u s impact subgroups. in d u s tria l, e m p l o y m e n t - s i z e , and r e g i o n a l The observed f r e q u e n c i e s w i t h i n each c h i - s q u a r e t e s t have been o b t a i n e d by r e f e r r i n g Table to a p p r o p r ia t e c e l l s w i t h i n 18. 18, t h e Upon e x a m i n a t i o n o f t h e p a t t e r n o f f r e q u e n c i e s shown by T a b l e a u t h o r d e c id e d t h a t t h e purpose o f a ttain in g no t r e q u i r e any c h i - s q u a r e contingency ta b le s . tests larger than t h o s e g i v e n by 2 x 2 Consequently, Tables a 2 x 2 contingency t a b l e . The two impact each o f th e f o u r t e s t s a r e id en tifie d tables. O b je c tiv e 3 did 19 th ro ug h 22 each s e t f o r t h subgroups in c l u d e d w i t h i n in th e column he adings o f those i TABLE 1 8 .--Number o f e s ta b lis h m e n ts on commission s ta tu s l i s t f o r 1968 th a t had re c e iv e d a ta x exem ption c e r t i f i c a t e p r i o r to September o f 1969, by em plo ym en t-size c l a s s i f i c a t i o n s and i n d u s t r ia l and re g io n a l subgroups. SIC In d u s try No. o f E sta h . issued a C e r tif ic a te Employm ent-Size C la s s i f ic a t i o n s 3 2099 20 Food 26 Paper 4 12 1 0 100249 1 2 250 Plus 2 10 U atersh ed Regions 1 11A 0 1 1 7 1 IB 111A, 11 IB 1 1 2 0 0 I Groups o f Regions Groups o f C o u n ties IV V Southern 3 Regions 0 0 3 1 1 3 2 0 8 4 4 8 N o rth e rn 4 Regions H e tro . C o u n ties Nonmetro. C o u nties 28 Chem icals 7 1 1 5 3 3 0 0 1 0 0 6 ■1 5 2 29 Petroleum** 1 1 0 0 1 0 0 0 0 0 0 1 0 1 0 24 3 4 17 5 11 2 2 2 2 0 18 6 11 13 33__ P rim a ry m e tals 8 0 0 8 8 0 0 0 0 0 0 8 0 8 0 34 2 0 0 2 0 1 0 1 0 0 0 2 0 t 1 1 0 0 1 0 1 Q 0 0 0 0 1 0 I 0 14 0 I 13 9 1 0 4 0 0 0 14 0 14 0 1 0 0 1 0 1 0 0 0 0 0 1 0 1 0 W a te r-u s in g d u ra b le s 26 0 1 25 17 4 0 5 0 0 0 26 0 25 1 T o ta l H ic h ig a n 50 3 5 42 22 15 2 7 2 2 0 44 6 36 14 W a te r-u s in g nondurables F a b ric a te d m e tals 35__ N o n -e te c . m achinery 37__ T ra n s p o rt, e q u ip . 39 M is c . m a n u fac tu rers aNo e s ta b lis h m e n ts w hich employed from 1 to 19 persons had re c e iv e d a c e r t i f i c a t e . e r ie s . **The s in g le e s ta b lis h m e n t w it h in t h is in d u s try w hich had re c e iv e d a c e r t i f i c a t e was not one o f M ic h ig a n 's p etro leu m r e f i n ­ R a th e r, i t was a m a n u fa c tu re r o f r e la te d p etro leu m or co al p ro d u c ts . 200 TABLE 1 9 . — T w o- by -t w o c o n t i n g e n c y t a b l e f o r c h i - s q u a r e t e s t o f n u l l h y p o t h e s i s t h a t no d i f f e r e n c e in t h e r e c e i p t o f t a x exemp­ t i o n s e x i s t s between t h e number o f e s t a b l i s h m e n t s t h a t employed g r e a t e r than 2 5 0 persons and th e number t h a t employed 250 persons or l e s s , 3 250 £ Less 250 Plus Total Observed number 8 Expected number (30.5) (19.5) (50) Observed number 259 129 388 50 Did r e c e i v e an exemption Did n o t r e c e i v e an exemption Expected number Total Observed and expected (236.5) 267 (151 . 5 ) 171 ( 3 8 8) 438 a C on sid ers o n l y t a x exemptions r e c e i v e d p r i o r t o September, by e s t a b l i s h m e n t s w i t h d i r e c t l y - c o n t r o l l e d d i s c h a r g e s . Notes: Using Y a t e s ' x2 - 1969, correctio n for c o n tin u ity , *7.70. 2 W i t h a x o f ^ 7 * 7 0 , t h e n u l l h y p o t h e s i s is r e j e c t e d a t th e .001 s i g n i f i c a n c e l e v e l . The c o n c l u s i o n i s , t h e r e f o r e , reached t h a t a s t a t i s t i c a l l y s i g n i f i c a n t d i f f e r e n c e does e x i s t In th e r e c e i p t o f tax exemptions between e s t a b l i s h m e n t s t h a t employ g r e a t e r than 250 persons and t h o s e t h a t employ 250 and l e s s per sons. Sou rce: Y a t e s ' c o r r e c t i o n f o r c o n t i n u i t y (used in t h i s and in th e f o l ­ lowing t h r e e c h i - s q u a r e t e s t s ) I s a p p l i e d when any one o f the e x pec te d f r e q u e n c i e s Is s m a l l . Some a l s o use Y a t e s ' c o r r e c t i o n when o n l y one de gr ee o f freedom is In e f f e c t as in a t w o -b y - t w o contingency t a b l e . R e f e r t o N. M. Downie-and R. W. H e a t h , Basic S t a t i s t i c a l M e tho ds, 2d e d . (New Yo rk : Ha rp e r £ Row, 1 9 6 5 ) t PP* 166 and 167 . 201 TABLE 2 0 . — Tw o-by-two c o n t i n g e n c y t a b l e f o r c h i - s q u a r e t e s t o f n u l l h y p o t h e s i s t h a t no d i f f e r e n c e In t h e r e c e i p t o f tax exemp­ t i o n s e x i s t s between t h e number o f e s t a b l i s h m e n t s l o c a t e d in m e t r o p o l i t a n c o u n t i e s and th e number l o c a t e d in nonmetro­ po litan co u n ties.3 Observed number Metro. Counties Nonmetro. Counties 36 14 Total 50 Did r e c e i v e an exemption Expected number (19.7) (30.2) (50 ) Observed number 137 251 388 Did not r e c e i v e an exemption Expected number Total g Observed and expe cted (153-3) 173 (234.8) 265 (388) 438 Cons ider s o n l y t a x exem ptio ns r e c e i v e d p r i o r t o September, by e s t a b l i s h m e n t s w i t h d i r e c t l y - c o n t r o l l e d d i s c h a r g e s . Notes: 1969, 2 2 Using Y a t e s 1 c o r r e c t i o n f o r c o n t i n u i t y , x ” 2 4 . 7 9 . W ith a x o f 2 4 . 7 9 , t h e n u l l h y p o t h e s i s is r e j e c t e d a t th e .001 s i g n i f i ­ cance l e v e l . The c o n c l u s i o n is r e a c h e d , t h e r e f o r e , t h a t a s t a t i s t i c a l l y s i g n i f i c a n t d i f f e r e n c e does e x i s t in th e r e c e i p t o f t a x exemptions between e s t a b l i s h m e n t s l o c a t e d in t h e m e t r o ­ p o l i t a n c o u n t i e s r e f e r r e d to h e r e i n and those l o c a t e d in the nonm etropolitan counties r e fe r r e d to h e r e in . 202 TABLE 2 1 . — T w o - b y - t w o c o n t i n g e n c y t a b l e f o r c h i - s q u a r e t e s t o f n u l l h y p o t h e s i s t h a t no d i f f e r e n c e in t h e r e c e i p t o f t a x exemp­ t i o n s e x i s t s between t h e number o f e s t a b l i s h m e n t s l o c a t e d in t h e n o r t h e r n f o u r w a t e r s h e d r e g i o n s and t h e number l o c a t e d in t h e s o u th e r n t h r e e w a t e r s h e d r e g i o n s . 3 Sou the rn Reg ions Observed number Northern Reg ions 44 Tota 1 6 I 50 Did r e c e i v e an ex em pt io n Expe cted number (39.6) Observed number 303 (10.4) (50) 388 85 Did n o t r e c e i v e an exem pti on Expected number Tota 1 Observed and e x pe ct e d 347 Notes: 438 91 ... 1969, ( 388 ) (80.6) (307.4) _ . a C on s td e r s o n l y t a x e x em pt io ns r e c e i v e d p r i o r t o Se pte m ber , by e s t a b l i s h m e n t s w i t h d i r e c t l y c o n t r o l l e d d i s c h a r g e s . 2 2 Using Y a t e s ' c o r r e c t i o n f o r c o n t i n u i t y , x “ 2 . 9 6 * With a x o f 2 . 96 , t h e n u l l h y p o t h e s i s i s r e j e c t e d a t t h e . 1 0 s i g n i f i ­ cance l e v e l but is a c c e p t e d a t t h e .001 s i g n i f i c a n c e l e v e l . The c o n c l u s i o n is r e a c h e d , t h e r e f o r e , t h a t a t t h e .001 s i g n i f i ­ cance l e v e l t h e r e does no t e x i s t a s t a t i s t i c a l l y s i g n i f i c a n t d i f f e r e n c e in t h e r e c e i p t o f t a x e x e m p t i o n s between e s t a b l i s h ­ ments l o c a t e d In t h e n o r t h e r n f o u r w a t e r s h e d r e g i o n s and t h o s e l o c a t e d in t h e s o u t h e r n t h r e e wa te rs h ed r e g i o n s . 203 TABLE 2 2 . — Two-by-two c o n t i n g e n c y t a b l e f o r c h i - s q u a r e t e s t o f n u l l hy p o t h e s i s t h a t no d i f f e r e n c e In t h e r e c e i p t o f t a x exemp­ t i o n s e x i s t s between t h e number o f e s t a b l i s h m e n t s include d in t h e W a t e r - U s in g No ndurables c a t e g o r y and t h e number included In th e W a t e r - U s in g D ur ab les c a t e g o r y . ® Observed number Nondur­ ables Durab les To ta 1 24 26 50 Did r e c e i v e an exemption Expected number ( 27 . 6 ) (22.4) (50) Observed number 218 170 388 Did no t r e c e i v e an exemption Expected number Total Observed and expected (214.4) 242 (173.6) 196 (388) 438 a Co nsiders o n l y t a x exemptions r e c e i v e d p r i o r to September, 1969, by e s t a b l i s h m e n t s w i t h d i r e c t l y - c o n t r o l l e d d i s c h a r g e s . Notes: 2 2 Using Y a t e s ' c o r r e c t i o n f o r c o n t i n u i t y , X “ 1*19* With a x o f 1 . 1 9 , t h e n u l l h y p o t h e s i s is r e j e c t e d a t th e . 3 0 s i g n i f i ­ cance l e v e l bu t is a c ce pt e d a t the .001 s i g n i f i c a n c e l e v e l . The c o n c l u s i o n is re a c h e d , t h e r e f o r e , t h a t a t t h e .001 s i g n i f i ­ cance l e v e l t h e r e does n o t e x i s t a s t a t i s t i c a l l y s i g n i f i c a n t d i f f e r e n c e In th e r e c e i p t o f t a x exemptions between e s t a b l i s h ­ ments in cl ud e d In t h e W a t e r - U s i n g Nondurables c a t e g o r y and those Include d in t h e W a t e r - U s in g D ur ab les c a t e g o r y . 20b Structure E x p l o r a t o r y r e s e a r c h led t o t h e f o r m u l a t i o n o f two s u b s t a n t i v e hypo the ses ' about d i f f e r e n c e s among v a r i o u s s i z e s and m a n u f a c t u r in g p l a n t s which had a p p l i e d du ri n g t h e f i r s t s t a te m e nt o f f o r and r e c e i v e d exemptions f o u r y e a r s o f M i c h i g a n ' s program. its s t a tis t ic a l fo rm , 2 locatio ns o f In an in fo r m a l one o f th e s e hypotheses m a i n t a i n s t h a t between th e l a r g e r and s m a l l e r m a n u f a c t u r i n g p l a n t s which o p e r a t e t h e i r own w a s t e w a t e r t r e a t m e n t f a c i l i t i e s g r e a t e r p r o p o r t i o n o f t h e l a r g e r p l a n t s had a p p l i e d exemptions p r i o r t o September, T a bl e 19. tic a l f or m , 1969- A second h y p o t h e s i s h o l d s , a s ig n ific a n tly f o r and r e c e i v e d This hypothesis is t e s t e d by in what a pp ro ac hes t h a t between those m a n u f a c t u r i n g p l a n t s in M ic h i g a n its located s ta tis ­ in m e t r o p o l i t a n and n o n m e t r o p o l i t a n c o u n t i e s which o p e r a t e t h e i r own treatment f a c i l i t i e s a s ig n if ic a n t ly g re a te r proportion of m e tro p o li­ tan p l a n t s had a p p l i e d f o r and r e c e i v e d exem ption s p r i o r 1969. is t e s t e d by T a b l e 2 0 . Th is hypothesis t o September, T a b l e s 21 and 22 do no t p r o v i d e t e s t s o f h y p o t h e s e s . T a b l e 21 t e s t s to see i f any s i g n i f i c a n t d i f f e r e n c e e x i s t e s proportions o f p la n ts w ith in Rather, between t h e W a t e r - U s i n g N on du rab les c a t e g o r y and ' " S u b s t a n t i v e hypothe ses " and " s t a t i s t i c a l hy po th e se s " a r e hereby used w i t h r e f e r e n c e t o d e f i n i t i o n s g i v e n in Fred N. K e r l i n g e r , Foundations o f B e h a v i o r a l Research (New Yo rk : H o l t , R i n e h a r t and Wi nst on, Inc".," ”1965)", p". "173* 2 According t o K e r l i n g e r , "A s t a t i s t i c a l h y p o t h e s i s e x p r e s s e s an a spect o f t h e o r i g i n a l s u b s t a n t i v e h y p o t h e s i s in q u a n t i t a t i v e and s t a ­ t i s t i c a l term s." ( Ib id .) T h i s p a ra gr ap h i n c l u d e s what th e a u t h o r c a l l s informal s ta te m e n t s o f , o r approaches t o , s t a t i s t i c a l forms o f h y p o t h e ­ ses. These s t a te m e n t s a r e l a b e l e d in t h i s manner because t h e y a r e n a r r a t i v e v e r s i o n s o f what coul d be r e s t a t e d in q u a n t i t a t i v e and s t a ­ t i s t i c a l t e rm s . 205 th e W a t e r - U s i n g D u r a b le s c a t e g o r y which had a p p l i e d e x em p ti o n s . And T a b l e 22 t e s t s to see e x i s t s between p r o p o r t i o n s o f p l a n t s if f o r and r e c e i v e d any s i g n i f i c a n t d i f f e r e n c e located w i t h i n t h e southernmost t h r e e and th e n o rt he r nm os t f o u r wa te rs h ed r e g i o n s which had a p p l i e d f o r and r e c e i v e d e x e m pt io ns . Ta b l e s 19 t hr ou g h 22 a r e s t r u c t u r e d th e same. hand, o r " t o t a l , " column o f each o f th e s e t a b l e s , same d a t a . columns, however, repeats Reading from t h e top row to t h e bottom row o f each o f sequential references is made t o (1) to have r e c e i v e d an e x e m p t i o n , (2 ) r e c e i v e d an e x e m p t i o n , and t h e ^38 p l a n t s tio n . Only t h e r i g h t - (3) the these t h e 50 p l a n t s observed t h e 388 p l a n t s observed t o have not t h a t comprise th e p o p u l a ­ None o f the two rem a in in g columns o f each o f thes e t a b l e s c o n t a i n th e same f r e q u e n c i e s because each column r e f e r s to a d i f f e r e n t impact subgroup. As mentioned a bo v e , T a b l e 18 is the source o f t h e obser ved f r e q u e n c i e s o f p l a n t s which had r e c e i v e d an exemption the subgroups r e f e r r e d t o by t h e columns o f T a b l e s observed f r e q u e n c i e s a r e p la c e d w i t h i n w i t h i n each o f 19 t hro ug h 22 . th e top row These o f each t a b l e . The observed f r e q u e n c i e s o f p l a n t s w i t h i n each subgroup which had not r e c e i v e d an e x e m p ti o n , however, were not o b t a i n e d gi ve n s o u r c e . t h e s e f r e q u e n c i e s , which a r e shown in t h e m i d d l e Rather, row o f each t a b l e , have had to be d e r i v e d top and bottom rows o f each t a b l e . l a t e d f o r each r e s p e c t i v e from any p r e v i o u s l y from d a t a These l a t t e r in c lu d e d in th e f r e q u e n c i e s were c a l c u ­ impact subgroup, o r column, by s u b t r a c t i n g th e number o f p l a n t s observed t o have r e c e i v e d an exemption from t h e number o f p l a n t s w i t h i n the e n t i r e p o p u l a t i o n t h a t were included w i t h i n 206 t h e same subgroup, o r col um n. w ithin These l a t t e r the e n t i r e p o p u la tio n a r e placed frequencies o f plan ts in t h e bottom c e l l s o f t h e l e f t - h a n d and m i d d l e columns o f each t a b l e . th e s e f r e q u e n c i e s Sources which have y i e l d e d I n c l u d e t h e u n r e p o r t e d d a t a used t o c a l c u l a t e the p e r c e n t a g e f i g u r e s o f T a b l e 3. Ex pec ted f r e q u e n c i e s have been l i s t e d w i t h i n table. tenth, These e x p e c te d f r e q u e n c i e s have been rounded t o t h e n e a r e s t and p l a c e d w i t h i n p a r e n t h e s e s . s im ilar tio n . two rows o f each They a r e , in one r e s p e c t , t o f r e q u e n c i e s o f p l a n t s ob se rv ed t o have no t r e c e i v e d an exemp­ This s i m i l a r i t y lie s in t h e f a c t f r e q u e n c i e s have a l s o been d e r i v e d that th e two rows o f expe cte d from o t h e r d a t a r e p o r t e d by each tab le. The n u l l h y p o t h e s i s o f each c h i - s q u a r e t e s t reported herein m aintains t h a t no s i g n i f i c a n t d i f f e r e n c e e x i s t s between p r o p o r t i o n s o f the t o t a l observed f r e q u e n c i e s th at are in cl u d e d w i t h i n impact subgroups o f each t a b l e and p r o p o r t i o n s o f en tire population t h a t a re subgroups. or f i t , in cl u d e d w i t h i n plants w ith in t h e same r e s p e c t i v e Expected f r e q u e n c i e s have been c a l c u l a t e d the n u ll h y p o t h e s i s o f each t e s t . t h e two the impact so as t o s u i t , In o t h e r words, t h e 50 p l a n t s observed t o have r e c e i v e d an exem pti on and t h e 388 p l a n t s ob se rv ed to have no t r e c e i v e d an ex empti on have been d i v i d e d between t h e two impact subgroups r e f e r r e d t o by each t a b l e in t h e same e x a c t p r o p o r t i o n s as t h e p o p u l a t i o n o f 438 p l a n t s was found t o be a p p o r t i o n e d between th e same resp ective impact s u b g r o u p s . ' ^Consult N. W. Downfe and R. W. H e a t h , B as ic S t a t i s t i c a l M e t h o d s , 2d ed. (New Yo r k : H a r p e r & Row, 1 9 6 5 ) , p . 16 5, f o r t h e method used t o o b t a i n e x pe c t e d f r e q u e n c i e s . 207 Results The r e s u l t s o f c h i - s q u a r e t e s t s a r e summarized Tables 19 t hr ou g h 22.^ In each t e s t , the used t o d e t e r m i n e w h et h er o r no t t h e n u l l or r e j e c t e d . .001 is below and d e s c r i b e d its probable in Appendix I. was l e v e l , o r a lp h a t h e p o p u l a t i o n o f each im plications are S uffice le v e l, im plications o f a c e rta in i m p l i c i t l y associated w ith T h i s assumption and level h y p o t h e s i s should be a c ce pt e d was p u r p o s e l y chosen because o f t h e p o s s i b l e test. sig n ific a n c e T h i s most s t r i n g e n t s i g n i f i c a n c e assumption t h a t in t h e no tes t o it to say a t in tr o d u c e d this t im e t h a t the assumption a p p l i e s t o t h e p o p u l a t i o n o f ^38 p l a n t s because t h i s population is not p e r f e c t l y The c r i t i c a l s u i t e d f o r t h e purpose served by each t e s t . value o f c h i-s q u a re a t w i t h one de gr e e o f freedom is 1 0 . 8 2 7 . 2 the .001 T h is c r i t i c a l level v a l u e compares as f o l l o w s w i t h t h e v a l u e o f c h i - s q u a r e computed from d a t a in each o f th e 2 x 2 contingency ta b le s fo r tests s e t f o r t h by T a b l e s included 19 thr ough 22. C ritic a l value Computed v a l u e s T a b l e 19 T a b l e 20 T a b l e 21 T a b l e 22 1 0 .8 3 10.83 10 .8 3 10.83 ^7*70 2^.79 2.96 1 .1 9 ^The no tes t o T a b l e s 19 th rou gh 22 e x p l a i n t h a t t h e c h i - s q u a r e v a l u e o b t a i n e d from observed and e x pe c t e d f r e q u e n c i e s o f each t a b l e was c a l c u l a t e d a c c o r d i n g t o t h e f o r m u la which I n c l u d e s Y a t e s ' c o r r e c t i o n for c o n tin u ity . Oownle and Heath e x p l a i n , on page 166, t h a t Y a t e s ' c o r r e c t i o n Is o f t e n a p p l i e d when c h i - s q u a r e t e s t s a r e conducted which have o n l y one d e g r e e o f freedom. The a u t h o r a l s o conducted each o f t h e f o u r t e s t s w i t h o u t a p p l y i n g Y a t e s ' c o r r e c t i o n , and no changes o c c u r r e d in th e o v e r a l l r e s u l t s o f t h e t e s t s , 2 Downie and H e a t h , B asi c S t a t i s t i c a l Methods, T a b l e IV, p. 299. 208 As s t a t e d c ritic a l In n o t e s t o T a b l e s 19 and 2 0 , com pa ris on s between t h e v a l u e and computed v a l u e s r e s u l t e d In r e j e c t i o n o f t h e n u l l hy po the ses a p p l i c a b l e t o t e s t s shown by t h e s e two t a b l e s . T a b l e s 21 and 2 2 , howe ver, e x p l a i n the acceptance o f the n u ll that Notes t o t h e s e c om par iso ns r e s u l t e d h y po th e se s a p p l i c a b l e In t o t h e t e s t s shown by th e s e two t a b l e s . ^ Because t h e n u l l Tables hyp o th e se s a p p l i c a b l e 19 and 2 0 have been r e j e c t e d , ap p licab le to these t e s t s hypotheses, It w ill t o t e s t s d e p i c t e d by th e two s u b s t a n t i v e hypoth ese s have been a c c e p t e d . These s u b s t a n t i v e be r e c a l l e d , were f o r m u l a t e d on t h e b a s i s o f knowledge g a i n e d d u r i n g o f chi-square t e s t s , the course o f e x p l o r a t o r y therefo re, research. le a d t o t h e c o n c l u s i o n that The r e s u l t s s ig n ifi­ c a n t l y g r e a t e r p r o p o r t i o n s o f m a n u f a c t u r i n g p l a n t s wh ich e m i t t e d d ire c tly -c o n tro lle d s p e c ific impact subgroups d i d September o f the d i s c h a r g e s and wh ich wer e 19 69 . Included w i t h i n two indeed r e c e i v e t a x ex em pt io ns p r i o r The two Impact subgroups h e r e b y r e f e r r e d to to Include l a r g e s t e m p l o y m e n t - s i z e c a t e g o r y o f 250 o r more employees and th e groups o f c o u n t i e s c o n s i d e r e d as m e t r o p o l i t a n c o u n t i e s As men tion ed a b o v e , th e c h i - s q u a r e t e s t s In t h i s study. shown as T a b l e s 21 and 22 have n o t been conducted f o r t h e purpose o f s u b s t a n t i a t i n g o r r e f u t i n g any h y p o t h e s e s . In o r d e r Rather, to determine If these l a t t e r two t e s t s have been c a r r i e d o u t c e r ta in data r e p o r t e d by T a b l e 18 r e p r e s e n t ^The v a l u e o f c h i - s q u a r e computed from d a t a I n c l u d e d In T a b l e 21 would have le d t o t h e r e j e c t i o n o f t h e n u l l h y p o t h e s i s i f t h e . 1 0 l e v e l o f s i g n i f i c a n c e had been cho sen. And t h e v a l u e o f c h i - s q u a r e computed from t h e d a t a o f T a b l e 22 would have le d t o t h e r e j e c t i o n o f t h e n u l l h y p o t h e s i s I f t h e . 3 0 l e v e l o f s i g n i f i c a n c e had been chosen. 209 any d i f f e r e n c e s between some s p e c i f i c impact subgroups in t h e p r o p o r ­ t i o n s o f e s t a b l i s h m e n t s w h ic h had r e c e i v e d a c e r t i f i c a t e Because t h e n u l l hypotheses a p p l i c a b l e T a b l e s 21 and 22 have been a c c e p t e d , real d ifferences o f exemption. t o t h e t e s t s d e p i c t e d by the c o n c lu s io n follow s that no e x i s t between t h e p r o p o r t i o n s o f p l a n t s w h ic h had r e c e i v e d a c e r t i f i c a t e and w h ic h we re impact subgroups r e f e r r e d in c l u d e d w i t h i n t o by t h e s e t a b l e s . subgroups t o which t h i s c o n c l u s i o n a p p l i e s f o u r and south ernmo st t h r e e w a t e r s h e d the p a irs o f The two p a i r s o f impact in clude the northernmost r e g i o n s and t h e W a t e r - U s i n g N on du rab les and l / a t e r - U s i n g D u r a b l e s c a t e g o r i e s . The Purpose and R e s u l t s o f A l t e r n a t i v e Form ulations o f Chi-Square Tests Purpose and P r oc e du r e In t h e p r i o r section, a t t e n t i o n was c a l l e d the p o p u l a t i o n o f each o f t h e f o r e g o i n g c h i - s q u a r e p erfectly suited Appendix H o f required in for th os e t e s t s . the n a tu re o f this An e x a m i n a t i o n population, I t s u s e , and t h e p r o b a b l e Appendix H proceeds by f i r s t order to use lim ita tio n s tests that is not is p r o v i d e d in i m p l i c i t as sumpt ion Im plications o f t h a t a s s u m p t io n . id e n tify in g im perfections a s s o c i a t e d w i t h t h e p o p u l a t i o n o f 438 p l a n t s . is then g i v e n o f t h e the to the f a c t the An e x p l i c i t statement i m p l i c i t a s su m p tio n t h a t has been r e q u i r e d th a t population in t h e above c h i - s q u a r e t e s t s . in Possible t h a t m ig h t be a s s o c i a t e d w i t h use o f t h e p o p u l a t i o n a r e conceptualized. These l i m i t a t i o n s a r e made m a n i f e s t by e s t i m a t i n g range o f p l a n t s w i t h i n th e t h e p o p u l a t i o n o f 438 p l a n t s wh ich m ig h t n o t have been s u i t e d f o r purposes serve d by t h e f o r e g o i n g tests. These e s t i m a t e s 21 0 a r e taken I n t o account In r e f o r m u l a t e d v e r s i o n s , o r s e n s i t i v i t y a n a l y ­ s e s , o f each o f t h e c h i - s q u a r e t e s t s . for a s t a t i s t i c a l mated range o f These r e f o r m u l a t i o n s p r o v i d e d e t e r m i n a t i o n about what e f f e c t , i f any, the e s t i ­ l i m i t a t i o n s mig ht have had on t h e a f o r e m e n ti o n e d r e s u l t s o f each t e s t . Results R e s u l t s o f s e n s i t i v i t y a n a l y s e s pr e s e n t e d not change t h e r e s u l t s o f o r i g i n a l .001 level of s ig n ific a n c e , chi-square te s ts . resu lts o f led t o t h e r e j e c t i o n o f n u l l and to th e ac cep ta nce o f n u l l in Appendix I did Thus, a t t h e reform ulated versions s t i l l hypotheses t e s t e d by T a b l e s 19 and 20 hypotheses t e s t e d by T a b l e s 21 and 2 2 . * N o n s t a t i s t i c a l A n a l y s i s o f P l a n t s Th at Had A p p l i e d For Exemptions on P r e t r e a t m e n t Works P r i o r t o September o f 1969, a t o t a l o f 25 m a n u f a c t u r in g e s t a b l i s h m e n t s had a p p l i e d f o r a t a x exemption on t h e i r works which p r e t r e a t e d w a s te w a te rs p r i o r Of thes e 25 p l a n t s , to f i n a l treatm ent in p u b l i c f a c i l i t i e s . 19 had r e c e i v e d a c e r t i f i c a t e o f e x e m p t i o n , 3 had been denied a c e r t i f i c a t e , and c e r t i f i c a t e s were pending issue to a n o th e r 3 p l a n t s . I n f o r m a t i o n o b t a i n e d about th e s e 25 p l a n t s t h a t t h e y were a l l located w i t h i n nonmetropolitan c o u n tie s . were l o c a t e d w i t h i n revealed Thus, a l l th e southernmost t h r e e water she d r e g i o n s . more, 23 o f th e s e p l a n t s employed a t l e a s t 2 5 0 persons and were included w i t h i n th e W a t e r - U s in g D ur ab les c a t e g o r y . ments— a r e n d e r i n g p l a n t Further­ Only 2 e s t a b l i s h ­ in D e t r o i t and a m a n u f a c t u r e r o f p h a r m a c e u t i c a l s *As w i t h th e o r i g i n a l c h i - s q u a r e t e s t s , Y a t e s 1 c o r r e c t i o n f o r c o n t i n u i t y was a p p l i e d to each o f th e s e n s i t i v i t y a n a l y s e s . 211 and In d u s tria l c h e m ic a ls a t Muskegon— employed l e s s than 250 persons and produced n o nd ur a bl e goods. F u r t h e r e x a m in a ti o n o f d a t a c o l l e c t e d on th e a f o r e m e n t i o n e d 25 e s t a b l i s h m e n t s showed t h a t t h e y were l o c a t e d w i t h i n t h e a r e a served by sewers from th e f o l l o w i n g pu blic treatment f a c i l i t i e s . Number o f M fg . P l a n t s P u b l i c Fac i 1 i t y Region E s t im a t e d P o p u la t i o n Served* I .............................................................. D etroit Warren ................................................................... Po n ti a c .............................................................. Wayne County D . P . W . : Wyandotte P l a n t No. 1 ........................ Mt. C l e m e n s ..................................................... Y p s i l a n t i Township ...................................... Tr e nt on .............................................................. Sal i n e .............................................................. .... 7 2 b 1,620,000 120,000 89,000 1 1 2 1 1 44,000 25,000 22,800 22,000 2,33b Reg Ion I IA Lansing .............................................................. Kalamazoo .................................................................. I 122,000 84,200 2 Reg Ion i I IA Saginaw ....................................................................... Bay C i t y .............................................................. The above I n f o r m a t i o n facturing the a r e a 2 101,900 50,200 1 i n d i c a t e s t h a t o n l y one o f t h e s u b j e c t 25 manu­ p1ant5--a plant l o c a t e d a t S a l i n e — was no t s i t u a t e d w i t h i n served by towns and c i t i e s w i t h f a c i l i t i e s which served a t l e a s t 2 2 , 0 0 0 per sons. For s o u r c e s , r e f e r to th e notes to Appendix E. 212 N o n s t a t i s t t e a l A n a l y s i s o f M u l t i - and S i n g l e - P l a n t Firms Which Had A p p l i e d f o r an Exemption In t h e f o r e g o i n g s t a t i s t i c a l r e f e r e n c e has been made t o a t o t a ) and n o n s t a t i s t i c a l o f 84 e s t a b l i s h m e n t s which had a p p l i e d f o r a t a x e x em pt io n c e r t i f i c a t e t r e a t m e n t w o rk s . Not a l l of for e ith e r these e s ta b lis h m e n ts , owned and o p e r a t e d by s e p a r a t e and d i f f e r e n t tio n gathered about these p la n ts p a r t o f some 40 f i r m s . factu rers , one p r o d u c t i o n f a c i l i t y , o t h e r hand, o n l y 7 o f revealed By c o n s u l t i n g i t was d e t e r m i n e d o ffic e s firm s. treatm ent or pre­ however, were Rather, informa­ t h a t the 84 p l a n t s were t h e D i r e c t o r y o f M ic h i g a n Manu­ t h a t 33 o f th e s e f i r m s o p e r a t e d more than o r e s ta b lis h m e n t, w i t h in M ichigan. On t h e these firm s c a r r ie d out manufacturing o p eration s in M ic h i g a n w i t h i n a s i n g l e p l a n t . th e ir central a n a ly s is , Furthermore, th e s e 7 f i r m s a l l had in the same community as t h e i r m a n u f a c t u r i n g e s t a b li shm ents.* These s i n g l e - p l a n t f i r m s wer e in cl u d e d w i t h i n t h e food proces s i n g , c h e m i c a l s , p r i m a r y m e t a l s , f a b r i c a t e d m e t a l s , and n o n - e l e c t r i c a l m a ch in e r y i n d u s t r i e s . They employed from 81 t o 983 persons in 1967. A t o t a l o f nin e m u l t i - p l a n t firm s w ith in the paper, chem icals, p r i m a r y m e t a l s , and a u t o m o b i l e i n d u s t r i e s had a p p l i e d f o r exemptions f o r w a t e r p o l l u t i o n c o n t r o l f a c i l i t i e s in p l a c e a t two o r more o f th e ir plants. Of t h e s e n i n e f i r m s , o n l y two l a r g e a u t o m o b i l e manu­ f a c t u r i n g f i r m s had a p p l i e d f o r ex em pti ons a p p l i c a b l e t o more than three separate establishm ents. These two a u t o m o b i l e c o r p o r a t i o n s had a p p l i e d f o r ex em pt io ns a p p l i c a b l e t o some 30 s e p a r a t e p l a n t s . PART V SUMMARY, CONCLUSIONS, AND RECOMMENDATIONS 213 CHAPTER X SUMMARY P r e vi e w o f Th ree Cha pte rs T h i s and t h e n e x t two c h a p t e r s draw t h i s The p r e s e n t c h a p t e r summarizes and c h a r a c t e r i z e s nature. Then, C h a p te r XI from i t s fin ding s. fo c a lize s study to its close. t h e s t u d y ' s ge ne ra l the basic conclusions that re s u lt Based upon t h e s e c o n c l u s i o n s and upon an o u t r i g h t n o r m a t iv e statemem. by t h e a u t h o r , Ch apter X I I then o f f e r s recommenda­ tio ns. The purpose o f some r e a d e r s may be served by a r e a d i n g o f j u s t the p r e l i m i n a r i e s P a r t V. to t h i s d i s s e r t a t i o n and th e s e t h r e e c h a p t e r s Others may want to r e f e r d e t a i l s given any r a t e , to th e s e c h a p t e r s b e f o r e t u r n i n g to in p r e v i o u s c h a p t e r s and t h e i r th e b a s i c purpose o f t h e s e c h a p t e r s p r e v io u s c h a p t e r s and r e l a t e d app endices c o n c l u s i o n s and t h e i r im plications. co ns id ere d when a r r i v i n g a t r e l a t e d a p p e n d ic e s . in o r d e r t o focus upon major These i m p l i c a t i o n s have been recommendations ab ou t conduct o f f u t u r e r e s e a r c h on th e economic (1) the a d m i n i s t r a ­ th e impacts o f p u b l i c measures water p o l l u t i o n . Intro duction To pi c s summarized settin g , At is t o look back upon t i o n and c o o r d i n a t i o n o f p e r t i n e n t p o l i c i e s and programs, and ( 2 ) to c o n tro l in in t h i s to T h is Ch apt er present chapter i n c l u d e th e s t u d y ' s e x p l o r a t o r y r e s e a r c h , and o b j e c t i v e s and methods which 21 1* 215 r e s u l t e d from e x p l o r a t o r y r e s e a r c h . several T h i s summary a l s o r e f e r s to terms which a p t l y d e s c r i b e some b a s i c f e a t u r e s o f st ud y methods, I n f o r m a t i o n and d a t a i n c o r p o r a t e d t h e r e i n , and f i n d i n g s r e s u l t i n g therefrom . A Summary o f t h e S e t t i n g P r e - 1965 P o l i c i e s and Programs P rior to I965> t h e s e p a r a t e s t a t e s had a lm o s t u n l i m i t e d freedom t o c a r r y ou t th e kind s o f w a t e r p o l l u t i o n c o n t r o l that they each saw f i t to a d o p t , a d m i n i s t e r , and e n f o r c e . taw b e f o r e 19^8 a u t h o r i z e d any f e d e r a l d irection s t h a t t h e s e s t a t e programs were t a k i n g . 1965 Congress o n l y p e r m i t t e d f e d e r a l a d o p t i o n o f more u n i f o r m s t a t e agency t o a u th o ritie s programs No f e d e r a l i n f l u e n c e the v a r i o u s And from 19*18 to to encourage th e laws and to p a r t i c i p a t e in f e d e r a l - s t a t e enf orcement c o n f e r e n c e s t h a t were p r i m a r i l y concerned w i t h the p o l l u ­ tio n o f c e rta in in te rs ta te waters. * W it h t h i s de g r e e o f freedom from f e d e r a l in tervention , the M ich ig an l e g i s l a t u r e e n t r u s t e d most o f th e s t a t e ' s w a t e r p o l l u t i o n control f u n c t i o n s to a Stream C o n t r o l Resources Commission i t s s u c c es s s o r , in 19*i9. Both th e Stream C o n t r o l Commission and t o r e g u l a t e t h e amount o f s p e c i f i c k in d s o f w a s t e lo a d s t h a t cou ld be e m i t t e d in f i n a l d i s c h a r g e s from i n d i v i d u a l When a r r i v i n g a t t h e s p e c i f i c the se i n d i v i d u a l l y t a i l o r e d e fflu e n t regulations re s tric tio n s , c on ti n u e d to a b i d e by th e r e a s o n a b l e - u s e d o c t r i n e lished in 1929 and to a Water th e Water Resources Commission, made e x c l u s i v e use o f e fflu e n t re stric tio n s po int sources. Commission In M ich ig an by s t a t e c o u r t s . Thus, included In both commissions t h a t had been e s t a b ­ th e s e commissions f o l l o w e d 216 th e p r i n c i p l e o f b a l a n c i n g t h e e q u i t i e s when d e c i d i n g upon t h e amounts V o f w a s te lo a d s t o be a l l o w e d in any s p e c i f i c d i s c h a r g e . made between th e c o s t s o f a l t e r n a t i v e un la wf ul Comparisons were l e v e l s o f c o n t r o l l i n g each d i s c h a r g e and th e b e n e f i t s e x pec te d t o a c c r u e downstream from these a l t e r n a t i v e s . Such comparisons were made on an In f o r m a l ad hoc b a s is by t h e commissions thr ough a h e a r i n g process p r e s c r i b e d In t h e i r enabling a c t s . A t t i t u d e s About P o l i c i e s and Programs When a p p e a r in g b e f o r e c o n g re s s io n a l early in th e 1950s and 19 60s, spokesmen f o r t h e M ic hi ga n Water Resources Commission d i s p u t e d t h e need f o r s t r o n g e r f e d e r a l grams conducted prided hearings in M ich ig an and a u t h o r i t y over re g u la to ry pro­ in o t h e r s t a t e s . the commission on the accomplishments o f These spokesmen its r e g u l a t o r y program, which had been a d m i n i s t e r e d a c c o r d in g to th e same b a s i c p r i n c i p l e s f o r almost a q u a r t e r o f a c e n t u r y . Sev era l v oi c e d a pp r ov a l d u r i n g th e e a r l y M ic hi ga n i n d u s t r i a l i s t s also 1960s o f th e f a i r n e s s and r e s u l t s o f the commission's program. Passage o f 1965 and 1966 Acts In s p i t e o f o b j e c t i o n s by groups such as s t a t e a ge nc ies and i n d u s t r i a l and m u n i c i p a l a s s o c i a t i o n s , Congress adopted and P r e s i d e n t Johnson approved the Water Q u a l i t y Act o f to p r e s s u re s e x e r t e d by o t h e r regulatory i n t e r e s t grou ps. v i s i o n s t h a t were soon t o b r i n g about th e f i r s t 1965 in response T h i s a c t c o n t a in e d p r o ­ major p r oc e du r a l changes In th e 2 6 - y e a r - o l d program o f c o n t r o l l i n g w a t e r p o l l u t i o n Michigan thr ough the a u t h o r i t y o f a commission. in The 1965 a c t e x e r c i s e d 217 the fe d e r a l p o l i c e power by r e q u i r i n g each o f t h e 50 s t a t e s f e d e r a l l y app roved w a t e r q u a l i t y programs w h ic h r e g u l a t e d waters. Furthermore, resulted in p r o c e d u r a l la tte r act the re lie d incentive of s t a n d a r d s as t h e f o u n d a t i o n o f the d isch arg e o f p o llu ta n ts in M i c h i g a n ' s increased fe d e r a l grants in te rs ta te 1966 a l s o r e g u l a t o r y program. in terstate to municipal This wastewater in th o s e s t a t e s w h ic h o p e r a t e d own g r a n t program and w h ic h had a d o p t e d to th e ir upon t h e spending power o f government by o f f e r i n g t r e a t m e n t works t h a t w e re b u i l t tio n into t h e Cl ea n W a t e r R e s t o r a t i o n A c t o f changes t o employ in tra s ta te standards th e ir in a d d i ­ standards. Response in M ic h i g a n t o 1965 and i g 6 6 A ct s Acting sta ff of in r e sp ons e t o t h e f e d e r a l a r e a s , and p l a n s o f in tra s ta te the c r i t e r i a , standards. numerous d r a i n a g e b a s i n a r e a s in each o f and r e p r e s e n t a t i v e s o f th e d i f f e r e n t r e p o r t s which r e vi ew e d throughout these a r e a s . At the present Public these h e a r in g s , hearings in d iv id u a ls i n t e r e s t groups e x pr es s e d t h e i r vie ws a bo u t had been proposed by A f t e r w e i g h i n g comments g i v e n d u r i n g t h e s e h e a r ­ in g s , t h e commission and its s t a f f made some changes The commission forma 11y adopted standards in terstate land r e s o u r c e s w i t h i n the s t a t e . components o f s tre a m s t a n d a r d s t h a t th e commission s t a f f . use d e s i g n a t i o n The use d e s i g n a t i o n a r e a s were proposed and p r o s p e c t i v e f u t u r e uses o f w a t e r and r e l a t e d were t hen h e l d th e th r o u g h t h e i m p l e m e n t a t i o n and e n f o r c e m e n t o f bo th f o r s p e c i f i c w a t e r s on t h e b a s i s o f state 1965 and 19 66, t h e M i c h i g a n W at er R eso urces Commission went proces s o f d r a w in g up p r o p o s a l s f o r and acts o f in 19&9. in te rs ta te standards in t h e s e p r o p o s a l s . in 1968 and in tra ­ 218 A d m i n i s t r a t i v e R e s u l t s o f t h e 1965 and 1966 Acts W ith th e a d o p t i o n o f st rea m s t a n d a r d s , t h e M ic hi ga n Water Resources Commission l o s t much, bu t n o t n e a r l y a l l , o f t h e freedom i t had p r e v i o u s l y h e ld t o a s s i g n e f f l u e n t r e s t r i c t i o n s to charges on t h e b a s i s o f s e p a r a t e ad hoc h e a r i n g s . a l l y a s s ig n e d e f f l u e n t re stric tio n s were s t i l l a d m i n i s t e r and e n f o r c e the st rea m s t a n d a r d s . needed t o individual To be s u r e , required d is­ individu­ in o r d e r to Such r e s t r i c t i o n s were Inform s p e c i f i c p o i n t sources a bo u t t h e amounts o f v a r i o u s kinds o f w a s t e lo a d s t h a t t h e i r d i s c h a r g e s c o u ld c o n t a i n w i t h o u t ex cee ding t h e areas instr ea m c r i t e r i a which p r o t e c t e d in e f f e c t below t h e i r d i s c h a r g e s . s t and ar ds p r e s c r i b e d some d e f i n i t e restrictio n s that t h e use d e s i g n a t i o n But t h e newly adopted stream lim its t o t h e k in d s and l e v e l s o f t h e commission cou ld p l a c e upon s p e c i f i c d i s c h a r g e s . These r e s t r i c t i o n s had to be s e t w i t h c o n s i d e r a t i o n g i v e n to (I) k in d s and amounts o f w a s t e lo a d s e m i t t e d by any e x i s t i n g o r p r o s p e c t i v e fu tu r e dischargers designation area, l o c a t e d a l o n g w a t e r s p r o t e c t e d by a p a r t i c u l a r use (2) in s t r e a m c r i t e r i a use d e s i g n a t i o n a r e a , and ( 3 ) which a p p l i e d and were In a d d i t i o n efflu e n t la te in t h e p l a n s o f t o th e above l i m i t s re s tric tio n s , 1960s. across-the-board e f f lu e n t t o e n t i r e groups o f included A ll s till in d u s tria l the p a r t i c u l a r s ta n d a r d s and m u n i c i p a l d i s c h a r g e r s im p l e m e n t a t io n o f th e stream s t a n d a r d s . t o t h e c omm issio n's l a t i t u d e other discharges emitted p l a n t s and m u n i c i p a l i t i e s that protected lim its in s e t t i n g came i n t o b e in g d u r i n g t h e i n t o p u b l i c w a t e r s by i n d u s t r i a l l o c a t e d w i t h i n w a te r sh ed s d r a i n i n g i n t o Lakes E r i e , M i c h i g a n , o r S u p e r i o r then became s u b j e c t t o c e r t a i n e f f l u e n t s t a n d a r d s t h a t had been a gr eed upon by p a r t i c i p a n t s enfor ce men t c o n f e r e n c e s . in f e d e r a l - s t a t e 219 In e f f e c t , then, the requirements o f water q u a l i t y and en fo rc e me nt c o n f e r e n c e s have reduced t h e freedom t h a t s ta n d a r d s th e M ic hi ga n Water Resources Commission once had t o compare, on a c a s e - b y - c a s e b asis, th e upstream c o s t s and downstream b e n e f i t s o f a l t e r n a t i v e of e fflu e n t re s tric tio n s . Ever s i n c e t h e r e q u i r e m e n t s o f st a nd a rd s came i n t o b e i n g , re stric tio n s it p i a c e d upon w i t h t h e minimum l e v e l s o f uses o f p a r t i c u l a r w a t e r s . enf or ce me nt c o n f e r e n c e s , have r e q u i r e d t h e commission has had t o in d ivid u al Furthermore, in c om p li a n c e which now p r o t e c t s p e c i f i c th r o u g h t h e d e v i c e o f e f f l u e n t and e f f l u e n t standards, As a r e s u l t o f t h e s e v a r i o u s governmental t h e commission u n its , sources o f w a t e r b o r n e w a s t e s . federal water p o llu tio n v oic ed t h e i r o p i n i o n s a t h e a r i n g s In a d d i t i o n , persons, in divid ual These newly heard e n t i t i e s control e nfo rc em ent c o n f e r e n c e s , and th o s e in s t r e a m in having t h e i r say a bo u t th e kinds and l e v e l s o f c o n t r o l s t h a t should be p l a c e d upon Congress, standards, t h a t minimum l e v e l s o f t r e a t m e n t be p r o v i d e d by a l l and groups have j o i n e d point th e b o th t h e stream s t a n d a r d s and members o f e n t i r e c l a s s e s o f d i s c h a r g e s . c rite ria stream insure th a t d i s c h a r g e s were instream c r i t e r i a s e ts a u th o ritie s , include p a rtic ip a n ts In I n d i v i d u a l s and groups which have in Washington and t h r o u g h o u t M i c h i g a n . th e s t a f f o f the commission Its e lf t o th e r e g u l a t o r y process th r o u g h th e p l a n s , has had a g r e a t e r in p u t p r o p o s a l s , and r e v i e w s It has p r o v i d e d . Each a d d i t i o n a l co n trib u to r to t h e r e g u l a t o r y process may have had i t s own n o t i o n s a bo u t which s e c t o r s o r r e g i o n s stood t o g a i n t h e b e n e f i t s and pay t h e c o s t s o f c e r t a i n o f th e s e p a r t i c i p a n t s , r e g u l a t o r y measures. i n c l u d i n g Congress, federal But none p o llu tio n control 220 a u th o ritie s , and t h e s t a f f o f t h e commission, had t h e w h e r e w i t h a l to a c q u i r e and r e p o r t knowledge abou t t h e magnitude o f t h e s e b e n e f i t s and costs. total Nor d i d any o f them g a i n any c l e a r u n d e r s t a n d i n g ab ou t how b e n e f i t s compared w i t h t o t a l costs. Lack o f Knowledge About Economic E f f e c t s In th e l a t e Commission found It when j u s t impacts t h a t stood t o r e s u l t t h e commission it had a t To be s u r e , in o r d e r t o im pa ct s. But sion f e l t se cu re its e lf however, to keep a b r e a s t o f t h e g e n e r a l impacts upon s e p a r a t e e s t a b l i s h m e n t s and com­ t h e commission d i d n o t c a r r y ou t any form al l e a r n o f th e in t h e thr oug h stream and e f f l u e n t from t h e new r e g u l a t o r y in e a r l i e r y e a r s , i n c i d e n c e and mag nitu de o f i n t e r v i e w s gave t h e a u t h o r t h e a b le to a c q u ir e knowledge had h e ld a d m i n i s t r a t i v e h e a r i n g s on an l e a s t been a b l e n a t u r e o f such economic studies t h e M ic h i g a n Water Resources had t o a d m i n i s t e r and e n f o r c e . ad hoc b a s i s , m unities. th erefo re, i t s e l f w i t h o u t any d e t a i l e d and r e l e v a n t about t h e economic programs )960s, impres sion t h a t t h e commis­ i n f o r m a t i o n about such impacts t h a t it s a d m in is tr a tiv e hearings. standards, th e s e i t was The newly adopted however, had b r o u g h t about t h e more u n i ­ form r e g u l a t o r y p ro c e du re s which not o n l y gave th e a f o r e m e n t i o n e d e n t i t i e s a v o i c e but a l s o put t h e commission o u t o f of this i n f o r m a t i o n about economic touch w i t h much im pa ct s. From O r i g i n s t o O b j e c t i v e s A P r e l i m i n a r y Study In June o f 1 9 68 , t h e a u t h o r began r e s e a r c h f o r a s h o r t - t e r m s t u d y which was e v e n t u a l l y expanded into t h is d i s s e r t a t i o n . This 221 p re lim in a ry , or fo reru n n in g , st ud y was conducted in ac cor dan ce w i t h g u i d e l i n e s p r o v i d e d by a r e s e a r c h c o n t r a c t between t h e M ic h ig a n Water Resources Commission and t h e Department o f Resource Development a t M ich ig an S t a t e U n i v e r s i t y . t h e economic fie ld In t h e l a t e 1960s. s p e c i f i e d , was t o be e x p l o r a t o r y . i n t e r v i e w s and economic a n a l y s e s . economic for i n f o r m a t i o n about impacts o f c e r t a i n p o l i c i e s and programs t h a t t h e commis­ sion had begun t o c a r r y o u t contract This c o n tr a c t c a l l e d Such r e s e a r c h , I t was to th e i n c l u d e both I t was t o l e a r n about t h e impacts o f st rea m s t a n d a r d s and r e l a t e d measures upon t h e s t a t e ’ s d e v e l o p i n g economy. The c o n t r a c t asked t h a t f i n d i n g s be reported w it h in s i x months. The r e p o r t was t o p r e s e n t f i n d i n g s f o r each o f s e v e r a l s u b - s t a t e r e g io n s t h a t were d e s i g n a t e d by t h e c o n t r a c t . These r e g i o n s , r e f e r r e d t o h e r e i n as wa te rs h ed r e g i o n s , a r e comprised o f groups o f c o n ti g u o u s c o u n t i e s whose streams and r i v e r s d r a i n , t h e most p a r t , i n t o a s i n g l e one o f t h e G r e a t Lakes o r for In to the various i n t e r c o n n e c t i n g w a t e r s between Lakes Huron and E r i e . E x p l o r a t o r y Research A process o f e x p l o r a t o r y r e s e a r c h was c a r r i e d o u t w ith the aforementioned research charge. w ith the report w r it t e n i t c o n t i n u e d on u n t i l T h i s process d i d no t end in e a r l y 1969 to f u l f i l l t h e summer o f th a t charge. 1971 when a l l Thus, other been de c id e d the e x p l o r a t o r y r e s e a r c h process to o k about t h r e e y e a r s . T h i s amount o f t im e r e f l e c t s ceptual, Rather, o f the s p e c ific o b j e c t i v e s and methods o f t h i s p r e s e n t work had f i n a l l y upon. in accordance th e o re tic a l, t h e complex n a t u r e o f and m e t h o d o l o g i c a l i n t e r d i s c i p l i n a r y undertakings. th e p r a c t i c a l , issues r a i s e d in t h i s and con­ 222 T h i s has been an I n t e r d i s c i p l i n a r y There Is no way t h a t a s t u d y cond ucted m e nt io n ed subject m atter areas. i n d i c a t e d by t h e s i n g l e - w o r d m o d i f i e r s e co nom ic, and m e t h o d o l o g i c a l . to in fo rm a tio n about the s h ip s between v a r i o u s (2) In a c c o rd a n c e w i t h t h e a f o r e ­ research charge could avoid d e a lin g w i t h ing t o f o u r d i f f e r e n t be technical improvements o f po int study ou t o f n e c e s s i t y . (1) In form ation p e r t a i n ­ These a r e a s c a n , in s titu tio n a l, More e x p l i c i t l y , In b r i e f , technologic, these fo u r areas r e l a t e a d m i n i s t r a t i v e w o r k in g s and in te rre la tio n ­ r e g u l a t o r y p o l i c i e s and a s s i s t a n c e prog rams, re sponses t o t h e s e p o l i c i e s and programs o r t o t h e in w a t e r q u a l i t y t h e y b r i n g a b o u t by d i f f e r e n t s ou rc es and w a t e r u s e r s , e f f i c i e n c y , d e v e l o p m e n t a l , and d is trib u tio n a l impacts ( 4 ) methods o f r e s e a r c h which m i g h t be used t o e s t i m a t e c e r t a i n economic impacts o f p a r t i c u l a r In itia te d (3) categ ories by t h e s e t e c h n i c a l r e s p o n s e s , and responses t o s e l e c t e d p o l i c i e s and programs. I n f o r m a t i o n c l a s s i f i e d w i t h i n each o f t h e s e a r e a s was a c q u i r e d from I n t e r v i e w s and from a r e v i e w o f lite ra tu re . t o r y r e s e a r c h se arched f o r and e v a l u a t e d d a t a In a d d i t i o n , t h a t m i g h t be u s e f u l th os e r e s e a r c h methods w h ic h seemed t h e most p r o m i s i n g . found and in census r e p o r t s , in d u s tria l exp lo ra­ in Such d a t a was agency r e p o r t s and memoranda, agency f i l e s , d ire c to rie s . Th ro ug ho ut t h e t h r e e - y e a r pr oc es s o f e x p l o r a t o r y research, a sequence o f d e c i s i o n s narro wed t h e scope o f t h e s t u d y fr o m t h e g e n e r a l g o a l s and g u i d e l i n e s o f methods. r e s e a r c h c h a r g e t o s p e c i f i c o b j e c t i v e s and At t h e o u t s e t o f t h i s n a r r o w i n g pr oc e s s t h a t no s i n g l e s t u d y ( i n regional the le v e l) i t was q u i t e o b v i o u s p a r t i c u l a r one a t t h e s t a t e and s u b - s t a t e c o u l d hope t o e v a l u a t e t h e i n c i d e n c e and m a g ni tu de 223 o f t h e v a r i o u s k in d s o f economic impacts bro ught about by p o l i c i e s and programs a d m i n i s t e r e d o r c o o r d i n a t e d by t h e M ic h ig a n Wat er Resources Commission. But I t was f a r from obvi ous a t t h e o u t s e t as t o j u s t which p a r t i c u l a r p o l i c i e s and programs, t e c h n o l o g i c respo nse s, economic Impacts, and r e s e a r c h methods e i t h e r could o r should f a i l p u rv ie w o f t h i s s t u d y . the The im p o rt a n t t a s k o f e x p l o r a t o r y r e s e a r c h was, then, to a r r i v e a t f i n a l s p ecific p o lic le s , w ithin o b j e c t i v e s and methods t h a t p e r t a i n e d t o programs, Many s e p a r a t e y e t responses, im pac ts , and methods. r e l a t e d dec I s I o n s were r e q u I red when narro wing t o t h e s p e c i f i c o b j e c t i v e s and methods r e p o r t e d by t h i s d i s s e r t a t i o n . Each d e c i s i o n was guided and i n f l u e n c e d by s e v e r a l c r i t e r i a o f c h o i c e . These c r i t e r i a came i n t o being as i n t e r v i e w s were conducted and t h e l i t e r a t u r e was searched d u r i n g t h e summer and f a l l of 1968. O b je c t ives C hap te r III and c e r t a i n unpublished m a n u s c ri p ts l i s t e d Appendix A p r o v i d e d e t a i l s o f c r i t e r i a in o f c h o i c e and t h e s e q u e n t i a l d e c i s i o n s made d u r i n g e x p l o r a t o r y r e s e a r c h . Suffice summary t h a t t h e long process o f e x p l o r a t o r y r e s e a r c h ended w i t h t h e formal s ta te m e n t o f f o u r study o b j e c t i v e s . ob jectives pertain study, The f i r s t t o say in t h i s t h r e e o f thes e t o th e s p e c i f i c kind s o f economic e f f e c t s s t a n d in g a l o n e , was b e l i e v e d c a p a b le o f objective called it f o r a study t h a t coul d o f manufacturing establishm ents located in d ic a tin g . that this The f i r s t I d e n t i f y which s i z e s and types in d i f f e r e n t re g io n s t h ro ug ho u t Michigan stood t o p o t e n t i a l l y bear t h e b r u n t o f t h e a d v e rs e e f f e c t s t h a t would r e s u l t from any s t r i c t enforcement o f r e g u l a t o r y c o n t r o l s . 22k The second and t h i r d o b j e c t i v e s r e q u i r e d t h i s sizes, c la s s if ic a t io n s , plants w ith in and r e g i o n a l s t u d y to lo c a tio n s o f manufacturing t h e s t a t e had a c t u a l l y been a b l e t o g a i n t h e b e n e f i c i a l e f f e c t s o f s e l e c t e d su bs id y and t a x exemption programs. objective d iffe re d ju st I d e n t i f y which from t h e f i r s t The f o u r t h t h r e e o b j e c t i v e s by l o o k i n g beyond t h e p a r t i c u l a r economic e f f e c t s whose In c i d e n c e has been e s t i m a t e d in t h i s s t u d y . o f th e q u i t e T h i s f o u r t h o b j e c t i v e was w r i t t e n w i t h an a p p r e c i a t i o n l i m i t e d amount o f knowledge t h a t this st udy has been a b l e to o r g a n i z e and r e p o r t about th e v a r i o u s k in d s o f economic e f f e c t s that r e s u l t from s t u d i e d p o l i c i e s and programs. thus led t h i s s tu d y t o be cond ucted and r e p o r t e d The f o u r t h o b j e c t i v e In a manner which would fo s te r the i n i t i a t i o n o f a l o n g - t e r m p l a n n i n g and r e s e a r c h process M ic h i g a n . Such a proce ss would s e rv e t h e purpose o f e n a b l i n g Michigan age nc ie s to a d m i n i s t e r and c o o r d i n a t e w a t e r p o l l u t i o n c o n t r o l in programs and economic development programs on t h e b a s i s o f much Improved knowledge about t h e s h o r t - r u n e f f i c i e n c y , d is trib u tio n a l impacts o f p o l i c i e s and programs such as those s e l e c t e d f o r st udy h e r e i n . kinds o f lo n g - r u n d e v e l o p m e n t a l , and Conceptual and t h e o r e t i c a l a s p e c t s o f th e s e t h r e e impacts have been re viewed d u r i n g e x p l o r a t o r y r e s e a r c h . And c o n s i d e r a t i o n has been g i v e n t o the kind s o f methods and d a t a t h a t would be r e q u i r e d to e m p ir ic a lly magnitude o f each o f t h e s e sequential i n d i c a t e both th e impa ct s. i n c i d e n c e and For numerous re a s o n s , however, d e c i s i o n s made d u r i n g e x p l o r a t o r y r e s e a r c h s t e e r e d this study c l e a r o f any a t t e m p t s on I t s own p a r t t o p r o v i d e any e m p i r i c a l l y based e s t i m a t e s o f a n y t h i n g bu t t h e beneficial effects. i n c i d e n c e o f c e r t a i n a d v e rs e and The f o u r t h o b j e c t i v e , t h e n , c a l l e d upon t h i s st ud y 225 to be a b l e to make recommendations about t h e k in d s o f f u t u r e and st ud y t h a t would e n a b l e M ic h i g a n a g e n c i e s t o dence and magnitude o f e f f i c i e n c y , research l e a r n about th e in c i­ d e v e l o p m e n t a l , and d i s t r i b u t i o n a l Impacts. H i g h l i g h t s o f Methods In troduction A b rie f review is now g i v e n o f th e r e s e a r c h framework and methods designed t o a c c o m p lis h t h e o b j e c t i v e s o f t h i s r e v i e w encompasses t h e s t r u c t u r a l operational f or m , study. T h is i n f o r m a t i o n a l c o n t e n t , and pro ce dur es o f t h e framework and methods. Some o f t h e more b a s i c assumptions and l i m i t a t i o n s o f s p e c i f i c methods a r e a l s o men­ tioned. Before tu rn in g to these m a tt e r s , however, a few comments a r e in o r d e r about c e r t a i n o b s e r v a t i o n s t h a t were noted and c e r t a i n hy p o t h e ­ ses t h a t were f o r m u l a t e d d u r i n g t h e c our se o f e x p l o r a t o r y r e s e a r c h . These o b s e r v a t i o n s and hypotheses l a r g e l y , but not e n t i r e l y , re la te to th e t e c h n o l o g i c responses o f m a n u f a c t u r i n g e s t a b l i s h m e n t s t o s t u d i e d p o l i c i e s and programs. C e r t a i n components o f th e framework have been used in c o n j u n c t i o n w i t h p a r t i c u l a r methods In o r d e r t o p r o ­ vide e m p irical embodiment to p r e v i o u s l y r e c o g n i z e d o b s e r v a t i o n s about the incidence o f e f f e c t s from r e g u l a t o r y p o l i c i e s and subs id y programs. O t h er a s p e c t s o f t h e framework have been employed a lo n g w i t h p a r t i c u l a r methods In o r d e r t o p r o v i d e th e b a s i s f o r s t a t i s t i c a l ses about th e program. in c i d e n c e o f e f f e c t s t e s t s o f hy p o t h e ­ from M i c h i g a n ' s t a x exemption 226 Observed Trends Some f i n d i n g s g l e a n e d from I n t e r v i e w s and t h e l i t e r a t u r e led to o b s e r v a t i o n s a bo u t a t r e n d w h ic h had been underway s i n c e t h e m id 1960s In s o u t h e r n M i c h i g a n and o t h e r U n it e d S t a t e s . These f i n d i n g s In d u s tria lize d revealed region s o f the that c e rta in ty pe s o f manufac­ t u r i n g p l a n t s were sending n o t i c e a b l y g r e a t e r p r o p o r t i o n s o f t h e i r e f f l u e n t discharges to p u b lic u t i l i t y waters. By so d o i n g t s e v e r a l sewers tec h n ic a l, instead o f to p u b lic l e g a l , economic, and p u b l i c r e l a t i o n s adv a nt a ge s o r b e n e f i t s c o u l d be g a i n e d . Not t h e th e s e a dv ant ag es o r b e n e f i t s a r e tho s e which o f t e n r e s u l t from t h e a b i l i t y o f manufacturers to w ith o f f i c i a l s (2) (1 ) bargain over r e g u la t o r y requirements from m u n i c i p a l i t i e s reduce c o s t s because r a t h e r instead o f s t a t e a g e n c ie s , substantial in t h e c o n s t r u c t i o n and o p e r a t i o n o f in dustrial t r e a t m e n t w o r k s , and l e a s t among (3) economies o f s c a l e e x i s t la r g e municipal gain s t i l l or m u n i c i p a l - f u r t h e r cost savi ngs because m u n i c i p a l i t i e s have g e n e r a l l y passed a lo n g t o c u s t o m e r s , v i a a rtific ia lly low sewer s e r v i c e c h a r g e s , c os ts p a i d by s u b s i d i e s from f e d e r a l th a t p o rtio n o f construction and s t a t e programs. An i m p o r t a n t f i n d i n g o f e x p l o r a t o r y r e s e a r c h was t h a t o n l y c e r t a i n k i n d s o f m a n u f a c t u r i n g p l a n t s wer e p a r t i c i p a t i n g s a id t r e n d . Not a l l c ould have j o i n e d sizes, c la s s if ic a t io n s , in t h i s G e n e ra lly speaking, t r e n d even such p l a n t s if in t h e a f o r e ­ and l o c a t i o n s o f p l a n t s t h e y would have l i k e d to. i n c l u d e t h o s e whose w a s t e w a t e r d i s ­ charges a r e e i t h e r too t o x i c o r to o vol uminous t o p e r m i t t h e i r d i s c h a r g e into p u b lic u t i l i t y sewers wh ich e x t e n d outward treatm ent f a c i l i t i e s . from l o c a l pu blic More p r e c i s e l y , m a n u f a c t u r i n g p l a n t s u n a b l e t o * take p a r t In t h e a f o r e s a i d t r e n d a r e most l i k e l y located o u ts id e o f t h e g e o g r a p h i c a r e a serv ed by sewers co nn ect ed t o t h e l a r g e r p u b l i c t r e a t m e n t w o rk s , o r t h o s e works which r e c e i v e w a s t e w a t e r s from a t 1 0 ,0 0 0 p e r s on s . Furthermore, such p l a n t s a r e most l a r g e volumes o f w a s t e w a t e r s . to discharge Th us , t h e y tend t o be in c l u d e d w i t h i n th e l a r g e r e m p l o y m e n t - s i z e c a t e g o r i e s . w ithin lik e ly least They a r e a l s o found most o f t e n i n d u s t r i e s whose w a s t e w a t e r s t y p i c a l l y c o n t a i n w a s t e l o a d s t h a t are to x ic to secondary, o r b i o l o g i c a l , o f do me s tic w a s t e s . To summarize, proc e s se s used then, in t h e t r e a t m e n t e x p l o r a t o r y r e s e a r c h le d t o o b s e r v a t i o n s about t h e p a r t i c u l a r s i z e s , c l a s s i f i c a t i o n s , and l o c a t i o n s o f m a n u f a c t u r i n g e s t a b l i s h m e n t s w h ic h wer e n o t as a b l e as o t h e r s were to make use o f p u b l i c f a c i l i t i e s subsidy programs. c a t e g o r i e s , and those (3) (1) th os e l o c a t e d away from t h e l a r g e r included w i t h i n th o s e the included w i t h i n produce w a s t e l o a d s t h a t up se t b i o l o g i c a l versely s ta te d , small p r o p o r ­ k in d s o f p l a n t s were a b l e t o d i s c h a r g e t h e i r w a s t e w a te r s to p u b l i c works: (2) from s t u d i e d These o b s e r v a t i o n s h e ld t h a t r e l a t i v e l y tions o f the fo llo w in g p u b lic works, and t h e r e b y t o b e n e f i t l a r g e r employment-size i n d u s t r i e s wh ich t y p i c a l l y treatm en t processes. t h e s e o b s e r v a t i o n s wer e t o t h e e f f e c t large proportions o f establishm ents w ith in that r e la t ively the th re e aforementioned groups e m i t t e d w a s t e w a t e r s t h a t were s e n t d i r e c t l y and , c o n s e q u e n t l y , were s u b j e c t Con­ to the d i r e c t to p u b lic waters re gulatory controls of the M ic h i g a n Water Resources Commission. Ch oi ce o f Impact Subgroups Research designed t o a c h i e v e th e f i r s t study was s t r u c t u r e d two o b j e c t i v e s o f t h i s so as t o p e r m i t t h e e s t i m a t i o n o f a c t u a l l y e x i s t i n g magnitudes o f t h e a f o r e m e n t i o n e d p r o p o r t i o n s . Impact subgroups and d a t a Incorporated that.sent sewers. to (3) The r e g i o n a l and l o c a t i o n s o f e s t a b l i s h m e n t s (1) impact subgroups o f t h i s st ud y t hus wer e chosen the e n t i r e state, s e p a r a t e groups o f a l l In M i c h i g a n . Each o f in dustrial in dustries, (2) seven w a te r sh ed r e g i o n s , and the m e tr o p o lita n or nonm etropolitan counties th e s e r e g i o n a l subgroups was then d i v i d e d impact subgroups. s e p a r a t e t w o - d i g i t Standard These l a t t e r In d u strial in d u stries w ith in include (1) Into eighteen C l a s s i f i c a t i o n s o f manufacturing i n c l u d i n g th e food p r o c e s s i n g c la ssificatio n s of and ( 3 ) to d e p i c t the p ro p o rtio n s t h e i r discharges e i t h e r to p u b lic waters or to p u b lic u t i l i t y include s e ve r a l the I n t o t h e r e s e a r c h framework were s e l e c t e d on t h e b a s i s o f t h e i r a b i l i t y of various s iz e s , c l a s s i f i c a t i o n s , In o t h e r w o r d s , Industry, (2) t h e food p r o c e s s i n g t h r e e broad c a t e g o r i e s o f t h e e i g h t e e n t w o - d i g i t fiv e d iffe re n t in dustry, in d u stries, - These l a t t e r c a t e g o r i e s were based upon t h e volume o f w a t e r used by in dustries, th e number o f p l a n t s w i t h i n charges d i r e c t l y in d u s trie s th a t em itted d is ­ i n t o p u b l i c w a t e r s , and wheth er nondura ble o r d u r a b l e goods. each o f t h e a f o r e m e n t i o n e d F in a lly , in d u strial i n d u s t r i e s produced t h e framework o f r e s e a r c h d i v i d e d subgroups i n t o f o u r employment- size c a te g o rie s . Kinds o f Data C o l l e c t e d and Analyzed Two s e t s o f d a t a were c o l l e c t e d and o r g a n i z e d on t h e b a s i s o f th e above framework o f set impact subgroups and s i z e c a t e g o r i e s . In cl ud e d d a t a o b t a i n e d from f e d e r a l One census r e p o r t s and reco rds kept by th e M ic hi ga n Employment S e c u r i t y Commission. This data p e r t a i n e d t o both th e t o t a l the t o t a l number o f employees w i t h i n each o f t h e r e g i o n a l Impact subgroups r e f e r r e d data a l s o number o f m a n u f a c t u r i n g e s t a b l i s h m e n t s and In cl ud e d t o above. In a d d i t i o n , i n f o r m a t i o n about t h e t o t a l this firs t o f e s t a b l i s h m e n t s and employees w i t h i n gories. T h i s second s e t , set of number o f e s t a b l i s h m e n t s w i t h i n each e m p lo y m e n t - s iz e c a t e g o r y o f each i n d u s t r i a l second s e t o f d a t a was a l s o comprised o f and I n d u s t r i a l subgroup. The i n f o r m a t i o n about t h e number the same subgroups and c a t e ­ however, o n l y p e r t a i n e d to i n f o r m a t i o n about the A38 m a n u f a c t u r in g e s t a b l i s h m e n t s w i t h i n M ich ig an t h a t sent t h e i r w a s te w a te r d i s c h a r g e s d i r e c t l y second s e t o n l y r e f e r r e d were s u b j e c t to p u b l i c w a t e r s In 1968. Th us, this t o those p l a n t s t h a t e m i t t e d d i s c h a r g e s t h a t to t h e d i r e c t r e g u l a t o r y c o n t r o l s o f the M ich ig an Water Resources Commission. I n f o r m a t i o n about th e ^38 p l a n t s was re corded p r i m a r i l y from file s and records o f t h e commission and from i n d u s t r i a l r e f e r e n c e books. Each o f th e s e *138 p l a n t s was c l a s s i f i e d a p p ro p ria te regional and i n d u s t r i a l e m p lo y m e n t - s iz e c a t e g o r y . the t o t a l d i r e c t o r i e s and Impact subgroups and into i n t o an Employment t o t a l s were then c a l c u l a t e d number o f th e s e ^38 p l a n t s which had been p la c e d r e g i o n a l and i n d u s t r i a l its for into various impact subgroups. From th e two above s e t s o f d a t a , a s i n g l e s e r i e s o f per c en ta g es was c a l c u l a t e d and r e p o r t e d represent In T a b l e s 3 through 5- These p e r c en t ag es th e a pp r o x im a t e p r o p o r t i o n s o f m a n u f a c t u r i n g p l a n t s w i t h i n each impact subgroup and s i z e c a t e g o r y which d i s c h a r g e d t h e i r w a s te ­ waters d i r e c t l y into public waters. These p e r c e n t a g e s thus served as e s t i m a t e s o f the p r o p o r t i o n s o f p l a n t s w i t h i n v a r i o u s subgroups and 230 c a t e g o r i e s which e m i t t e d d i s c h a r g e s t h a t were d i r e c t l y c o n t r o l l e d in 1968 by t h e M ich ig an Water Resources Commission. M o r e o v e r, port ed complements t o the se pe rc ent age s served t o in d ic a te the a p p ro x i­ mate p r o p o r t i o n s o f p l a n t s w i t h i n the unre­ th e same subgroups and c a t e g o r i e s which sent t h e i r e f f l u e n t d i s c h a r g e s t o p u b l i c u t i l i t y sewers. Study o f th e In c i d e n c e o f Adverse E f f e c t s From R e g u l a t o r y P o l i c i e s Under c e r t a i n a s s u m p tio ns , th e r e p o r t e d p e r c e n t a g e s and u n re ­ port ed complements o f p e rc en ta g es were r e s p e c t i v e l y used t o the p o t e n t i a l In c i d e n c e o f a d v e rs e e f f e c t s o f d i r e c t t o l s and th e a c t u a l programs. e f f e c t s o f s t u d i e d sub sid y In Michigan d is c h a r g e d a l l into p u b lic waters or of In to pu blic u t i l i t y t i o n was known t o d e v i a t e somewhat from r e a l i t y . ^ t h i s d e v i a t i o n was not c o n s id e re d s u b s t a n t i a l large e rro rs fic ia l r e g u l a t o r y con- The most b a s i c one o f th e s e assumptions was t h a t each m a n u f a c tu r in g p l a n t e ith e r Incidence o f b e n e f i c i a l In d ic a te In i n t e r p r e t a t i o n s o f th e i t s wastewaters sewers. T h i s assump­ But t h e de gr ee o f enough t o cause any i n c i d e n c e o f a d v e r s e o r bene­ e f f e c t s from t h e r e s p e c t i v e per c en ta g es o r t h e i r complements. Oth er assumptions a p p l i e d e i t h e r t o th e manner by which r e p o r t e d percen tag es were used as a means t o I n d i c a t e th e p o t e n t i a l o f adv ers e e f f e c t s o r t o th e manner o f of beneficial indicating in c i d e n c e the ac tual In c i d e n c e effects. ^Some small e s t a b l i s h m e n t s w i t h o r g a n i c d i s c h a r g e s e m i t them into s e p tic tanks. F u r t h e r m o r e , an a p p a r e n t l y l i m i t e d number o f t a r g e e s t a b l i s h m e n t s e m i t t e d some o f t h e i r e f f l u e n t s I n t o p u b l i c w a t e r s w h i l e o t h e r e f f l u e n t s were sen t t o p u b l i c u t i l i t y sewers. For i n s t a n c e , f i e l d i n t e r v i e w s r e v e a le d t h a t some c e r e a l p l a n t s a t B a t t l e Creek d i s c h a r g e d spent c o o l i n g w a t e r s t o t h e B a t t l e Creek R i v e r w h i l e w a s t e w a te r s from process o p e r a t i o n s were t r e a t e d in th e B a t t l e Creek w a s t e w a t e r c o n t r o l fac11Ity . 231 I n t e r p r e t a t i o n o f the p o te n tia l In c i d e n c e o f a d v e r s e e f f e c t s proceeded under t h e assumption t h a t a d i r e c t r e l a t i o n s h i p e x i s t s between th e magnitude o f r e p o r t e d p e r c e n t a g e f i g u r e s and t h e effects. T h i s r e l a t i o n s h i p could o n l y hold t r u e t i o n s , o r p r e m is e s , do not d i f f e r One o f th e s e premises if I n c i d e n c e o f such two f u r t h e r assump­ s u b s t a n t i a l l y from r e a l i t y . Is t h a t t h e b u l k o f t h e d i r e c t c os ts r e q u i r e d by t h e m a n u f a c t u r i n g s e c t o r t o meet any s t r i c t enf or ce me nt o f water p o l l u t i o n c o n tro l r e g u l a t i o n s would have t o be paid by those e s t a b l i s h m e n t s which e m i t t e d d i s c h a r g e s t h a t were d i r e c t l y c o n t r o l l e d by th e M ic h ig a n Wa ter Resources Commission. assumption m a i n t a i n s t h a t In o t h e r words, this t h e **38 p l a n t s whose d i s c h a r g e s were d i r e c t l y c o n t r o l l e d would have t o pay t h e b u l k o f th e s e d i r e c t c o s t s . s u r e , e s t a b l i s h m e n t s which used m u n i c i p a l to pay In cre as ed d i r e c t c o s t s charges as m u n i c i p a l i t i e s d ire c t controls. fa c ilitie s responded t o t h e enfor ce men t o f s t r i c t e r indicated sent t h e i r w a s te w a t e r s d i r e c t l y p e r - p l a n t and t o t a l would a l s o have in t h e form o f h i g h e r sewer s e r v i c e Notwithstanding t h i s f a c t , e x p lo r a to r y research To be that however, th e f i n d i n g s o f those m a n u f a c t u r i n g p l a n t s which i n t o p u b l i c w a t e r s w o ul d , on both a accumulative b a s is , have to be ar t h e b r u n t o f any d i r e c t c o s t s which would r e s u l t from such e n f o r c e m e n t . Under a second p r e m i s e , i t was f u r t h e r assumed t h a t those p l a n t s which e m i t t e d d i s c h a r g e s d i r e c t l y I n t o p u b l i c w a t e r s would a l s o have t o bear t h e b r u n t o f any a d v e rs e e f f e c t s from e n f o r c e m e n t . In e f f e c t , t h i s premise holds t h a t those impact subgroups wh ich re la tiv e ly larg e proportions o f plan ts w ith d i r e c t l y - c o n t r o l l e d in c l u d e dis­ charges would not o n l y have t o pay th e h i g h e r p e r - p l a n t d 1r e c t cos ts 232 but would a l s o have t h e i r p r o f i t fin a lly ent in a c t u a l i t y if T h is l a t t e r pr em ise p a t t e r n s among impact subgroups i n c i d e n c e o f r e l a t i v e l y hi g h d i r e c t c o s t payments were s i m i l a r to p a tte rn s gi ven reduced t h e most by t h e borne c o s t s o f c o n t r o l l i n g w a t e r p o l l u t i o n . could o n l y hold t r u e In th e positions in t h e incidence o f r e l a t i v e l y impact subgroup, however, these f i n a l in magnitude than th e o r i g i n a l l y costs would e i t h e r be g r e a t e r o r upon t h e b a l a n c e o f f a c t o r s hi gh f i n a l costs. c o s t s could be q u i t e d i f f e r ­ borne d i r e c t c o s t s . The f i n a l l e s s e r than th e d i r e c t c o s t s depending such as (1) th e e x t e n t to which d i f f e r e n t impact subgroups coul d pass d i r e c t c o s t s alo n g t o consumers, In c i d e n c e and magnitude o f i n d i r e c t c o s t s , and (3 ) magnitude o f any d i r e c t b e n e f i t s For any (2) the th e In c i d e n c e and r e c e i v e d from a s s i s t a n c e programs such as those s t u d i e d h e r e i n . Among t h e kind s o f economic e f f e c t s mentioned a bov e, study was o n l y a b l e to p r o v i d e e m p i r i c a l estim ates o f cost s t h a t m a jo r w a t e r - u s i n g m a n u f a c t u r i n g have had t o bear from F i s c a l o r d e r to a t t a i n in dustries Year 1969 through F i s c a l the water q u a l i t y goals set f o r t h I n t r a s t a t e w a t e r q u a l i t y s t a n d a r d s .^ this the d i r e c t in M ic hi ga n would Year 1973 in by i n t e r s t a t e and Standing a lo n e , however, thes e These e s t i m a t e s o f d i r e c t c o s t s a r e made in an un p u b li s h e d m anu sc rip t I d e n t i f i e d in Appendix A. E s t im a t e d c o s t s wer e a r r i v e d a t by p r o r a t i n g p r e v i o u s l y r e p o r t e d e s t i m a t e s o f d i r e c t c os ts f o r m a jo r m a n u f a c t u r in g i n d u s t r i e s a t t h e n a t i o n a l l e v e l down to t h e l e v e l o f Michigan i n d u s t r i e s . To a c e r t a i n e x t e n t , p r o r a t e d e s t i m a t e s could be compared w i t h a p p r o x i m a t i o n s o f th e needs o f v a r i o u s i n d u s t r i e s t o b rin g t h e i r t r e a t m e n t o r c o n t r o l o f w a s t e w a t e r s up t o t h e l e v e l s r e q u i r e d by stream and e f f l u e n t s t a n d a r d s . These w a s t e w a te r c o n t r o l needs were d e s c r i b e d in two d i f f e r e n t ways. One noted t h e p r o p o r t i o n s o f p l a n t s w i t h i n v a r i o u s i n d u s t r i a l impact subgroups whose d i s c h a r g e s I n t o p u b l i c w a t e r s in 1968 had been r a t e d by commission e n g i n e e r s as having r e c e i v e d c o m p l e t e l y a d e q u a t e , 1e s s - t h a n - a d e q u a t e , o r c o m p l e t e l y 233 estim ates a re subject to several study could no t g i v e e m p i r i c a l l i m i t a t i o n s which e x i s t because t h i s e s t i m a t e s o f t h e e x t e n t t o which t h e p r o f i t p o s itio n s o f manufacturing p l a n t s , f i r m s , and I n d u s t r i e s would have been changed by t h e f i n a l perhaps benefits) o f such e n f o r c e m e n t . approach was used to effects and costs (or, R e c o g n iz i n g t h e s e s h o r t c o m i n g s , a n o t h e r in d ic a te the p o te n ti a l t h a t mig ht have r e s u l t e d In some c a s e s , in t h e incidence o f adverse la te 1960s from t h e s t r i c t immediate e n fo r c e m e nt o f t h e com m is si on 's d i r e c t c o n t r o l s upon d i s ­ charges from m a n u f a c t u r i n g e s t a b l i s h m e n t s . T h i s o t h e r approach r e f e r s the t o employment as an i n d i c a t o r o f I n c i d e n c e and t h e m agn itu de o f d i r e c t a d v e r s e e f f e c t s In dustrial and r e g i o n a l re s e a r c h fr amewo rk. impact groups and subgroups included In t h e As mentioned above , d a t a was c o l l e c t e d on th e number o f persons t h a t worked f o r a l l emitted discharges d i r e c t l y bu t a few o f in to pu b lic waters employment d a t a was summed so as t o r e v e a l t h e ^38 p l a n t s which in 1968. the t o t a l ina d eq ua te w a s t e w a t e r c o n t r o l ratings This p e r - p l a n t employment o f a l l those p l a n t s which e m i t t e d d i s c h a r g e s a s s ig n e d a d e q u a t e , adequate, or upon the less-than- in 1968. These Inad equ ate c o n t r o l . The o t h e r r e f e r r e d t o t h e 196^ and 1968 surveys o f w a t e r use in m a n u f a c t u r i n g t h a t were conducted by t h e U n i t e d S t a t e s Bureau o f t h e Census. These su rv ey s p r o v i d e i n f o r m a t i o n about t h e volumes o f w a s t e w a t e r s e m i t t e d by d i f f e r e n t i n d u s t r i e s t h a t had r e c e i v e d any t r e a t m e n t j u s t p r i o r t o th e t im e when st rea m and e f f l u e n t s t and ar ds went i n t o e f f e c t in M i c h i g a n . The a f o r e m e n t i o n e d e s t i m a t e s o f w a s t e w a t e r c o n t r o l needs, d i r e c t c o s t s , and p r o p o r t i o n s o f e s t a b l i s h m e n t s which e m i t t e d d i s c h a r g e s d i r e c t l y i n t o p u b l i c w a t e r s com prise u s e f u l I n f o r m a t i o n a bo u t t h e p o t e n ­ t i a l I n c i d e n c e o f a d v e r s e e f f e c t s o f s t r i c t l y e n f o r c e d r e g u l a t o r y con­ tro ls . Such i n f o r m a t i o n p r o v i d e s m e t h o d o l o g i c a l p ro c e du re s and a p o i n t o f r e f e r e n c e f o r f u t u r e s tu d y o f t h e f i n a l in c i d e n c e and m agn itu de o f adv ers e e f f e c t s t h a t m ig h t r e s u l t from t h e enf or c e me nt o f w a t e r p o l l u ­ t i o n c o n t r o l laws in M i c h i g a n . 231* summations were made a t both th e s t a t e and r e g i o n a l separate in d u strial sector. A )so mentioned above about t h e t o t a I regional level impact subgroup and f o r level the e n t i r e manufacturing is t h e f a c t t h a t d a t a was a l s o c o l l e c t e d employment in a l 1 m a n u f a c t u r i n g p l a n t s a t for th e s e same i n d u s t r i a l s e ts o f employment d a t a on hand, c ent age s o f t h e t o t a l f o r each subgroups. th e s t a t e and W i th th e s e two i t was p o s s i b l e t o c a l c u l a t e p e r ­ number o f w o rk e r s w i t h i n v a r i o u s impact groups and subgroups o f t h e r e s e a r c h framework which were employed by j u s t those e s t a b l i s h m e n t s t h a t e m i t t e d d i s c h a r g e s in to p u b lic waters th a t had been as si gn e d d i f f e r e n t a d e q u a c y - o f - w a s t e w a t e r - c o n t r o l ratings. S u b je c t to c e r t a i n assumptions and l i m i t a t i o n s , which a r e s p e l l e d o u t in Appendix G, t h e s e p e r c e n t a g e s have been used t o possible p o te n tia l a d v e rs e employment e f f e c t s . have been br ou ght about by t h e s t r i c t and those d i r e c t regulatory controls standards. Such e f f e c t s mig ht immediate e nfo rc em ent o f t h a t th e commission had pl aced upon m a n u f a c t u r in g d i s c h a r g e s j u s t p r i o r e fflu e n t i n d i c a t e th e w o r s t - t o t h e a d o p t i o n o f st rea m and I n t e r p r e t a t i o n o f t h e s e w o r s t - p o s s i b l e a d v e rs e e f f e c t s b a s i c a l l y assumes t h a t th o s e p l a n t s w h ic h e m i t t e d d i s c h a r g e s assigned c o m p l e t e l y ina d eq ua te o r Iess-than-adequate ra tin g s In 1968 would have been f o r c e d e n t i r e l y o u t o f bu sin es s because o f t h e m agni­ tude o f d i r e c t c o s t s were then r e q u i r e d t o a b i d e by e f f l u e n t re stric tio n s that In e f f e c t . Study o f t h e I n c i d e n c e o f B e n e f i c i a l E f f e c t s From S u b s i d ie s As mentioned above , e x i s t when th e p o t e n t i a l some r a t h e r s e v e r e lim ita tio n s apparently incidence o f adverse e f f e c t s from t h e i 235 enfo rc eme nt o f d i r e c t regulatory controls f i g u r e s r e p o r t e d by T a b l e s 3 t hr oug h 5 . because t h e Is I n t e r p r e t e d from p e r c e n t a g e These l i m i t a t i o n s resu lt i n t e r p r e t a t i o n o f a d v e rs e e f f e c t s has had t o proceed under t h e b a s ic assumption t h a t those impact subgroups t h a t in cl ud e d the g r e a t e r p r o p o r t i o n s o f p l a n t s which e m i t t e d w a s t e w a te r s d i r e c t l y I n t o p u b l i c w a t e r s would have been th e s e lf s a m e subgroups which stood t o w i t n e s s t h e g r e a t e r d i r e c t c o s t s and the g r e a t e r a d v e r s e e f f e c t s o f such e n f o r c e m e n t . L i m i t a t i o n s t h a t accompany t h i s b a s i c assumption a r e judged to be s e v e r e p r i m a r i l y because those p l a n t s , f i r m s , and i n d u s t r i e s which have to pay r e l a t i v e l y hi g h d i r e c t c o s t s a r e not ne ce s­ s a rily t h e same ones which have t h e i r p r o f i t The re a d e r w i l l re call p o s i t i o n s reduced th e most. t h a t u n r e p o r t e d complements t o t h e p e r ­ c ent age s g i v e n by T a b l e s 3 th ro ug h 5 have been used t o actual incidence o f b e n e f i c i a l effects i n d i c a t e the from s t u d i e d su bs id y programs. These u n r e p o r t e d complements seem t o a f f o r d much more r e l i a b l e e s t i m a t e s o f th e a c t u a l i n c i d e n c e o f such b e n e f i c i a l p e rc en ta g es a f f o r d o f t h e p o t e n t i a l adverse e f f e c t s . effects than t h e r e p o r t e d i n c i d e n c e o f th e a f o r e m e n t i o n e d To be s u r e , c e r t a i n assumptions have been r e q u i r e d In o r d e r to m a i n t a i n t h a t th os e Impact subgroups which in cl u d e d t h e g r e a t e r p r o p o r t i o n s o f p l a n t s which sent t h e i r d i s c h a r g e s t o p u b l i c f a c i l i t i e s were th e s e lf s a m e subgroups wh ich c o n t a i n e d t h e g r e a t e r shares o f p l a n t s which had ga in ed f i n a n c i a l B ut , as revi ewe d belo w, from s u b s i d i e s . the s e assumptions appear to correspond c l o s e l y w i t h th e s i t u a t i o n o f r e a l i t y . F u r t h e r m o r e , one o f th e s e assumptions could a c t u a l l y be put t o an e m p i r i c a l t h i s cor res pondence was. benefits t e s t which d e t e r m i n e s how c l o s e l y 236 In te rp re ta tio n o f b en eficial re lie d effects upon t h e f o l l o w i n g a s s u m p t io n s . that the v a s t m a j o r i t y o f m unicipal that took firs t Secondly, it has been assumed treatm ent f a c i l i t i e s in m a n u f a c t u r i n g w a s t e w a t e r s p r i o r a c t u a l l y been s u b s i d i z e d by a t grams. It from s u b s id y programs has in M i c h i g a n t o September o f l e a s t one o f t h e f e d e r a l has been assumed t h a t a l l or 1969 had s ta te pro­ o f th e m u n i c i p a l i t i e s which had r e c e i v e d any s u b s i d i e s d i d n o t r e c o v e r t h e s e s u b s i d i e s th r o u g h sewer s e r v ic e charges l e v i e d upon m a n u f a c t u r i n g customers o f t h e i r w a s t e w a t e r t r e a t m e n t wo rks . Oata c o l l e c t e d each o f t h e s t u d i e d exam ination o f re a lity . from a g e n c i e s w h ic h a d m i n i s t e r e d o r c o o r d i n a t e d s u b s i d y programs has p r o v i d e d t h e b a s i s f o r an th e d e g r e e to w h ic h t h e f i r s t T h i s s u p p le m e n t a r y d a t a has a l l o w e d the exact municipal o f th is data revealed towns w i t h g r e a t e r t o September o f found t h a t federal It o r s t a t e monies had sup p or ted in M ic h i g a n t h a t c o l l e c ­ t h e b u l k o f any w a s t e w a t e r s from m a n u f a c t u r i n g p l a n t s t h a t w e re s e n t t o p u b l i c u t i l i t y s e w e rs . fo llo w s from the f i n d i n g o f e x p l o r a t o r y portion o f E x a m i n a t io n 1 0 , 0 0 0 persons had n o t been s u b s i d i z e d . t h e c o n s t r u c t i o n o f most o f t h e p u b l i c works treated 1969. t h a t o n l y a few t r e a t m e n t works t h a t se rv e d than in o t h e r w o r d s , tiv e ly fo r a determ ination of t r e a t m e n t works whose c o n s t r u c t i o n c o s t s e i t h e r had o r had no t been s u b s i d i z e d p r i o r was, assu mpt ion a g r e e s w i t h This conclusion research t h a t such m a n u f a c t u r i n g wa s t e s wer e e m i t t e d works w h ic h served p l a c e s p o p u l a t e d w i t h g r e a t e r U n f o r t u n a t e l y , no such e m p i r i c a l lo g ic a lly the g r e a t e s t , In to p u b lic than 1 0 , 0 0 0 p e r s o n s . t e s t i n g c o u l d be made w i t h t h e second as su m p tio n g i v e n a b o v e . Y et, there treatm ent regard to Is good reason t o e x p e c t 237 fe w com m uni ti es d i d In f a c t recover t h a t p o rtio n o f the costs f a c i l i t i e s w h ic h had come from f e d e r a l September o f lo c a litie s or s t a t e sources. 19 69, no f e d e r a l o r M i c h i g a n r e g u l a t i o n s to re co ve r the sub s id ize d portions o f any such r e g u l a t i o n s and t h e e n f o r c e m e n t t h e r e o f , been l i t t l e in c e n tiv e f o r m unicipal charges a t a l e v e l which would o ffic ia ls to b u ild P rio r to required these c o s ts . Without t h e r e a pp e a r s t o have t o s e t sewer s e r v i c e r e c o v e r a n y t h i n g but t h e l o c a l l y borne s har e o f c o n s t r u c t i o n c o s t s . Study o f t h e I n c i d e n c e o f B e n e f i c i a l E f f e c t s From Tax Exemptions It i s r e a d i l y a p p a r e n t from t h e above t h a t a g e n e r a l framework has been u s e f u l in d ic a te the fic ia l this effects respect, s p e c i f i c methods de s ig n e d t o incidence o f c e r t a i n adverse e f f e c t s t i o n s and o f c e r t a i n a d d itio n , in s t r u c t u r i n g beneficial effects from e n f o r c e d from s u b s id y prog rams. fram ewo rk has been used t o s t u d y t h e from M i c h i g a n ' s research regula­ In i n c i d e n c e o f bene­ t a x e x em pt io n program. In t h i s la tte r t h e framework p r o v i d e d a p o p u l a t i o n o f m a n u f a c t u r i n g p l a n t s fo r four separate c hi-squ are t e s ts . s ta tis tic a lly subgroups s ig n ific a n t d ifferences These t e s t s i n d i c a t e w h e t h e r any e x i s t between c e r t a i n impact in t h e p r o p o r t i o n s o f p l a n t s w h ic h had r e c e i v e d an ex em pt io n p r i o r t o September o f 1969. Hypotheses we re d e v e lo p e d d u r i n g e x p l o r a t o r y r e s e a r c h t h a t s i g n i f i c a n t l y g r e a t e r sh a re s o f e s t a b l i s h m e n t s c o u n t i e s and applied in c l u d e d w i t h i n the in m e t r o p o l i t a n l a r g e r e m p l o y m e n t - s i z e c a t e g o r i e s had f o r and r e c e i v e d e x e m p t i o n s . r e s u l t s o f a study located These hy po the ses wer e based upon in W is c on si n and upon s t a t e m e n t s r e c e i v e d by t h e 238 autho r during f i e l d In terview s. F o r m u l a t i o n o f t h e s e hy po t h e se s p r i m a r i l y depended upon d i f f e r e n c e s no ted between m e t r o p o l i t a n and nonm etropolitan c o u n tie s in t h e a d m i n i s t r a t i o n o f p r o p e r t y t a x e s and between l a r g e p l a n t s and small t a x and a c c o u n t i n g tro lled in t h e c a p a b i l i t i e s o f t h e i r staffs. The p o p u l a t i o n o f 1*38 p l a n t s plants t h e c h i - s q u a r e t e s t s was com pr ise d o f t h e th a t em itted discharges In 1368 wh ich w e re d i r e c t l y con­ by t h e M i c h i g a n Wa ter Resources Commission. number o f 50 o f t h e s e p l a n t s had a p p l i e d c e rtific a te . Plants w ith in An obser ved f o r and r e c e i v e d an e x e m p t io n t h e e n t i r e p o p u l a t i o n and t h e o b s e r v e d number o f p l a n t s w h ic h had r e c e i v e d an e x e m p t i o n wer e d i v i d e d p ertin en t impact subgroups. From t h e s e d i v i s i o n s o f p l a n t s , into a deter­ m i n a t i o n has been made o f t h e number o f p l a n t s w i t h i n p a r t i c u l a r sub­ groups which w e re ob se rv ed n o t t o have r e c e i v e d an ex em pt io n p r i o r t o September o f 1963. The c o n t i n g e n c y t a b l e s stru ctu red i n . this.manner have p r o v i d e d t h e b a s i s f o r t e s t s o f hy po the ses wh ich p e r t a i n to ex pec te d d i f f e r e n c e s between m e t r o p o l i t a n and n o n m e t r o p o l i t a n c o u n t i e s and between th o s e e s t a b l i s h m e n t s w h ic h employed f e w e r t h a n 250 persons o r 250 and more p e r s o n s . structured ex is t tests Moreover, t h e s e c o n t i n g e n c y t a b l e s have t o d e t e r m i n e w h e t h e r any s i g n i f i c a n t d i f f e r e n c e s in sha re s o f p l a n t s t h a t had r e c e i v e d e x e m p t i o n s between t h e W a t e r - U s i n g N on du ra b le s and W a t e r - U s i n g D u r a b l e s c a t e g o r i e s and between th e n o r t h e r n m o s t f o u r and t h e south ernmo st t h r e e w at er she d reg io n s . As w i t h a n a l y s i s o f analysis o f the the incidence o f o th e r incidence o f b e n e f i c i a l effects k in d s o f e f f e c t s , from M i c h i g a n ' s t a x exemption program has a l s o been l i m i t e d by s p e c i f i c a s s u m p t i o n s . The b a s i c one o f control la tio n t h e s e as sum pt ions p e r t a i n s t o th e t y p e s o f w a t e r p o l l u t i o n t h a t wer e o p e r a t e d by t h e 388 p l a n t s w i t h i n t h e popu­ fa c ilitie s t h a t had no t y e t r e c e i v e d an e x e m p t i o n . tio n m aintains th a t a i l for. t h i s assump­ o f t h e s e 388 e s t a b l i s h m e n t s o p e r a t e d f a c i l i t i e s t h a t would have qual i f i e d applied In e f f e c t , f o r an ex em pt io n _Tf an ex emption had been W i t h t h e p o s s i b l e l i m i t a t i o n s o f t h i s assumption in min d , r e f o r m u l a t e d v e r s i o n s were c o n s t r u c t e d o f t h e c o n t i n g e n c y t a b l e s f o r each o f t h e o r i g i n a l was in c r e a s e d t o t a k e pending total chi-squ are tests. i n t o account some p l a n t s wh ich had exemptions in September o f I 969 . And b o th t h e o v e r a l l number o f p l a n t s w i t h i n v a r i o u s Such r e d u c t i o n s The ob se rv ed number o f 50 p l a n t s p o p u l a t i o n and t h e impact subgroups was re du ce d. In s e n s i t i v i t y a n a l y s e s were based upon known and e s t i ­ mated numbers o f e s t a b l i s h m e n t s which d i d not o p e r a t e t h e k in d s o f wastewater c o n tro l works t h a t q u a l i f i e d In a d d i t i o n chi-square t e s ts , to these o r i g i n a l the and r e f o r m u l a t e d v e r s i o n s o f Incidence o f b e n e f i c i a l t i o n s has a l s o been s t u d i e d manner. f o r an e x e m p t i o n . effects from t a x exemp­ in a n o n s t a t i s t i c a l , o r d e s c r i p t i v e , These n o n s t a t i s t i c a l procedures I n c l u d e an e x a m i n a t i o n o f t h e sizes, c la s s if ic a t io n s , and l o c a t i o n s o f e s t a b l i s h m e n t s which had r e c e i v e d exem ptio ns f o r self-operated wastewaters p r i o r to t h e i r d i s c h a r g e F u r t h e r m o r e , and w i t h exemption c e r t i f i c a t e , respect to a i l fa c ilitie s which p r e t r e a t e d into p u b lic u t i l i t y se wers. p l a n t s t h a t had a p p l i e d men tion has been made o f were p a r t o f e i t h e r m u l t i - p l a n t o r s t n g l e - p l a n t f o r an t h e p r o p o r t i o n which firm s. CHAPTER XI CONCLUSIONS Procedural The t a s k o f t h i s c h a p t e r Comments is t o summarize, in an i n t e g r a t i v e manner, m a j o r c o n c l u s i o n s drawn from f i n d i n g s o f methods des ign ed t o a ttain study o b j e c t i v e s . Inform ation is f i r s t has been l e a r n e d a b o u t t h e m a g n it u d e and state le v e l. s p ecific Th en , a to o k In d u s tria l incidence o f e f f e c t s is t a k e n a t t h e and r e g i o n a l a t th e in c i d e n c e o f e f f e c t s upon impact subgroups. This chapter o f conclusions o f methods des ig n e d t o r e v e a l p r e s e n t e d a bo u t what is n o t o n l y based upon t h e f i n d i n g s what c l a s s i f i c a t i o n s , s i z e s , and l o c a ­ t i o n s o f m a n u f a c t u r i n g p l a n t s e i t h e r have p o t e n t i a l l y stood t o bea r the b r u n t o f a d v e r s e e f f e c t s o r have a c t u a l l y ga in e d t h e most b e n e f i c i a l effects. Rather, th is chapter a ls o refers to inform ation resu ltin g from p r o c e d u r e s which supplement t h e f i n d i n g s o f b a s i c s t u d y methods. Some o f t h e s e p r o c e d u r e s have been ings In C h a p t e rs V I I , V IM , and included IX. m a n u s c r i p t s which p r e s e n t background economy and about m a n u f a c t u r i n g S till others are d e ta ile d in dustries Others a r e given in un p u b li s h e d I n f o r m a t i o n about M i c h i g a n ' s i n d u s t r i e s and wa te rs h ed r e g i o n s . in u n p u b l is h e d m a n u s c r i p t s which e s t i m a t e w a s t e w a t e r t r e a t m e n t needs and c o s t s turing r i g h t alo n g w i t h such f i n d ­ In M i c h i g a n . 2*t0 f o r v a r i o u s w a t e r - u s i n g manufac­ 241 The Ma gn it ud e o f E f f e c t s a t th e S t a t e Level Mag nitude o f Employment E f f e c t s The o n l y magnitude o f e f f e c t s t h a t t h i s s t u d y has e s t i m a t e d Is t h e number o f m a n u f a c t u r i n g employees which migh t have been l o s t In 1968 i f immedi­ t h e M i c h i g a n Water Resources Commission had s t r i c t l y and a t e l y enforced d i r e c t cha rg es e m i t t e d effects, r e g u la t o r y c o n tr o ls a g a in s t manufacturing d i s ­ in to public w aters. Oth er than th e s e employment t h e o n l y e s t i m a t e s t h a t even approach measuring t h e l e v e l o f a d v e rs e e f f e c t s a r e referred to the c o s t s e s t i m a t e d in Appendix A. in an un pu bl is he d m a n u s c ri p t T h i s m a n u s c ri p t p r o v i d e s e s t i m a t e s o f th e d i r e c t costs t h a t vario u s manufacturing expend between 1969 and 1973 I n d u s t r i e s would have had t o In o r d e r to a b i d e by stream s t a n d a r d s . The p r e v i o u s c h a p t e r has summarized s e v e r a l o f t h e reasons why these cos t e s t i m a t e s cannot s e rv e t o incidence o f p o te n tia l Yet, indicate e ith e r a d v e rs e e f f e c t s o f e n f o r c e d r e g u l a t o r y p o l i c i e s . t h e s e e s t i m a t e s c o u l d be u s e f u l as a f i r s t mation o f such a d v e rs e e f f e c t s s t e p toward t h e a p p r o x i ­ in subsequent s t u d i e s . Two o t h e r un p u b l is h e d works l i s t e d firs t t h e magnitude o r the in Appendix A t a k e s i m i t a r s te p s toward an e v a l u a t i o n o f th e l e v e l of beneficial t h a t had r e s u l t e d from s t u d i e d a s s i s t a n c e programs p r i o r 1969. These works r e p o r t allo cated in dustrial wastewater c o n tro l fa c ilitie s , to September, v a l u e o f s u b s i d i e s t h a t had been t o M ic h i g a n m u n i c i p a l i t i e s and th e t o t a l exemption c e r t i f i c a t e s . In d u strial th e t o t a l effects a c q u is itio n cost of f a c i l i t i e s which had been cov ere d by tax N e i t h e r t h e v a l u e o f s u b s i d i e s nor t h e c o s t o f however, in d ic a te the general level o f fin a n c ia l b e n e f i t s t h a t m a n u f a c t u r i n g e s t a b l i s h m e n t s have r e c e i v e d from s t u d i e d 2U1 a s s i s t a n c e programs. programs as w e l t B e n e fits t h a t manufacturers r e c e i v e from su bs id y as from M i c h i g a n ' s t a x exemption program t a k e th e form o f c o s t s a vin gs which n o r m a l l y a c c r u e o v e r a p e r i o d o f a t fifte e n years. Savings from s u b s i d i e s a c cr u e because t h e sewer s e r v i c e charges p a id by customers o f p u b l i c t r e a t m e n t works a r e c o n s i d e r a b l y lower than what t h e y would have o t h e r w i s e been required least t o r e c o v e r th e f u l l if l o c a l i t i e s were amount o f c o n s t r u c t i o n c o s t s . Most o f t h e s a v i n g s from t a x exemptions a c c r u e o v e r t h e y e ar s because manufac­ t u r e r s do not have to pay p r o p e r t y t a x e s on th e d e p r e c i a t e d v a l u e o f exempted f a c i l i t i e s . R e l a t i v e l y minor savings a l s o t a k e p l a c e a t the t i m e o f p u r c ha s in g those kind s o f f a c i l i t i e s which can be exempted from s a l e s o r use t a x e s . To r e c a p i t u l a t e , t h i s st ud y p r o v i d e s e s t i m a t e s o f t h e w o r s t - p o s s i b l e employment l o s s e s t h a t mig ht have r e s u l t e d regulatory c o n tro ls . The amount o f such lo ss e s Unpublished m a n u s c r i p t s a l s o p r e s e n t costs, o f program e f f e c t s . d e s c r i b e d h e r e i n and a t such v a l u e s . which is summarized s h o r t l y . i n f o r m a t i o n on t h e level of direct s u b s i d i e s , and t a x exemptions which co ul d h e l p s t r u c t u r e any subsequent s t u d i e s t h a t t r y level from e n f o r c e d to p l a c e m onetary v a l u e s upon t h e o v e r a l l Standing a lo n e , however, the research In un pu bl ish ed works has no t been a b l e t o a r r i v e Instead, th is r e s e a r c h has emphasized l e a r n i n g about Impact subgroups e i t h e r have o r could be most a f f e c t e d by t h e outcomes o f p o l i c i e s and programs. In 1968, a p p r o x i m a t e l y 5 1 , 5 0 0 persons in M ic hi ga n worked In 80 m a n u f a c t u r i n g e s t a b l i s h m e n t s wh ich p r o v id e d inad eq ua te c o n t r o l o f w a s t e w a t e r s d is c h a r g e d into pu blic w aters. The main in d icatio n of w o r s t - p o s s i b l e employment e f f e c t s has proceeded under t h e assumption t h a t d i r e c t c o s t s o f m eet in g s t r i c t l y and i m m e d ia t e ly e n f o r c e d regu­ l a t o r y p o l i c i e s would have f o r c e d a l l o f th e s e e s t a b l i s h m e n t s w i t h inadequately c o n t r o l le d discharges com pletely out o f business. t h i s a s s u m p t io n , t h e n , a l l have l o s t t h e ir jobs. o f th e a f o r e m e n t i o n e d 5 1 * 5 0 0 employees would These employees comprised 4 . 5 p e r c e n t o f th e 1 , 1 4 4 , 0 0 0 persons who worked in 1968. In th e m a n u f a c t u r i n g s e c t o r o f Michi gan These employees a l s o made up 1 . 6 p e r c e n t o f t h e 3 * 2 9 0 , 6 0 0 persons w i t h i n t h e s t a t e ' s These p o t e n t i a l total labor force employment when w a t e r q u a l i t y s t a n d a r d s f i r s t say 1971 o r 1972, then in t h a t same y e a r . losse s a p p l y to 1968, became o p e r a t i o n a l . employment and on w a s t e w a t e r c o n t r o l year, Under I f d a t a on r a t i n g s had a p p l i e d in ad eq ua te r a t i n g . generally s t r i c t e r T h i s e x p e c t a t i o n seems r e a s o n a b l e in l i g h t o f t h e r e q u ir e m e n t s br ou ght about by stream s t a n d a r d s . t u r i n g d i s c h a r g e s t o be pl ace d In t h i s in cre as ed share o f manufac­ I n t o th e c a t e g o r y which respect, w o r s t - p o s s i b l e employment lo sse s then, Indicated fo r enfor ce men t o f s t a n d a r d s .^ indicates th e p o t e n t i a l ma gnitude o f e s t i m a t e o f th e losse s t h a t would have o c c u r r e d the s t r i c t labor forces in e s t a b l i s h m e n t s whose d i s c h a r g e s were a s si gn e d an Such s t a n d a r d s have most l i k e l y caused an inad eq ua te c o n t r o l . to a l a t e r i t co ul d be e x pe c te d t h a t a somewhat g r e a t e r p e r c e n t a g e o f M i c h i g a n ' s m a n u f a c t u r i n g and t o t a l would have worked th e y e a r 1968 is a c o n s e r v a t i v e In l a t e r y e a r s from In a n o t h e r r e s p e c t , however, ^The p o t e n t i a l l e v e l o f w o r s t - p o s s i b l e employment lo sse s r e p o r t e d h e r e i n o n l y c o n s i d e r s those los s e s t h a t might have f a l l e n i n c i d e n t upon m a n u f a c t u r i n g e s t a b l i s h m e n t s whose d i r e c t c o s t s would have been s u b s t a n t i a l l y Incre as ed in o r d e r t o p r o v i d e a d e qu a te c o n t r o l 2W t h e employment e f f e c t s in j o b s t h a t cou ld from e n f o r c e m e n t o f subsequent y e a r s . indicated fo r 1968 have o v e r e s t i m a t e d any l o s s e s r e a s o n a b l y be e x p e c t e d t o have d i r e c t l y r e g u la to r y p o l i c i e s adm inistered The assu mpt ion t h a t a l l resu lted In 1968 and establishm ents w ith in in a d e ­ q u a t e l y c o n t r o l l e d w a s t e w a t e r s would be f o r c e d c o m p l e t e l y o u t o f busine ss by t h e d i r e c t c o s t s o f w a t e r p o l l u t i o n c o n t r o l overstatement o f actu ally the a c tu a l ta k en p l a c e * l e v e l o f employment This study, ho we ver , losses t h a t from t h e a c t u a l s itu a tio n . o f f e r e d any downward r e v i s i o n s p o s s i b l e employment l o s s e s . men dat ions a r e made Furthermore, R a t h e r t han t a k i n g chapter fo r s t u d i e s t h a t cou ld a r r i v e a t w o r s t - p o s s i b l e to a y e a r in t h e e a r l y to m id-1970s. per son nel who work on t h e s t a f f o f m is s io n o r f o r It in f a c t s tu d y has no t levels o f worst- th is course, recom­ th e con duct o f subsequent losse s t h a t a r e a p p l i c a b l e is a l s o suggested that t h e M ic h i g a n Wat er Resources Com­ t h e O f f i c e o f Economic Expansion o f Department o f Commerce p r o v i d e this in t h e a f o r e m e n t i o n e d in t h e f i n a l have has n o t p r o v i d e d any e s t i ­ mates o f t h e d e g r e e t o wh ich t h e s u b j e c t assumption has deviated is no doubt an th e M ic h i g a n t h e i r own downward r e v i s i o n s such updated v e r s i o n s o f w o r s t - p o s s i b l e e f f e c t s . in any These per son nel o f p re v io u s ly inadequately c o n tr o lle d discharges. No e s t i m a t e s have been made o f th e l e v e l o f any employment lo ss e s t h a t mig ht have f a l l e n i n c i d e n t upon m a n u f a c t u r i n g p l a n t s o r upon any o t h e r p r i v a t e e n t i t i e s as a r e s u l t o f t h e i n d i r e c t c o s t s t h a t ensue from d i r e c t costs. Because no i n d i r e c t employment l o s s e s have been e s t i m a t e d , a n o t h e r reason e x i s t s f o r ha v in g t h e d i r e c t c o s t e s t i m a t e s i n d i c a t e d h e r e i n t o be on th e c o n s e r v a t i v e s i d e . In t h e f i n a l a n a l y s i s , how­ e v e r , tho s e f a c t o r s which tend t o cause th e e s t i m a t e s t o be u n d e r ­ s t a t e m e n t s o f w o r s t - p o s s i b l e employment l o s s e s a r e most l i k e l y o u t ­ weighed by the o v e r s t a t e m e n t o f lo ss e s w h ic h no doubt r e s u l t s from t h e assumption t h a t a l l p l a n t s w i t h i n a d e q u a t e l y c o n t r o l l e d d i s c h a r g e s would have been f o r c e d t o shut down o p e r a t i o n s c o m p l e t e l y . 2lt5 m a i n t a i n d a y - t o - d a y c o n t a c t s w i t h M ic h i g a n m a n u f a c t u r e r s . t a c t s p r o v i d e them w i t h a b a s i s f o r making th e a c t u a l informed judgments about prop ortions o f establishm ents th a t a re o u t o f business by f a c t o r s which p o llu tio n control Such con­ in f a c t bei n g f o r c e d in c l u d e t h e c o s t s to meet e n f o r c e d regulatio ns. L e v e ls o f Cost E s t i m a t e s , S u b s i d i e s , and Exemptions As s t a t e d above , e s t i m a t e s o f d i r e c t c o s t s r e q u i r e d to meet stream s t and ar ds and a c t u a l amounts o f s u b s i d i e s and t a x exemptions d i s t r i b u t e d by a s s i s t a n c e programs should not be c o n s id e r e d as t i o n s o f t h e magnitude o f t o t a l programs. effects Nevertheless, a b r i e f such c o s t s , in dustries that c o s t e s t i m a t e s down t o M ic hi ga n in e s t i m a t e s o f $ 3 1 9 . 2 m i l l i o n and $ 3 2 7 . 6 then, a re the t o t a l r e q u i r e d from F i s c a l turin g I n t o the t o by subsequent r e s e a r c h e r s . e s t i m a t e s has r e s u l t e d These, research They p r o v i d e benchmark f i g u r e s A process o f p r o r a t i n g f e d e r a l m illio n . These summarizing remarks a r e t h e conduct o f f u r t h e r magnitude o f program e f f e c t s . could be r e f e r r e d from s t u d i e d p o l i c i e s and summary now f o l l o w s o f th e l e v e l o f s u b s i d i e s , and e x e m p t i o n s . intended t o f a c i l i t a t e indica­ d i r e c t c o s t s e s t i m a t e d t o be Year 1968 t hr ou g h F i s c a l Year in t h e s t a t e t o meet r e q u ir e m e n t s i n t e r s t a t e and i n t r a s t a t e w a t e r q u a l i t y s t a n d a r d s . 1973 f o r a l l Imposed by bo th Three components o f these c o s t s have a l s o been e s t i m a t e d by t h e p r o r a t i o n p r o c e s s . component c o s t s i n c l u d e about $175 m i l l i o n ance c o s t s , about $100 m i l l i o n manufac­ These in o p e r a t i o n and m a i n t e n ­ in c o s t s r e q u i r e d t o c o n s t r u c t f a c i l i t i e s in o r d e r t o reduce r e q u ir e m e n ts and meet gro wt h ne eds , and abo ut 2k 6 $50 m i l l i o n only t o r e p l a c e worn o u t f a c i l i t i e s . These c o s t e s t i m a t e s no t include estim ates o f the costs to c o n s tru c t, o p e r a te , m a in ta in , and r e p l a c e Rather, in - h o u s e f a c i l i t i e s they a ls o r e q u i r e d by m a n u f a c t u r e r s themselves. include estim ates o f the c o n s t r u c t io n , o p e r a t io n , and m a in te na nc e c o s t s t h a t a r e r e q u i r e d by t h a t component o f m u n i c i p a l fa c ilitie s which ha nd le s w a s t e w a t e r s establishm ents. These e s t i m a t e s , received it is from m a n u f a c t u r i n g im p o r t a n t t o n o t e , a r e no t reduced by an amount wh ich r e f l e c t s any s a v i n g s t h a t a r e a c c r u i n g m a n u f a c t u r e r s because t h e y have been a l l o w e d t o pay sewer s e r v i c e charges t h a t o n l y r e c o v e r t h e l o c a l l y p r o v id e d costs. Thus, p r o r a t i o n s o f t h e f e d e r a l the a c tu a l d i r e c t costs t h a t to s h a r e o f c o n s t r u c t ion e s tim ate s probably o v e r s t a t e th e m a n u f a c t u r i n g s e c t o r o f M ic h i g a n would have had to pay in o r d e r t o reduce r e q u i r e m e n t s and meet gr ow th needs by m i d - 1 9 7 3 * T h i s study has no t been a b l e to p l a c e any mon et ar y v a l u e s upon t h e c o s t s a vin gs m a n u f a c t u r e r s have r e c e i v e d and a r e s t i l l because f e d e r a l and M ic h i g a n monies have paid s u b s t a n t i a l t he t o t a l costs o f b u ild in g pu blic Yet, study has le a r n e d that p rio r this $180,2 m i l l i o n th e s t u d i e d lion had been a l l o c a t e d su bsidy programs.^ In g r a n t s and $i*.6 m i l l i o n receiving portions of t r e a t m e n t and c o l l e c t i o n wo rks . t o September o f 1969 a t o t a l to M ic h i g a n com munities from a l l T h is total fig u re of of includes $175*6 m i l ­ in loans which hel ped pay t h e c o s t s ^ D o l l a r v a l u e s o f g r a n t s and loans a r e s t a t e d In terms o f current d o lla r s . The t o t a l s and s u b t o t a l s g i v e n h e r e i n a r e summa­ t i o n s o f many g r a n t s and loans which a r e each express ed in t h e c u r r e n t v a l u e o f d o l l a r s f o r t h e y e a r in which t h e p r o j e c t s t o which th e y a p p l y wer e i n i t i a l l y a pp ro v e d. 247 of b u ild ing e ith e r t r e a t m e n t w o rk s , i n t e r c e p t o r s e w e rs , o r c o l l e c t i o n sewers. M a n u f a c t u r e r s a r e a b l e t o g a i n the most b e n e f i t s g r a n t s wh ich a r e g i v e n at least in s up p or t o f f a c i l i t i e s 1 0 , 0 0 0 p e r s on s . this size. A total the $175-6 m i l l i o n o f s e r v i n g communities o f o f $ 1 3 0 . 9 m i l l i o n was a l l o c a t e d o f which $ 4 8 . 6 m i l l i o n came from t h e f i r s t which s e r v e towns o f About t h r e e - f o u r t h s o f g r a n t s went toward t h e s u p p o r t o f f a c i l i t i e s came from f e d e r a l from those t o such f a c i l i t i e s , programs and $ 8 2 . 3 m i l l i o n two rounds o f a l l o c a t i o n under M i c h i g a n ' s bond program. By September o f been in o p e r a t i o n 1969, t h e M ic h ig a n t a x exemption program had f o r about t h r e e and o n e - h a l f y e a r s . exemption had by then been lishm ents. issued t o 69 s e p a r a t e m a n u f a c t u r i n g e s t a b - These c e r t i f i c a t e s a p p l i e d w o rt h o f w a s t e w a t e r c o n t r o l w a t e r s were sen t d i r e c t l y exempti ons on f a c i l i t i e s m illio n . to a t o t a l fa c ilitie s .* F ifty to p u b l i c w a t e r s o f $42.4 m i l l i o n p l a n t s whose w a s t e ­ in 1968 had r e c e i v e d w i t h a c q u i s i t i o n c o s t s amounting t o $ 3 1- 4 Anoth er n i n e t e e n p l a n t s had been exemption which covered f a c i l i t i e s th a t p r e t r e a t e d wastewaters p r i o r public u t i l i t y C e rtific a te s of w ith issued c e r t i f i c a t e s o f in itia l costs o f $ 11.0 m i l l i o n to t h e i r be in g d i s c h a r g e d into sewers. V a lu e s o f m a n u f a c t u r i n g f a c i l i t i e s exempted from t a x e s a r e expressed in terms o f c u r r e n t d o l l a r s . The t o t a l s and s u b t o t a l s g i v e n h e r e i n a r e summations o f th e o r i g i n a l a c q u i s i t i o n c o s t s o f many sepa­ r a te In d u s t r i a l wastewater co ntro l f a c i l i t i e s . These a c q u i s i t i o n c o s t s a r e e xpr ess ed in t h e v a lu e , o f d o l l a r s f o r t h e y e a r in which f a c i l i t i e s were purc ha se d. 248 The Incidence o f E f f e c t s a t t h e S t a t e Level E x p o s i t i o n s I Approach At the s t a t e m arized a c c o r d i n g le v e l, to t h e the fin d in g s o f t h is incidence o f e f f e c t s c la s s i f i c a t i o n s o f estab lishm ents, (3) broad in d u s tria l the p o t e n t i a l categ ories. a s s i s t a n c e programs. some background to M i c h i g a n ' s economy. Comments which f o l l o w a t t e n d t o from r e g u l a t o r y c o n t r o l s is rev ie w e d abo ut t h e T h i s background r e s e a r c h have f a l l e n The f o r t h c o m i n g upon, but no t r e s t r i c t e d inform ation a llo w s in dustries t h e subse­ to t h e e x t e n t which e f f e c t s i n c i d e n t upon i n d u s t r i e s which t o T a b l e 23 and F i g u r e 4 summary o f t h e to, incidence o f e f f e c t s in fo rm a tio n presented upon t h r e e s e t s o f broad these s e t s a r e p e r t i n e n t i s based in T a b l e 23 and incidence o f impact subgroups. Two o f to t h e t o p i c now a t hand because t h e y p e r t a i n incidence o f e f f e c t s at the s t a t e le v e l. r e f e r s t o m a n u f a c t u r i n g e s t a b l i s h m e n t s which 250 persons o r 250 o r more p e r s o n s . w ithin however, im po rta nce o f th e T a b l e 23 r e v i e w s m a jo r c o n c l u s i o n s about t h e studied e f f e c t s from Im p o r t a n t t o t h e s t a t e ' s economy. In tro d u c tio n Figure 4 . effects s p e c i f i c m anufacturing d i s c u s s i o n t o pay p a r t i c u l a r a t t e n t i o n are e s p e c i a l l y and P r i o r t o t h e s e summarizing s t a t e m e n t s , inform ation i n d i c a t e d by t h i s d i f f e r e n t size in d u stries, incidence o f b e n e f i c i a l e n t i r e m a n u f a c t u r i n g s e c t o r and o f to th e upon ( i ) s p e c ific incidence o f adverse e f f e c t s before tu rn in g to the a c tua l quent (2 ) r e s e a r c h can be sum­ One o f t h e s e two s e t s in 1968 employed l e s s than The second t h e W a t e r - U s i n g N ond ur ab les c a t e g o r y or includes estab lish m en ts th e W a t e r - U s i n g D ur ab le s TABLE 2 3 - "Sum m ary o f co n clu sio n s about th e in c id e n c e o f s tu d ie d e f f e c t s upon broad impact subgroups . 1 impact Subgroups P o ten tia l incidence o f Adverse E ffe c ts from D ire c t Regulatory Controls Actual Incidence o f B e n e fic ia l E ffe c ts from Subsidies Actual Incidence o f B e n e fic ia l E ffe c ts from Tax Exemptions Unresolved: Es tab li shments w ith less than 250 employees Lesser: Smaller percentage (2.1%) emit d i r e c t l y - c o n t r o l l e d d is ­ charges. G re a te r: Diseconomies o f small s iz e . G re a te r: Larger percentage (97.9%) emit discharges to p u b lic fa c iIitie s . S ig n ific a n tly Lesser: Chi-square t e s t s . Unresolved: Establishments w ith 250 o r more employees Lesser: Economies o f la rg e s iz e . G re a te r: Larger percentage ( 2 5 . 6%) emit d i r e c t l y - c o n t r o l l e d d i s ­ charges. Lesser: Smaller percentage (7*1.*i%) emit discharges to public f a c iIi t i es, S ig n ific a n tly G re a te r: Chi-square t e s t s . Establishments toca ted w ith in nonmetropolitan counties Greater: Larger percentage (6.7%) emit d i r e c t l y - c o n t r o l l e d d i s ­ charges. Lesser: Smaller percentage (93.3%) emit discharges to p u b lic fa c ilitie s . S ig n ific a n tly Lesser: Chi-square t e s t s . Estabt ishments located w it h in m etropolitan counties Lesser: Smaller percentage (1.8%) emit d i r e c t l y - c o n t r o l l e d d i s ­ charges. Greater: Larger percentage ( 9 8 . 2%) emit discharges to public fa c ilitie s . S ig n ific a n tly Greater: Chi-square t e s t s ; Establishments w it h in Water-Using Nondurables category G reater: Larger percentage (8.8%) emit d i r e c t l y - c o n t r o l l e d d is ­ charges. Lesser: Smaller percentage (91.2%) emit discharges to public f a c i 1i t i e s . Not S i g n i f i c a n t l y D iffe re n t: Chi-square t e s t s . Establishments w it h in Water-Using Durables category Lesser: Smaller percentage (2.5%) emit d i r e c t l y - c o n t r o l l e d d i s ­ charges. Greater: Larger percentage (97.5%) emit discharges to public fa c ilitie s . Not S i g n i f i c a n t l y D if f e r e n t : Chi-square t e s t s . a See te x t fo r explanatory comments. Pet. o f Establishments wi th D i r e c t l y - C o n t r o l l e d Discharges No. Em­ ployees METROPOLITAN COUNTIES 50 "i— 20-99 Nondurables 100-249 250+ 11.42 34.62 0.92 4.12 20.52 1 0 0 - 21*9 250+ Durables TOTAL MICHIGAN 20-99 100-249 250+ M 25.32 49.32 68.82 4.62 9.82 39.32 20-99 Nondurables 100-249 250+ 24.12 48.12 20-99 100-249 250 + 1.72 6.02 25.22 Durables 0 25 50 75 100 ,----- 1------1-----1 .n Nondurs. Durables T o t. Mfg. P /W x /V . 32.3% 23.12 23.02 Nondurs. Durables To t. Mfg. 67.52 35.82 42.22 Nondurs. v w / v / '/'v v q Durables To t. Mfg. 45.42 24.92 26.62 10.12 JO T Figure 4 . — Diagrammatic representation o f conclusions about the incidence o f e f f e c t s upon broad impact subgroups. (See t e x t f o r explanatory comments.) 250 NONMETROPOLITAN COUNTIES 20-99 Nondurables 100-249 250+ 100 —r 3.12 20-99 Durables 75 Pet. of Employment in Estab­ lishments wi th D i r e c t l y Controlled Discharges 251 category. The t h i r d o f establishm ents counties. after s e t o f subgroups mentioned by T a b l e 23 is comprised located w i t h i n m e tro p o lita n o r nonm etropolitan I n f o r m a t i o n about t h i s t h i r d th e upcoming summary o f set is reviewed im m e d ia te ly th e i n c i d e n c e o f e f f e c t s a t the s t a t e le v e l. The l e f t - h a n d column o f T a b l e 23 p r o v i d e s some g e n e r a l and ordinal i n d i c a t i o n s o f what t h i s st ud y has l e a r n e d about th e p o t e n t i a l inci de nc e o f ad v e rs e e f f e c t s . T a b l e 3 ** It T h is column p r i m a r i l y r e f e r s revi ews t h e p e r c e n t a g e o f m a n u f a c t u r i n g p l a n t s w i t h i n each member o f th e t h r e e a f o r e m e n t i o n e d s e t s o f em itted discharges impact subgroups which in 1968 t h a t were d i r e c t l y c o n t r o l l e d by th e M ic h i g a n Water Resources Commission. forth back t o 2 Based upon assumptions o r i g i n a l l y in Appendix G, comments g i v e n set in th e l e f t - h a n d column o f T a b l e 23 i d e n t i f y which impact subgroups stood to r e c e i v e e i t h e r g r e a t e r o r l e s s e r de gr ee s o f a d v e rs e e f f e c t s . a b l e to groups These comments a r e , in o t h e r words, i d e n t i f y the one member w i t h i n each p a i r o f broad which had th e l a r g e r (sm aller) impact sub­ percentage o f p lan ts w ith d i r e c t l y - c o n t r o l l e d d i s c h a r g e s and which c o n s e q u e n t l y stood t o w i t n e s s the g r e a t e r (lesser) adv ers e e f f e c t s from th e s t r i c t and immediate ^The two uppermost c e l l s w i t h i n t h i s column a l s o r e f e r back to i n f o r m a t i o n about economies o f s c a l e in the w a s te w a t e r c o n t r o l and t r e a t m e n t processes c a r r i e d ou t by m a n u f a c t u r i n g f i r m s and p l a n t s . 2 The pe rc en ta g e f i g u r e s r e p o r t e d w i t h i n p a r e n t h e s e s In t h i s column a r e e i t h e r taken from T a b l e 3 o r a r e c a l c u l a t e d from th e u n re po rte d raw d a t a used to com pil e t h a t d a t a . Only the p e r c e n ta g e o f e s t a b l i s h m e n t s w i t h le ss than 250 employees which e m i t t e d d i r e c t l y c o n t r o l l e d d i s c h a r g e s has had t o be c a l c u l a t e d from th e raw d a t a . 252 enfor ce men t o f c o n t r o l s upon m a n u f a c t u r i n g d i s c h a r g e s in to p u b ltc waters In 1 9 6 8 . 1 The m i d d l e column o f T a b l e 25 p r o v i d e s study has found o u t about t h e a c t u a l from s t u d i e d s u b s id y programs. i n d i c a t i o n s o f what t h i s incidence o f b e n e f i c i a l P e r ce nt a ge s r e p o r t e d w i t h i n effects th e c e l l s o f t h i s column a r e complements t o p e r c e n ta g e s r e p o r t e d w i t h i n c o r r e s ­ ponding c e l l s o f t h e l e f t - h a n d column. Therefore, percentage fig u r e s w i t h i n th e m id d le column a p p r o x im a t e t h e p r o p o r t i o n s o f p l a n t s w i t h i n broad sewers impact subgroups which s e nt t h e i r d i s c h a r g e s to p u b l i c u t i l i t y in 1568. ments w i t h i n Based upon assumptions s e t f o r t h t h e m i d d l e column o f T a b l e 23 i d e n t i f y which Impact subgroups have a c t u a l l y ga in ed e i t h e r g r e a t e r o r b e n e f i t s from s u b s i d i e s . These s t a t e m e n t s , (sm aller) impact subgroups p e r c e n t a g e o f p l a n t s which d i s c h a r g e d t h e i r w a s t e w a t e r s to p u b l i c works a c t u a l ly received the g r e a te r l e s s e r amounts o f in o t h e r words, a r e a b l e t o I d e n t i f y t h e one member w i t h i n each p a i r o f broad which had t h e l a r g e r in Appendix G, s t a t e ­ in 1968 and which c o n s e q u e n t l y had (lesser) amounts o f b e n e f i t s t h a t manu­ f a c t u r e r s have g a in e d from t h e s u b s i d i z a t i o n o f p u b l i c w a t e r p o l l u t i o n control f a c 11i t i e s . The r i g h t - h a n d column o f T a b l e 23 summarizes t h e r e s u l t s o f t h r e e o f the f o u r c h i - s q u a r e tests in clu ded c o n t i n g e n c y t a b l e s o f th e s e t e s t s r e f e r in Ch a pt e r IX . t o t h e same p a i r s o f The impact ^The r e l a t i v e de gr ee o f p o t e n t i a l a d v e rs e e f f e c t s upon p l a n t s w i t h i n t h e two broad e m p lo y m e n t- s iz e c l a s s i f i c a t i o n s is sa id t o be " u n r e s o l v e d . 11 T h i s term is used because opposing i n d i c a t i o n s o f th e degree o f such e f f e c t s a r e I n d i c a t e d by f i n d i n g s abou t economies o f s c a l e and about p e r c e n t a g e s o f p l a n t s which had d I r e c t l y - c o n t r o l l e d discharges. 253 subgroups t h a t a r e These t e s t s tis tic a lly listed down t h e l e f t - h a n d have been c a r r i e d o u t in o r d e r side o f to determ ine whether a s t a ­ s i g n i f i c a n t d i f f e r e n c e e x i s t s between t h e r e s p e c t i v e p a i r s o f subgroups in p r o p o r t i o n s o f p l a n t s which had a p p l i e d r e c e i v e d a c e r t i f i c a t e o f ex emption p r i o r to t h e r e s u l t s o f subgroup, when compared t o received"^ b e n e f i t s f o r and t o September o f r i g h t - h a n d column c l a s s i f i e s each member subgroup o f a c c o r d in g the t a b le .^ the c h i-s q u a r e tests. its counterpart, 2 I 969 . The th e s e p a i r s Thu s, each s e p a r a t e is s a i d t o have a c t u a l l y from t a x exem pti ons t h a t wer e e i t h e r " s i g n i f i c a n t l y g reater," " s ig n ific a n tly le s s e r , " o r "not s ig n ific a n tly d iffe re n t." Acco rding t o t h e as sum pt ion s g i v e n in C h a p t e r the se r e s u l t s in terms o f d i f f e r e n c e s (which a r e e x pr es s e d tions o f establishm ents) can be t a k e n t o IX and Appendix G, in d ic a te those subgroups which have been a b l e t o g a i n t h e g r e a t e r , in p r o p o r ­ impact l e s s e r , o r about The c o n t i n g e n c y t a b l e o f t h e f o u r t h t e s t r e f e r s t o t h e southernmost t h r e e and t h e no rt h e r n m o s t f o u r w a t e r s h e d r e g i o n s . The r e s u l t s o f t h i s f o u r t h t e s t i n d i c a t e t h a t no s i g n i f i c a n t d i f f e r e n c e e x i s t e d between t h i s p a i r o f subgroups in t h e p r o p o r t i o n o f p l a n t s which had a p p l i e d f o r and r e c e i v e d an ex em pt io n from M i c h i g a n ' s p r o ­ gram. 2 A c t u a l l y , each c h i - s q u a r e t e s t whose r e s u l t s a r e summarized by T a b l e 23 r e p r e s e n t s a s e t o f t h r e e t e s t s — an o r i g i n a l t e s t and two reform ulated v e rs io n s . The r e f o r m u l a t e d v e r s i o n s have had t h e i r con­ t i n g e n c y t a b l e s r e v i s e d in o r d e r t o run s e n s i t i v i t y a n a l y s e s f o r each test. None o f t h e s e r e f o r m u l a t e d v e r s i o n s , ho we ver , changed the r e s u l t s o f t h e o r i g i n a l f o r m u l a t i o n s o f each t e s t . 3 The o c c u r r e n c e o f b e n e f i t s from b o th s u b s i d i e s and t a x exemp­ t i o n s a r e spoken o f in the p a s t t e n s e in t h i s e x p l a n a t i o n o f T a b l e 23 and e l s e w h e r e in t h i s s t u d y . in r e a l i t y , ho we ver , t h e s e b e n e f i t s a r e s t i l l o c c u r r i n g as m a n u f a c t u r e r s a c c r u e c o s t s a v i n g s o v e r th e p e r i o d o f year s when t h e y can pay a r t i f i c i a l l y low sewer s e r v i c e charg es and avo id t h e payment o f c e r t a i n t a x e s . 25k equal amounts o f c o s t savings from not having t o pay t a x e s on i n d u s t r i a l wastewater c o n tro l works. ' T a b l e 23 does not d e p i c t a l l t o r y work which p e r t a i n t o th e No s i n g l e t a b l e can do t h a t . Th is f i g u r e t h e major f i n d i n g s o f t h i s e x p l o r a ­ Incidence o f e f f e c t s a t the s t a t e Figure k t th e r e fo re , Is comprised o f two v e r t i c a l charts depict to th e l e f t , supplements T a b l e 2 3 . s e r i e s o f bar c h a r t s . i n f o r m a t i o n about th e same broad r e g i o n a l impact subgroups r e f e r r e d t o by T a b l e 2 3 . le v e l. and These in dustrial Only th e column o f c h a r t s however, p r e s e n t s any i n f o r m a t i o n about e m p lo y m e n t -s iz e categories of establishm ents. A ll c a t e g o r i e s e x ce pt th e one which in clu de s e s t a b l i s h m e n t s w i t h from 1 to 19 employees a r e r e p r e s e n t e d by t h i s column. i n f o r m a t i o n summarized w i t h i n bears upon th e p o t e n t i a l regulatory c ontrols. actual the l e f t - h a n d column o f c h a r t s in c i d e n c e o f a d v e rs e e f f e c t s T h is column a l s o can be used to in c i d e n c e o f b e n e f i t s r e c e i v e d from s u b s i d i e s . column, however, o n l y p e r t a i n s to th e p o t e n t i a l from e n f o r c e d i n d i c a t e the The r i g h t - h a n d in c i d e n c e o f adv ers e employment e f f e c t s . The column o f charts e f f e c t , a much more v i v i d t o the l e f t o f F i g u r e k p r e s e n t s , in p i c t u r e o f comments p r e v i o u s l y summarized the l e f t - h a n d and m id d le columns o f T a b l e 23* in This s e rie s o f charts ^The p o p u l a t i o n o f m a n u f a c t u r in g e s t a b l i s h m e n t s r e f e r r e d t o in th e o r i g i n a l v e r s i o n s o f c h i - s q u a r e t e s t s Is no t as l a r g e as t h e popu­ l a t i o n o f e s t a b l i s h m e n t s which o r i g i n a l l y formed th e denominator o f f r a c t i o n s from which t h e per c en ta g es r e p o r t e d in t h e l e f t - h a n d and midd le columns have been c a l c u l a t e d . The p o p u l a t i o n o f th e s t a t i s t i c a l t e s t s o n l y has included the 1*38 p l a n t s which e m i t t e d d i r e c t l y - c o n t r o l l e d discharges. The p o p u l a t i o n upon which th e p e r c e n ta g e f i g u r e s have been based, however, in cl ud e s th e t o t a l number o f e s t a b l I s h m e n t s in Mich iga n w i t h i n each impact subgroup. 255 shows the v a r i o u s p r o p o r t i o n s o f p l a n t s w i t h i n d i f f e r e n t which e m i t t e d d i r e c t l y - c o n t r o l l e d d i s c h a r g e s t h e r e f o r e , approximate the e x te n t Commission e x e r t e d d i r e c t o f d i s c h a r g e s e m i t t e d by d i f f e r e n t Appendix G, a v e r y g e n e r a l These c h a r t s , to which t h e M ic h i g a n Water Resources regulatory control tio n s o f manufacturing p la n t s . in 1968 . subgroups sizes, over varying proportions c la s s ific a tio n s , and l o c a ­ A c c o rd in g t o as sumptions g i v e n notion o f the p o t e n t i a l in in c i d e n c e o f g r e a t e r and l e s s e r amounts o f a d v e r s e e f f e c t s can be deduced from th e l e n g t h o f bar s w i t h i n means o f d e p i c t i n g the l e f t - h a n d c o lu m n . T h i s column is a l s o a the approximate p ro p o rtio n s o f p la n ts w i t h i n v a rio u s subgroups wh ich e m i t t e d t h e i r d i s c h a r g e s The lo n g e r h o r i z o n t a l bar s w i t h i n in to p u b lic u t i l i t y t h i s column in dicate sewers. the le ss e r proportions o f p la n ts w ith in p a r t i c u l a r subgroups which sent d i s ­ charges t o p u b l i c c o l l e c t i o n and t r e a t m e n t w o r k s . lon ger a r e th e s e b a r s , w ithin p a r tic u la r Consequently, then t h e l e s s e r were th e p r o p o r t i o n s o f p l a n t s subgroups which had been a b l e from s u b s i d i e s o r i g i n a l l y a l l o c a t e d to g a i n a s s i s t a n c e to m u n i c i p a l i t i e s . The r i g h t - h a n d s e r i e s o f c h a r t s g i v e n in F i g u r e *1 com pr ise s a second means o f showing t h e e x t e n t o f t h e c o m m is s i o n 's d i r e c t to ry c o n tro l over d i f f e r e n t in d ic a te percentages o f t o t a l regional in d u strial were sen t d i r e c t l y sion's control worked f o r J u s t employees w i t h i n subgroups t h a t worked to p u b lic waters d ire c tly co n tro lled . This regula­ pro p o rtio n s o f m anufacturing disch arg es. These c h a r t s and the indicated in p l a n t s whose d i s c h a r g e s in 1968 and w e r e , th erefo re, i n f o r m a t i o n about t h e e x t e n t o f does not summarize p r o p o r t i o n s o f total th e commis­ employees t h a t those p l a n t s whose d i s c h a r g e s wer e a s s i g n e d In a d e q u a te 256 wastewater c o n tro l c h a r t s does not Hence, t h i s from s t r i c t l y and N evertheless, information th a t In 1968, in d Ic a te the p o te n tia l employment e f f e c t s controls. ratings this r i g h t - h a n d column o f incidence o f w o rs t-p o s s ib le im m e d ia t e ly e n f o r c e d r e g u l a t o r y s e r i e s o f bar c h a r t s does s e t f o r t h is q u i t e u s e f u l as a backdrop f o r t h e f o r t h c o m i n g summary o f f i n d i n g s about w o r s t - p o s s i b l e a d v e r s e employment e f f e c t s . The I n c i d e n c e o f E f f e c t s Upon D i f f e r e n t S iz e s o f P l a n t s Table 3 reveals th a t emitted discharges d i r e c t l y about 3 . 2 p e r c e n t o f a l l o n l y a small t h e ^38 m a n u f a c t u r i n g p l a n t s which in to p u b lic waters manufacturing p lan ts share o f a l l manufacturing p la n ts bear t h e a d v e r s e e f f e c t s o f any s t r i c t control regulatio ns. be m i s l e a d i n g in 1968 comprised o n l y in th e s t a t e . in M ic h ig a n stand t o e nfo rc em ent o f w a t e r p o l l u t i o n T h is s i n g l e f i g u r e o f 3 . 2 p e r c e n t , i f no t c o n s id e re d in i t s Obviously, proper c o n te x t. however, can Such a c o n t e x t is p ro v id ed by T a b l e 3 and by T a b l e 23 and F i g u r e k . W ith r e f e r e n c e t o t h e e n t i r e m a n u f a c t u r i n g sector o f Michigan, T a b l e 3 shows t h a t s u c c e s s i v e l y g r e a t e r e m p lo y m e n t - s iz e c a t e g o r i e s were found t o have had i n c r e a s i n g l y g r e a t e r p r o p o r t i o n s o f e s t a b l i s h ­ ments w i t h d i r e c t l y - c o n t r o l l e d d i s c h a r g e s . those p l a n t s which employed le s s c o n tro lle d discharges. Only 0 . 5 p e r c e n t o f a l l than 20 persons e m i t t e d d i r e c t l y - F u r t h e r m o r e , among t h e p l a n t s which employed from 20 to 99 persons o n l y 3 * 2 p e r c e n t se nt any d i s c h a r g e s d i r e c t l y into p u b lic w a te rs. C or res po ndin g p e r c e n t a g e s o f p l a n t s w i t h i n th e size c l a s s i f i c a t i o n s o f however, 100 to 2*»9 persons and 250 o r more pe r s o n s , stand a t 9 . 5 p e r c e n t and 2 5 * 6 p e r c e n t , re sp ectively. These 257 figures w ithin i n d i c a t e t h a t about o n e - t e n t h and o n e - f o u r t h o f a l l t h e two l a r g e s t s i z e c l a s s e s — t h e c l a s s e s which plants in c l u d e p l a n t s which employ th e g r e a t b u l k o f M i c h i g a n ' s m a n u f a c t u r i n g work f o r c e — emitted d i r e c t l y - c o n t r o l l e d discharges q u e n t l y , as F i g u r e workers in to p u b lic w a te rs. shows, about 27 p e r c e n t o f a l l Conse­ manufacturing tn the s t a t e were employed by the *<38 p l a n t s w i t h d i r e c t l y - c o n tro lle d discharges. The above r e v i e w r e v e a l s t h a t t h e s m a l l e r m a n u f a c t u r i n g p l a n t s In M ich ig an have g e n e r a l l y been a b l e t o a v o id th e d i r e c t regulatory a u t h o r i t y o f t h e commission by sending w a s t e w a t e r s t o p u b l i c u t i l i t y sewers. Thus, g r e a t e r shares o f p l a n t s w i t h i n each s u c c e s s i v e l y s m a l l e r e m p lo y m e n t - s iz e c a t e g o r y have been a b l e to reap t h e f i n a n c i a l savings from s t u d i e d subsidy programs. Ho such d e f i n i t e s t a t e m e n t , however, can be made w i t h r e f e r e n c e t o t h e p o t e n t i a l a dverse e f f e c t s from e n f o r c e d d i r e c t uppermost c e l l s w i t h i n this The two i n d i c a t e why Even though l e s s e r shares o f p l a n t s t h e s m a l l e r s i z e c a t e g o r i e s e m it d i s c h a r g e s t h a t a r e d i r e c t l y co n tro lled , t h e y a r e not t h e p l a n t s which have t h e i r co s ts per u n i t o f w a s t e lo a d s w i t h h e l d economies e x i s t lowered because o f economies o f s c a l e . in many i n d u s t r i a l w a s t e w a t e r c o n t r o l St at ed o t h e r w i s e , lik e ly regulatory c o n tro ls . th e l e f t - h a n d column o f T a b l e 23 lack o f c e r t a i n t y e x i s t s . w ithin in c i d e n c e o f Such a lte rn a tiv e s. t h e s m a l l e r m a n u f a c t u r i n g p l a n t s were found le s s to have sen t t h e i r wa s t e w a t e rs to p u b l i c w a t e r s . C o n s e q u e n tl y , they co ul d u s u a l l y t a k e advan tage o f c o s t s a vin gs t h a t r e s u l t because o f th e a r t i f i c i a l l y by s t u d i e d low sewer s e r v i c e charges t h a t have been a ll o w e d subsidy programs. N evertheless, thes e s m a l l e r p l a n t s coul d 258 not t a k e adv a nt a ge o f c o s t s a vi ng s t h a t e x i s t control tia l because o f economies o f s c a l e . incidence o f adverse e f f e c t s in i n d u s t r ia l wastewater On b a l a n c e , then, the poten­ from enfor ce men t o f d i r e c t c o n t r o l s upon d i s c h a r g e s from d i f f e r e n t regulatory sizes o f establishm ents remains u n r e s o l v e d . ^ F i n d i n g s a t th e s t a t e resolve the level incidence o f g r e a t e r o r have, however, been a b l e lesser b e n e fic ia l to effects that have a c t u a l l y been r e c e i v e d from s u b s i d i e s and from t a x ex emp tio ns . Greater proportions o f plan ts w ith in s i z e c a t e g o r i e s have d e f i n i t e l y s u c c e s s i v e l y s m a l l e r employment- been a b i e to b e n e f i t from s u b s i d i e s . The d i s c h a r g e s from s m a l l e r p l a n t s a r e g e n e r a l l y o f volume and can be handled by p u b l i c f a c i l i t i e s . sm aller manufacturing p la n ts most o f t e n from th e s t a t e ' s n ific a n tly re la tiv e ly low Nevertheless, the in M ic h ig a n c e r t a i n l y have not b e n e f i t e d t a x exemption program. Instead, a sig ­ l e s s e r p r o p o r t i o n o f those p l a n t s which e m i t t e d d i r e c t l y - c o n t r o l l e d d i s c h a r g e s and employed le s s than 250 worke rs had r e c e i v e d an exemption when compared w i t h t h e p r o p o r t i o n o f p l a n t s w i t h 250 o r more persons which had r e c e i v e d an ex em pt io n. F u r t h e r m o r e , among t h e 25 p l a n t s which had a p p l i e d f o r a c e r t i f i c a t e o f exemption on p r e t r e a t ­ ment w o rk s , o n l y 2 employed fewe r than 250 p e r s o n s . And o u t o f the ^ C o n v e r s e ly , g r e a t e r p e r c e n t a g e s o f l a r g e r m a n u f a c t u r i n g p l a n t s emit d i r e c t l y - c o n t r o l l e d d i s c h a r g e s I n t o p u b l i c w a t e r s . Therefore, they a r e not as a b l e to g a i n t h e c o s t savings t h a t a c c r u e from a r t i ­ f i c i a l l y low sewer s e r v i c e c h a r g e s , and they a r e more o f t e n fac ed w i t h th e d i r e c t c o s t s o f m eet in g t h e d i r e c t c o n t r o l s o f t h e commission. N e v e r t h e l e s s , t h e s e l a r g e r p l a n t s a r e t h e ones which w i t n e s s t h e c o s t r e d u c t i o n s t h a t come from th e a f o r e m e n t i o n e d s c a l e economies. Once a g a i n , t h e issue o f i n c i d e n c e o f g r e a t e r o r l e s s e r e f f e c t s from e nfo rc ed r e g u l a t o r y p o l i c i e s remains u n r e s o l v e d . 259 8** e s t a b l i s h m e n t s which had a p p l i e d f o r an exemption c e r t i f i c a t e to September o f p rio r 1969 f o r e i t h e r t r e a t m e n t o r p r e t r e a t m e n t works* o n l y 7 represented the s i n g l e - p l a n t o p e ra tio n o f a separate f i r m . These f i n d i n g s make i t c l e a r t h a t b e n e f i t s from M i c h i g a n ' s t a x exemption program p r i o r t o September o f by m u l t i - p l a n t f i r m s . 1969 had gone t o l a r g e p l a n t s o p e r a t e d Reasons f o r th is d is tr ib u tio n of benefits from t a x exemptions p r o b a b l y r e l a t e d to fa c to rs g r e a t e r awareness t h a t larg e, m u lti-p la n t th e s t a f f s o f such as t h e r e l a t i v e l y f i r m s have o f t a x laws plus the a b i l i t y o f t h e i r a c c o u n t a n t s and e n g i n e e r s to c a r r y through w i t h formal a p p licatio n s for t a x e x e m pt io ns . The in c i d e n c e o f E f f e c t s Upon Broad I n d u s t r i a l Subgroups W i t h i n the assumptions and l i m i t a t i o n s o f at th e s t a t e level have been a b l e t o r e s o l v e th e degrees o f a d v e rs e or b e n e f i c i a l c a t e g o r y sent d i s c h a r g e s plants w ith in plants w ith in i n d i c a t e two t h i n g s about th e W a te r- U s in g Nondurables c a t e g o r y r e c e i v e the g r e a t e r p o t e n t i a l s t r i c t l y enforced d i r e c t incidence o f varying that During t h a t same y e a r , th e W a t e r - U s i n g D u r a b le s These two p e r c e n t a g e incidence o f e f f e c t s . The is r e v e a l e d as having stood to in c i d e n c e o f a d v e r s e e f f e c t s regulatory c o n tro ls . from And t h i s c a t e g o r y is r e v e a le d as having o n l y been a b l e t o r e c e i v e th e l e s s e r amount o f b e neficial e f f e c t s from subsid y programs. In th e W a t e r - U s i n g Nondurables category emitted d i r e c t l y - c o n t r o l l e d discharges. fig ures findings Table 3 in d ic a te s into pu blic w aters. however, o n l y 2 . 5 p e r c e n t o f a l l study, e f f e c t s upon t h e W a t e r - U s i n g Nondura­ bl es and th e W a t e r- U s in g Du ra b le s c a t e g o r y . 1968 some 8 . 8 p e r c e n t o f a l l this The W a t e r - U s i n g D ur ab le s 260 c a t e g o r y , on t h e o t h e r hand, re cip ie n t o f th e a c t u a l I s shown t o have been th e p o t e n t i a l l e s s e r amounts o f a d v e r s e e f f e c t s from e n f o r c e m e n t s and r e c i p i e n t o f g r e a t e r b e n e f i t s from c o s t s a v i n g s made pos­ s i b l e by s u b s i d i e s . As F i g u r e k d e p i c t s , c o n t a in e d by f a r t h e W a t e r - U s i n g N ond ura bl es c a t e g o r y the g re a te r s ha r e o f p l a n t s w h ic h e m i t t e d d i r e c t l y - c o n t r o l l e d d i s c h a r g e s w i t h i n each r e s p e c t i v e one o f t h e t h r e e e m p lo y m e n t - s iz e c l a s s e s . control a r e no t ta ken brunt o f the direct Thus, I f economies o f s c a l e into account, this incidence o f adverse e f f e c t s r e g u l a t o r y c o n t r o l s m ig h t w e l l plants w ith in th e might have f a l l e n w i t h from s t r i c t have f a l l e n least e f f e c t s no doubt r e l a t e a t enforcement o f h a r d e s t upon least Underlying in th e p o t e n t i a l p a rtia lly to (1) sm aller p lan ts g e n e r a lly e m it, respect d is s im ila r enforcement reasons f o r in c i d e n c e o f a d v e r s e th e (2) lower volumes o f d ifferen ces a m e n a b ility o f va rio u s kinds o f wasteloads to trea tm e n t (3) the impact upon s m a l l e r s i z e s o f p l a n t s t he s e d i f f e r e n c e s among subgroups and that from any such s t r i c t t h e W a t e r - U s i n g D u r a b le s c a t e g o r y . that in d icate s At t h e o p p o s i t e e x t r e m e , when s c a l e economies are again d is r e g a rd e d , adverse e f f e c t s wastewaters in w a s t e w a t e r la r g e r employment-size c a teg o ry o f the Water-Using Nondurables subgroup. w ithin fig u re indicated patterns o f to t h e l o c a t i o n o f t h e lo catio n o f various la rg e r public in t h e in p u b l i c w o rk s , in dustries w ith treatm ent fa c ilitie s in Michigan. These same c a u s a l f a c t o r s no doubt h e l p e x p l a i n th e s i t u a t i o n d e p i c t e d by T a b l e 23 and F i g u r e A in which g r e a t e s t b e n e f i t s subsid y programs have a c t u a l l y f a l l e n from I n c i d e n t upon s m a l l e s t s i z e s o f 261 plants w ith in have f a l l e n t h e W a t e r - U s i n g D u r a b le s c a t e g o r y and l e a s t b e n e f i t s I n c i d e n t upon l a r g e s t p l a n t s w i t h i n durables categ ory. This p o in t t h e Watei— Using Non- Is e x p l a i n e d more c l e a r l y In t h e f o r t h c o m i n g s e c t i o n w h ic h summarizes d i f f e r e n c e s between t h e of effects in c i d e n c e between m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s . In terms o f t h e incidence o f b e n e f i c i a l effects from t a x e x e m p t i o n s , T a b l e 23 shows t h a t t h e r e s u l t s o f c h i - s q u a r e t e s t s have s i g n i f i c a n t d i f f e r e n c e between t h e two broad in d u s tria l proportions o f p la n ts w ith d i r e c t l y - c o n t r o l l e d i n d i c a t e d no categ ories in d i s c h a r g e s w h ic h had r e c e i v e d an e x e m p t i o n . What has been s a i d above about t h e a c t u a l fic ia l effects fr om a s s i s t a n c e programs upon t h e two i n d u s t r i a l subgroups has been based upon t h e most in c i d e n c e t h a t tia l in c i d e n c e o f bene­ th is re lia b le s t u d y has t o o f f e r . incidence o f adverse e f f e c t s When i t in dicators o f comes t o t h e p o t e n ­ between th e s e two su bg rou ps, a f o r e m e n t i o n e d comments can be supplemented by o t h e r F i n d i n g s about w o r s t - p o s s i b l e p o t e n t i a l s t r i c t l y enforced d i r e c t such however, in form ation. employment e f f e c t s from r e g u l a t o r y c o n t r o l s a r e most u s e f u l in t h i s respect. Figure shows t h a t in i n d u s t r i e s w i t h i n in 1968 abou t ^5 p e r c e n t o f a l l employees t h e W a t e r - U s i n g N on du ra b le s c a t e g o r y worked p l a n t s wh ich e m i t t e d d i r e c t l y - c o n t r o l l e d discharges. compares w i t h a c o r r e s p o n d i n g f i g u r e f o r t h e W a t e r - U s i n g D u r a b le s c a t e g o r y o f about 25 p e r c e n t . for Th is percentage These p e r c e n t a g e shares s e t t h e s t a g e i n d i c a t o r s o f p o t e n t i a l w o r s t - p o s s i b l e employment e f f e c t s , do not I n d i c a t e such e f f e c t s in themselves. The w o r s t - p o s s i b l e but t h e y in dicators 262 o n l y c o n s i d e r th e p e r c e n t o f a l l impact subgroups t h a t worked in ad eq ua te c o n t r o l employees w i t h i n v a r i o u s In j u s t in d u strial those p l a n t s which p r o v i d e d o f t h e i r e f f l u e n t discharges in 1968. T a b l e 6 has s e t f o r t h d a t a which a l l o w s t h e w o r s t - p o s s i b l e employment e f f e c t s of a ll t o be d e p i c t e d a t t h e s t a t e employees w i t h i n le v e l. th e W a t e r - U s i n g D u r a b le s c a t e g o r y worked p l a n t s w i t h d i s c h a r g e s assigned an E ( o r c o m p l e t e l y At the same t i m e , 10.5 percent o f a l l Nondurables subgroup found employment assigned t h e On ly 3 * 8 p e r c e n t inadequate) w o rk e r s w i t h i n in rating. the Water-Using in p l a n t s whose d i s c h a r g e s were ina d eq ua te r a t i n g . The P o t e n t i a l In c i d e n c e o f Adverse Employment E f f e c t s Upon S p e c i f i c I n d u s t r i e s A f o r e m e n t io n e d in d icato rs o f the p o t e n t i a l in c i d e n c e o f a d v e rs e e f f e c t s from e n f o r c e d c o n c lu s io n th e W a t e r - U s i n g Nondurables c a t e g o r y would have been that r e g u l a t o r y p o l i c i e s have a l l t he h a r d e s t h i t by such e f f e c t s . possible F i n d i n g s which r e v e a l e d le d to the the w o r s t - i n d i c a t o r s o f employment lo sse s a r e now summarized to d e p i c t t h e in c i d e n c e o f p o te n tT a 1 employment m anufacturing in dustries. T a b l e 24 r e f e r s t o th e same i n d u s t r i e s Appendix T a b l e J - l . ^ in o r d e r l o s s e s upon major that are re fe rre d The r i g h t - h a n d column o f T a b l e 24 r e p o r t s to by the *Appendix J examines t h e im portance o f t h e e n t i r e m a n u f a c t u r i n g s e c t o r and s p e c i f i c t w o - d i g i t m a n u f a c t u r i n g i n d u s t r i e s to M i c h i g a n ' s economy. i t a l s o r e f e r s t o t h e p r o p o r t i o n o f a l l s p e c i f i c p o i n t sources o f w a s t e w a te r s d i s c h a r g e d i n t o t h e s t a t e ' s p u b l i c w a t e r s In 1968 which o r i g i n a t e d from m a n u f a c t u r i n g p l a n t s . Appendix J is in e f f e c t a b r i e f synopsis o f d e t a i l e d background i n f o r m a t i o n pr e s e n t e d in un pu bl ish ed m a n u s c r i p t s r e f e r r e d to in Appendix A. 4 263 TABLE 2 4 . — F i n d i n g s about p o t e n t i a l w o r s t - p o s s i b l e employment e f f e c t s upon m a jo r w a t e r - u s i n g m a n u f a c t u r i n g i n d u s t r i e s . Leading i n d u s t r i e s w i t h i n Broad Categories SIC Employment in March, I968a (1) Employment in Estabs. w ith E-Rated D i scharges Percent Employment3 (2) (2 )/(t) Minor Wat er Users 25 27 Furn i t u r e P r i n t i n g £ p u b l is h l n g T o ta lb 22,171 29,531 0 0 0.0% 0.0 62,206 0 0.0% 51 .59 5 46,815 27,980 24,663 1 9 ,6 7 0 1,8 62 6,921 7,4 21 0 271 3.6% 14.8 26.5 0.0 1 .4 1 7 7, 6 62 1 8 ,5 7 8 10.5% 398,105 176,387 13 3, 8 73 97,206 46,909 9,887 0 1,68*1 16 ,1 5 0 5,200 2.5% 0.0 1 .3 1 6 .6 11.1 873,754 32 ,9 2 1 3-8% 1,143,988 51 ,499 4.5% Water--Using Nondurables 20 28 26 30 32 Food Chemicals Paper Rubber £ p l a s . , nec Stone, c l a y , £ glass T o t a 1b Water--Using Dur abl es 37 35 34 33 36 T r a n s p o r t , equipment N o n - e l e c . mach ine ry Fabricated metals Pr imary m e ta l s E l e c t r i c a l mach iner y T o ta lb T o t a l , E n t i r e manu­ factu ring sector0 From T a b l e 6 . Employment t o t a l s and p e r c e n t a g e f i g u r e s a p p l y t o t h e e n t i r e c a t e g o r y and no t to j u s t the i n d u s t r i e s in clu ded in t h i s t a b l e . £ Employment t o t a l s and p e r c e n t a g e f i g u r e s a p p l y t o t h e e n t i r e m a n u f a c t u r in g s e c t o r . The t o t a l employment f i g u r e f o r March, 1968, is g r e a t e r than th e sum o f t h e employment t o t a l s f o r th e t h r e e s e p a r a t e c a t e g o r i e s because t h e s e c a t e g o r i e s do not i n c l u d e the to b a c c o , a p p a r e l , and lumber i n d u s t r i e s . 26k p e r c e n t o f persons employed in each industry in March o f 1968 t h a t worked w i t h i n p l a n t s whose d i r e c t l y - c o n t r o i l e d d i s c h a r g e s r e c e i v e d inadeq uat e c o n t r o l . Based upon assumptions r e q u i r e d t a t i o n o f w o r s t - p o s s i b l e employment e f f e c t s , in t h e t h e paper In terpre­ i n d u s t r y would have been most s u s c e p t i b l e t o any employment losse s caused by the s t r i c t and immediate enforcement o f d i r e c t regulatory c o n tro ls . o n e - q u a r t e r o f t h e 2 7 , 9 8 0 persons employed worked f o r p l a n t s which p r o v id e d Oth er ma jor in th e paper i n d u s t r y Ina d eq ua te c o n t r o l of th e ir efflu e n ts . i n d u s t r i e s which would have been r e l a t i v e l y hard h i t by w o r s t - p o s s i b l e employment los s e s and e l e c t r i c a l tiv e ly , About in c l u d e th e p r i m a r y m e t a l s , c h e m i c a l s , m a chi ner y i n d u s t r i e s . had about one in e v e r y s i x , These t h r e e in d u stries, respec­ seven, and n i n e employees who worked f o r p l a n t s w i t h E - r a t e d d i s c h a r g e s . Table 2k is e s p e c i a l l y w i t h Appendix T a b l e J - l . trie s r e v e a l i n g when s t u d i e d The two most i n d i c a t e d by Appendix T a b l e J - l , in c o n j u n c t i o n im po rt a nt m a n u f a c t u r i n g indus­ th e t r a n s p o r t a t i o n equipment and n o n - e l e c t r i c a l m a ch in e ry i n d u s t r i e s , a r e not shown by T a b l e 2 k to be among t h e i n d u s t r i e s which stood t o s u f f e r t h e g r e a t e s t the w o r s t - p o s s i b l e employment l o s s e s . however, Notwithstanding t h i s some 9 , 8 8 7 worke rs were employed p o r t a t i o n equipment discharges in 1968. o f the t o t a l in c i d e n c e o f in p l a n t s w i t h i n i n d u s t r y which e m i t t e d fact, the tr a n s ­ inadequately c o n tro lle d A lt ho u gh the se w ork er s o n l y comprised 2 . 5 p e r c e n t employment w i t h i n t h e t r a n s p o r t a t i o n equipment industry, they comprised t h e second l a r g e s t group o f w o rk e r s w i t h i n any s i n g l e I n d u s t r y t h a t would have been f o r c e d ou t o f work employment losse s had a c t u a l l y m a t e r i a l i z e d . i f the w o rs t-p o s s ib le Only the p r im a r y m e t a l s 265 industry, with 1 6 , 1 5 0 persons employed in p l a n t s which e m i t t e d E - r a t e d d i s c h a r g e s , would have added a g r e a t e r number o f persons to unemployed ranks had assumptions o f the w o r s t - p o s s i b l e employment a n a l y s i s h e ld true in a c t u a l i t y . To summarize, t h e b e l l w e t h e r o f M i c h i g a n ' s economy, the t r a n s p o r t a t i o n equipment of Its i n d u s t r y , would have had o n l y 2 . 5 p e r c e n t t o t a l work f o r c e put o u t o f work I f losses had m a t e r i a l i z e d . t h e w o r s t - p o s s i b l e employment Y e t , o n l y th e p r i m a r y m e t a l s i n d u s t r y would have accounted f o r a g r e a t e r number o f persons w i t h i n t h e t o t a l o f 5 1 , ^ 9 9 persons who would have l o s t t h e i r Jobs If a ll plants with E -rated di s c h a r g e s had been f o r c e d c o m p l e t e l y o u t o f b u s i n e s s . The I n c i d e n c e Upon Ma jo r I n d u s t r i e s o f B e n e f i c i a l E f f e c t s From S u b s i d ie s T a b l e 25 d e p i c t s f i n d i n g s about t h e tr ie s o f b eneficial this effects i n c i d e n c e upon ma jor from s u b s i d i e s . The p e r c e n ta g e s g i v e n t a b l e a r e complements t o f i g u r e s o r i g i n a l l y through 5- The l e f t - h a n d and m id d le columns o f f i g u r e s w i t h i n l a r g e s t e m p lo y m e n t -s iz e c a t e g o r i e s o f The r i g h t - h a n d column sewers cate­ In 1968. in c l u d e s p e r c e n t s which e s t i m a t e t h e sha res o f plants w ith in e n t ir e i n d u s t r i e s and broad which made use o f p u b l i c t r e a t m e n t wo rks. those the two i n d u s t r i e s and I n d u s t r i a l g o r i e s which sent t h e i r d i s c h a r g e s t o p u b l i c u t i l i t y specified in r e p o r t e d by T a b l e s 3 Tab le 25 thus a r e e s t i m a t e s o f p r o p o r t i o n s o f p l a n t s w i t h i n a ll in du s­ in dustrial categories Under th e assumptions In Appendix G, t h e l a r g e r p e r c e n ta g e s o f T a b l e 25 I n d i c a t e in d u s tria l impact subgroups w i t h g r e a t e r p r o p o r t i o n s o f p l a n t s t h a t had a c t u a l l y b e n e f i t e d from s t u d i e d sub sid y programs. 266 TABLE 2 5 * - " F i n d i n g s about e s t i m a t e d p e r c e n t a g e s o f p l a n t s w i t h i n m a jo r w a t e r - u s i n g m a n u f a c t u r i n g i n d u s t r i e s wh ich had a c t u a l l y b e n e f i t e d from s u b s i d i e s . 3 SIC Leading I n d u s t r i e s w i t h i n Broad Categories E s t im a t e d P e rc e n t a g e s o f P l a n t s Which Sent D is c h a rg e s to P u b l i c U t i l i t y Sewers in 1968 -------- ■ ■ - ■ Plants w ith Plants w ith 100-2*49 250 o r More A il Plants Employees Employees Minor Water Users 25 27 Furn i t u r e P r in tin g & publishing Tota I b 100.0% 10 0 . 0 86.7% 10 0 . 0 99-3% 99.8 98.7% 91 . 9% 99.7% 69.1% 6b. 0 73.3 9 b .6 89.5 7b . b % 37.0 1*1.3 82.3 66.7 87.7% 91.9 81.1 97.8 75-9% 51.9% 91 .2% 98.5% 97. b 91.5 69.1% 8*4.2 82 .1 65.7 7*4.2 93.0% 99.3 96.9 92.3 96.7 Water -U s i n g Nondurables 20 28 26 30 32 Food Chem i c a 1s Paper Rubber & p l a s . , nec Stone, c l a y , & glass T o ta lb 98.2 Water- -Using D ur ab les 37 35 3*1 33 36 T r a n s p o r t , equipment N o n - e l e c . machinery Fabricated metals P r im a r y m e ta 1s E l e c t r i c a l mach ine ry 89.1 100.0 T o ta lb 9*4.0% 7*4.8% 97.5% T o t a l , E n t i r e manu­ factu ring secto r” 91 -5% 7*4.*4% 96.8% a Pe r c e n t a g e f i g u r e s w i t h i n t h i s centages g i v e n by T a b l e s 3 t hr ou g h 5- t a b l e a r e complements to p e r ­ F i g u r e s a p p l y t o th e p e r c e n t a g e o f p l a n t s w i t h i n t h e e n t i r e c a t e g o r y o r s e c t o r and no t t o j u s t t h e i n d u s t r i e s in c lu d e d in t h i s t a b l e . 267 I Se v er a l Table 25- summarizing p o i n t s can be made w i t h r e f e r e n c e to The l a r g e s t s i z e c a t e g o r y w i t h i n c h em ica ls I n d u s t r y c o n t a i n e d by f a r had ga in ed any c o s t s a v i n g s t h a t a il the major m anufacturing adv ers e e f f e c t s At t h e o p p o s i t e e x t r e m e , t i o n s and a c t u a l l y several and a l l glass from s u b s id y programs. then, the in d u stries had r e l a t i v e l y but th e l a r g e s t large shares o f from s u b s i d i e s . include the f u r n i t u r e , n o n -e le ctric a l stood p rin tin g studied effects in d u stries. to have r e l a t i v e l y enforced regula­ t h e i r p l a n t s which These r e l a t i v e l y and p u b l i s h i n g , th e s t o n e , fortunate r ub b er and m a c h i n e r y , and f a b r i c a t e d m e t a l s sizes o f p la n ts w ith in Among in c i d e n c e o f p l a n t s a f f e c t e d by s t r i c t l y had w i t n e s s e d t h e b e n e f i t s p las tic s , in d u stries, l e a s t sh a re s o f p l a n t s wh ich l e s s f a v o r a b l y upon th e s e two proportions o f t h e ir in d u stries re su lt i n d u s t r y and t h e from r e g u l a t o r y p o l i c i e s and o f b e n e f i c i a l from subs id y programs f a l l small the t h e paper in dustries c l a y , and Industry. Among j u s t th e p r o d u c er s o f d u r a b l e goods, i n d u s t r y has been found to f a r e Whi te about 17 p e r c e n t o f its least f a v o r a b l y from s t u d i e d e f f e c t s . employees worked f o r p l a n t s w i t h E - r a t e d d i s c h a r g e s , o n l y two o u t o f t h r e e o f employees u t i l i z e d its p l a n t s w i t h 250 o r more m unicipal wastewater c o n tro l prod ucer o f d u r a b l e goods, includ ed a r e l a t i v e l y small the t r a n s p o r t a t i o n s har e o f gained b e n e f i t s from s u b s i d i e s . o f ten o f t h e l a r g e s t the prim ary m etals its fa c ilitie s . equipment An ot he r in dustry, a ls o p l a n t s which c o u l d have N e v e r t h e l e s s , a bo u t seven o u t t r a n s p o r t a t i o n equipment e s t a b l i s h m e n t s in 268 M ic h ig a n d i s c h a r g e d t h e i r wa s te wa te rs in to public u t i l i t y sewers in 1 9 6 8 . 1 The In ci de nc e o f Tax Exemptions Among Ma jor I n d u s t r i e s Data l i m i t a t i o n s p r o h i b i t e d the conduct o f any c h i - s q u a r e t e s t s t o d e t e r m i n e w h et h er o r not any s i g n i f i c a n t d i f f e r e n c e s e x i s t e d between proportions o f plants w ith in s p e c ific i n d u s t r i e s which had a p p l i e d f o r and r e c e i v e d a t a x exemption c e r t i f i c a t e p r i o r t o September o f 1969. N e v e r t h e l e s s , T a b l e 26 can d e p i c t t h e d i s t r i b u t i o n o f exemptions among the same m a jo r i n d u s t r i e s t h a t have been r e f e r r e d to by the two p r e v i ­ ous t a b l e s . T a b l e 26 shows th e number o f f i r m s and p l a n t s w i t h i n each major i n d u s t r y and broad In a d d i t i o n , in d u strial in cl ud e d it in dustrial summarizes fa c ilitie s c a t e g o r y which had re c e iv e d an exemption. i n f o r m a t i o n about the a c q u i s i t i o n cos t o f which had been exempted from t a x e s . in T a b l e 26 a p p l i e s t o exemptions r e c e i v e d f o r The data industrial Cha pte r V I I I r e p o r t s the r e s u l t s o f an a n a l y s i s t o dete rmi ne what p r o p o r t i o n o f p u b l i c t r e a t m e n t works o p e r a t e d by v a r i o u s s i z e s o f m u n i c i p a l i t i e s In Michi gan had r e c e i v e d a s s i s t a n c e from any st ud ie d s ubsidy program p r i o r t o September o f 1969. The purpose o f t h i s a n a l y s i s has been t o see i f m a n u f a c t u r in g p l a n t s lo c a t e d w i t h i n or near p a r t i c u l a r s i z e s o f communities might no t have been a b l e to g a i n c o s t savings which r e s u l t from the subsidy programs. R esu lts have i n d i c a t e d t h a t v i r t u a l l y a l l m a n u f a c t u r in g p l a n t s which sent w a s t e w a t e r s t o p u b l i c f a c i l i t i e s s e r v i n g a t l e a s t 2 5 , 0 0 0 persons have been a b l e t o b e n e f i t from such c o s t s a v i n g s . Among th e 20 towns in M ic h ig a n which o p e r a t e d f a c i l i t i e s s e r v i n g from 10, 00 0 to 2 4 , 9 9 9 p e r s on s , however, o n l y I I had r e c e iv e d any a s s i s t a n c e from s t u d i e d programs. N e v e r t h e l e s s , I t has been concluded t h a t the inci de nc e o f b e n e f i t s from s u b s i d i e s has been f a i r l y e v e n l y d i s t r i b u t e d among those m u n i c i p a l i t i e s whose t r e a t m e n t f a c i l i t i e s r e c e i v e the g r e a t b u lk o f wa s t e w a t e rs t h a t Michi gan m a n u f a c t u r in g p l a n t s emit in t o p u b l i c u t i l i t y sewers. i 269 TABLE 2 6 . - - F i n d i n g s abo ut th e r e c e i p t o f t a x ex emption c e r t i f i c a t e s f i r m s and p l a n t s w i t h i n m a jo r w a t e r - u s i n g m a n u f a c t u r i n g industr ies. SIC Leading I n d u s t r i e s w i t h i n Broad Cate go r tes Number o f E n t i t i e s Which Had Received Exemptions by A c q u i s i t i o n Cost o f Exempted F a c i l i t i e s PI a n t s 3 r . b F i rms 0 0 0 0 -- — 0 0 — — 4 7 12 0 0 1* 6 9 0 0 24 28 1 Va 1uea Percent0 Minor Water Users 25 27 F u r n 1t u r e P r in tin g & publishing Total^ Water--Using Nondurables 20 28 26 30 32 Food Chem i c a l s Paper Rubber & p l a s . , nee Stone, c l a y , & glass Total^ 8 3 2, 6 71 13.443,859 3 ,2 3 2 ,1 *8 8 2.0% 31.7 7 .6 20 $17,523,592 41.4% k $ 17,861*,1*70 38,630 2,788,534 4,054,481 42.2% 0.1 6.6 9 .6 $ Water--Using D ur ab le s 37 35 3* 33 36 T r a n s p o r t , equipment N o n - e l e c . mach iner y Fab ric a te d metals Pr imary m e t a l s E l e c t r i c a l mach iner y k 11 0 1 2e 7e 0 Total'* ks 13 $24,833,443 58.6% T o t a l , E n t i r e manu­ fa c tu rin g sector 69 33 $42,357,035 100,0% a Figures in thes e columns a r e from T a b l e 18. ^From u n r e p o r t e d d a t a g a t h e r e d from t h e S t a t e Tax Commission. Pe rc e nt o f t o t a l a c q u i s i t i o n c o s t f o r t h e e n t i r e m a n u f a c t u r i n g s e c t o r t h a t is r e p r e s e n t e d by t h e a c q u i s i t i o n c o s t o f each i n d u s t r y o r sector. ^Al 1 i n f o r m a t i o n g i v e n in th e s e rows a p p l i e s to th e e n t i r e c a t e g o r y and no t t o j u s t t h e i n d u s t r i e s i n c l u d e d in t h i s t a b l e . eThe number o f f i r m s f o r th e s e two i n d u s t r i e s i n c l u d e s one f i r m which is a l s o in cl u d e d w i t h i n th e t r a n s p o r t a t i o n equipment i n d u s t r y and which had r e c e i v e d an exemption p r i o r to September o f 1969. Thu s, t h e t o t a l f i r m s f o r t h e W a t e r - U s i n g Du ra b le s c a t e g o r y is l e s s t han the t o t a l o f f i r m s l i s t e d f o r each s e p a r a t e i n d u s t r y . 270 f a c i l i t i e s which t r e a t e d w a s t e w a t e r s p r i o r e it h e r p u b lic waters or pu b lic u t i l i t y fits from s u b s i d i e s , it in t o sewers. W h i l e t h e t r a n s p o r t a t i o n equipment in d u s trie s w ith the g r e a te r to t h e i r discharge industry is not among the shares o f p l a n t s which had r e c e i v e d bene­ is c e r t a i n l y among t h e industries t h a t have b e n e f i t e d t h e most from M i c h i g a n ' s t a x exemption program. Out o f e v e r y te n m a n u f a c t u r i n g p l a n t s which had r e c e i v e d an e x e m p ti o n , m anufac tured t r a n s p o r t a t i o n equipment more, (mainly au to m o b ile s ). t h e a c q u i s i t i o n c o s t o f exempted f a c i l i t i e s four Further­ t h a t were o p e r a t e d by t r a n s p o r t a t i o n equipment e s t a b l i s h m e n t s comprised about k2 p e r c e n t o f th e o r i g i n a l The c h e m ic a ls tiv e ly cost o f a l l t h e exempted m a n u f a c t u r i n g f a c i l i t i e s . industry also i n c l u d e d some f i r m s which had ga in ed r e l a ­ l a r g e b e n e f i t s from M i c h i g a n ' s program.^ by p l a n t s w i t h i n this s ing le Exemptions r e c e i v e d industry applied to f a c i l i t i e s purchase c o s t s wo rth alm os t o n e - t h i r d o f th e o r i g i n a l w ith cost o f a l l the exempted m a n u f a c t u r in g f a c i l i t i e s . Other i n d u s t r i e s which in clu ded f i r m s t h a t r e c e i v e d exemptions f o r one o r more p l a n t s petroleum, primary m e ta ls , had a p p l i e d f o r and I n c l u d e the f o o d , p a p e r , fa b ric a te d m etals, n o n -electrical and p r e c i s i o n equipment in dustries. Users c a t e g o r y had been issued a c e r t i f i c a t e o f exemption a p p l i c a b l e to t h e i r p l a n t s . Among the ma jor No f i r m s w i t h i n m a ch in e r y , in d u s trie s w ith in Nondurables and W a t e r - U s i n g D u r a b le s c a t e g o r i e s , plastics; s t o n e , c l a y and g l a s s ; and e l e c t r i c a l t h e Minor Water th e W a t e r - U s i n g the r ub b er and m a chi ner y in d u s trie s ^Under agreement w i t h personnel wo rki n g f o r th e S t a t e o f M i c h i g a n , no r e f e r e n c e s a r e made h e r e i n to any o f t h e s p e c i f i c f i r m s which had a p p l i e d f o r and r e c e i v e d any c e r t i f i c a t e s o f e x e m pt io n. 271 dfd not In c l u d e any f i r m s and p l a n t s which had b e n e f i t e d from M i c h i g a n ' s t a x exemption program. The In c i d e n c e o f E f f e c t s a t th e Regional Level Review and Pr e vi e w The p re c ed in g summary has re viewed m a jo r f i n d i n g s about the Incidence o f studied e f f e c t s at th e s t a t e le v e l. which among th e e m p lo y m e n t - s iz e and. i n d u s t r i a l been i n d i c a t e d as e i t h e r a c t u a l o r p o t e n t i a l l e s s e r amounts o f s t u d i e d e f f e c t s . and t h e i r recipients o f greater or The i n c i d e n c e o f e f f e c t s V III, and IX r e l a t e d appen dic es have shown, th e v a r i o u s kinds o f s t u d i e d in dustrial subgroups summarized have been d i s t r i b u t e d R a t h e r , as C hap te rs V I I , e f f e c t s have f o l l o w e d d i f f e r e n t p a t t e r n s o f and r eve al impact subgroups have above have no t a c t u a l l y o r would not p o t e n t i a l l y e v e n ly o v e r t h e e n t i r e s t a t e . These f i n d i n g s i n c i d e n c e among the s i z e Impact subgroups w i t h i n t h e v a r i o u s include d in t h i s s t u d y . impact T h i s s e c t i o n now summarizes h i g h ­ l i g h t s o f d i f f e r e n c e s among r e g i o n a l s t u d i e d a d v e rs e and b e n e f i c i a l regional patterns in th e in c i d e n c e o f effects. Procedure T h i s s e c t i o n proceeds by moving from f i n d i n g s about the r e g i o n a l inc i d e n c e o f e f f e c t s d iffic u lt to d e p ic t. dence o f b e n e f i c i a l Then, the regional grams is ta ken up. that are easiest to d e p i c t to those which a r e most The d i s c u s s i o n f i r s t t u r n s to the r e g i o n a l In c i­ e f f e c t s from M i c h i g a n ' s t a x exemption program. in c i d e n c e o f b e n e f i c i a l effects from subsid y p r o ­ T h i s c h a p t e r then c lo s e s w i t h a b r i e f w o r s t - p o s s i b l e employment losses among v a r i o u s r e g i o n a l review o f impact 272 subgroups. regional T a b l e 23 and F i g u r e 4 a r e s u f f i c i e n t incidence o f e f f e c t s a d v e rs e e f f e c t s o f s t u d i e d to i n d i c a t e the from a s s i s t a n c e programs. regulatory p o lic ie s , however, a r e summarized w i t h r e f e r e n c e p r i m a r i l y being made t o n i n e t a b l e s V II, W orst-possible In clu ded in Chapter T a b l e s 7 t hro ug h 15. The Regional I n c i d e n c e o f B e n e f i c i a l E f f e c t s From Tax Exemptions One o f t h e f o u r c h i - s q u a r e t e s t s conducted revealed in Ch apter IX has th a t the prop ortion o f p lan ts w i t h in m e tro p o lita n counties t h a t had a p p l i e d September o f f o r and r e c e i v e d a c e r t i f i c a t e o f exemption p r i o r to 196** is s i g n i f i c a n t l y g r e a t e r than the p r o p o r t i o n o f p l a n t s w i t h i n n o n m e t r o p o l i t a n c o u n t i e s t h a t had by then a p p l i e d f o r and r e c e i v e d an e x e m p t i o n . * situated w ith in A ll w ithin in M ic h ig a n a r e th e southernmost t h r e e water sh ed r e g i o n s . r e a s o n a b ly be h y p o t h e s i z e d , t e s t would m e tro p o lita n counties indicate therefore, I t could that a d i f f e r e n t chi-square that a s i g n i f i c a n t l y g re a te r proportion o f plants th e so uthern r e g io n s would have a p p l i e d f o r and r e c e i v e d an exemption as compared to the p r o p o r t i o n o f p l a n t s w i t h i n the n o r t h e r n ­ most f o u r r e g io n s which had done so. however, has Such a h y p o t h e s i s , not been borne ou t by th e r e s u l t s o f Ch apter chi-square te s ts IX. Another one o f the r e p o r t e d t h e r e i n has shown t h a t no such s i g n i f i c a n t d i f f e r e n c e does e x i s t between t h e sou thern and n o r t h e r n watershed reg i o n s . *The re a d e r w i l l r e c a l l t h a t t h e p o p u l a t i o n o f a l l c h i - s q u a r e t e s t s pr e s e n t e d in Ch apt er IX was comprised o n l y o f th e 4 3 8 manufac­ t u r i n g p l a n t s which e m i t t e d d i s c h a r g e s t h a t were s u b j e c t t o th e d i r e c t r e g u l a t o r y c o n t r o l s o f t h e M ich ig an Water Resources Commission. 273 Reasons why m a n u f a c t u r i n g p l a n t s located w i t h i n m e tro p o lita n c o u n t i e s have been a b l e to r e c e i v e t h e g r e a t e r b e n e f i t s from M i c h i g a n ' s t a x exemption program have been o f f e r e d These reasons b a s i c a l l y r e l a t e in C h a p t e rs III and IV . t o t h e g r e a t e r amount o f p r o f e s s i o n a l i s m t h a t appears t o c h a r a c t e r i z e t h e methods by wh ich p r o p e r t y t a x es a r e administered In m e t r o p o l i t a n c o u n t i e s v i s - a - v i s nonm etropolitan count i e s . The Regional I n c i d e n c e o f B e n e f i c i a l E f f e c t s From Subsidy Programs A key f a c t o r fic ia l effects that i n f l u e n c e s the r e g i o n a l from s u b s i d i e s m a n u f a c t u r in g p l a n t s t r e a t m e n t systems is t h e l o c a t i o n o f d i f f e r e n t in r e l a t i o n In t h e s t a t e . to th e l o c a t i o n o f f a c t o r s a r e ta k en k in d s o f la r g e r municipal T h i s f a c t o r adds a r e g i o n a l to the f o r e g o i n g summary o f t h e s t a t e - w i d e When l o c a t i o n a l i n c i d e n c e o f bene­ di mension i n c i d e n c e o f such e f f e c t s . into account, i t can be s a id that the kinds o f m a n u f a c t u r i n g p l a n t s t h a t have most o f t e n been a b l e to gain t h e b e n e f i t s , o r c o s t s a v i n g s , those p l a n t s which ( 1 ) a r e categories, (2) from s u b s i d i e s a r e p a r t i c u l a r l y in c lu d e d w i t h i n s m a l l e r e m p lo y m e n t - s iz e e m it w a s t e w a t e r s t h a t a r e most amenable to t r e a t m e n t in p u b l i c f a c i l i t i e s , and ( 3 ) are l o c a t e d w i t h i n a r e a s served by sewer systems which extend outward from l a r g e r p u b l i c The f o r e g o i n g t r e a t m e n t wo rks . summary o f T a b l e 23 and F i g u r e k has p o i n t e d out t h a t g r e a t e r p r o p o r t i o n s o f m a n u f a c t u r i n g p l a n t s in cl ud e d w i t h i n s m a l l e r s i z e c a t e g o r i e s and th e W a t e r - U s i n g D u r a b le s c a t e g o r y have been a b l e t o g a in c o s t s a vin gs which r e s u l t grams. from s t u d i e d s u b s id y p r o ­ Th a t t a b l e and t h a t f i g u r e a l s o s up p or t t h e c o n c l u s i o n that T ]k g r e a t e r shares o f p la n ts a l s o been a b l e l o c a t e d w i t h i n m e t r o p o l i t a n c o u n t i e s have t o w i t n e s s such c o s t T a b l e 23 d e p i c t s savings. t h a t an e s t i m a t e d 9 8 . 2 p e r c e n t o f a l l located w i t h i n m e tr o p o lita n co u n ties t i o n and t r e a t m e n t w o rk s . in 1968 made use o f p u b l i c c o l l e c ­ An e s t i m a t e d 9 3 * 3 p e r c e n t o f a l l l o c a t e d w i t h i n n o n m e t r o p o l i t a n c o u n t i e s then s e n t pu blic u t i l i t y sewers. plants plants t h e i r discharges Figure k a llo w s these o v e r a l l m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s to percentages f o r to be s e p a r a t e d i n t o p e r c e n t a g e s w h ic h a p p l y to each o f t h e t h r e e c o n s e c u t i v e l y larger e m p l o y m e n t - s i z e c a t e g o r i e s o f p l a n t s w i t h i n b o th t h e W a t e r - U s i n g No ndurables c a t e g o r y and t h e W a t e r - U s i n g D u r a b le s c a t e g o r y . The r e a d e r w i l l re ca ll hand s i d e o f F i g u r e A d e p i c t w ith in various impact into p u b lic waters in 1968. the estim ated b a r s on t h e le ft- share o f e s ta b lis h m e n ts Consequently, effects s h o r t e r o f th e s e b a r s t o be in cl u d e d the h o r iz o n t a l subgroups which sen t t h e i r d i s c h a r g e s d i r e c t l y incidence o f b e n e f i c i a l which that i n t e r p r e t a t i o n o f th e from s u b s i d i e s must c o n s i d e r in dication s o f those th e impact subgroups t h e g r e a t e r p r o p o r t i o n s o f p l a n t s whose w a s t e w a t e r s were s e n t t o p u b l i c u t i l i t y In terp re ta tio n sewers in 1968. o f F i g u r e 1* l e a d s to t h e f o l l o w i n g c o n c l u s i o n . G r e a t e r p r o p o r t i o n s o f m a n u f a c t u r i n g p l a n t s w i t h i n each o f s iv e ly sm aller s ize c a te g o rie s w it h in t h e s uc c es ­ both t h e W a t e r - U s i n g Nondu rab les and t h e W a t e r - U s i n g D u r a b le s c a t e g o r i e s o f bo th m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s have been a b l e t o u t i l i z e works and w i t n e s s c o s t s a v i n g s t h a t have r e s u l t e d low sewer s e r v i c e c ha r ge s a l l o w e d by s t u d i e d public from a r t i f i c i a l l y s u b s id y p r o g r a m s . 275 Figure k reveals th a t f o r each o f th e t h r e e s e p a r a t e s i z e c a t e g o r i e s t h e g r e a t e s t p r o p o r t i o n o f p l a n t s which coul d have w i t n e s s e d such c o s t s a v i n g s was w i t h i n p o lita n counties. t h e W a t e r - U s i n g D u r a b le s c a t e g o r y o f m e t r o - At t h e o p p o s i t e e x t r e m e , and a g a i n w i t h r e s p e c t t o each o f t h e t h r e e s e p a r a t e s i z e c a t e g o r i e s , p l a n t s w h ic h c o u l d have w i t n e s s e d c o s t the le a s t proportion of saving s was w i t h i n Using N on du rab les c a t e g o r y o f n o n m e t r o p o l i t a n c o u n t i e s . words, Figure 4 in d ic a te s the W aterIn o t h e r t h a t w ith o u t exceptio n the th r e e r e s p e c t iv e employment-size c a te g o r ie s w i t h i n t h e W a t e r - U s i n g D u r a b le s c a t e g o r y o f t h e me tro p ol i t a n group o f c o u n t i e s c o n t a i n e d t h e g r e a t e s t shares o f m a n u f a c t u r i n g p l a n t s which c o u l d have gai ned any b e n e f i t s from th e studied s u b s id y p r o g r a m s . ' The Regional I n c i d e n c e o f W o r s t - P o s s i b l e P o t e n t i a l Employment Losses From Enforced R e g u l a t i o n s N e i t h e r T a b l e 23 nor F i g u r e k in d ic a te the w o rs t-p o s s ib le employment lo sse s t h a t m ig h t have taken p l a c e as t h e s tric t immediate en fo rc e m e nt o f la te refer and 19 60s. Stated o th e rw is e , r e g u la t o r y p o l i c i e s d uring the n e i t h e r t h a t t a b l e nor t h a t t o p e r c e n t a g e s o f w o rk e r s w i t h i n v a r i o u s regional r e s u l t o f any In d u s tria l fig ure and impact subgroups employed by p l a n t s whose d i s c h a r g e s were as si gn e d t h e c o m p l e t e l y i n a d e q u a t e , o r E, r a t i n g in 1968. Consequently, ^Chapter V I I I p r o v i d e s a much more d e t a i l e d r e v i e w o f t h e r e g i o n a l in c i d e n c e o f b e n e f i c i a l e f f e c t s from s u b s i d i e s . That chapter examines t h e i n c i d e n c e o f e f f e c t s among e m p l o y m e n t - s i z e c a t e g o r i e s and broad i n d u s t r i a l subgroups o f t h e seven wa te rs h ed r e g i o n s . It a l s o p o i n t s o u t which o f th e p a r t i c u l a r i n d u s t r i e s have r e g i o n a l p a t ­ t e r n s in t h e i n c i d e n c e o f b e n e f i c i a l e f f e c t s from s u b s i d i e s which c o n s t i t u t e e x c e p t i o n s t o t h e g e n e r a l c o n c l u s i o n s summarized above. 276 T a bl es 27 and 28 have been pre pa re d t o p r o v i d e a s yn ops is o f the In c i d e n c e o f w o r s t - p o s s i b l e p o t e n t i a l regional employment losse s among v a r i o u s impact subgroups. T a b l e 27 summarizes p e r c e n t a g e s o f t o t a l employees w i t h i n m e t r o p o l i t a n and no n m e t r o p o lI t a n components o f s e p a r a t e and th e two major groups o f in d u stries which e m i t t e d E - r a t e d d i s c h a r g e s in dustries t h a t worked f o r e s t a b l i s h m e n t s in 1968. T a b l e 28 r e v i e w s f i n d i n g s about p e r c e n t a g e s o f th e t o t a l m a n u f a c t u r i n g work f o r c e and o f the total la b o r f o r c e o f each r e g i o n a l impact subgroup r e f e r r e d to in t h i s study t h a t e m i t t e d E - r a t e d d i s c h a r g e s . T a b l e 27 r e v e a l s t h a t in comparison w i t h t h e i r m e t r o p o l i t a n component th e n o n m e t r o p o l i t a n component o f both th e W a t e r - U s i n g Nondurables c a t e g o r y and the W a t e r - U s i n g D ur ab les c a t e g o r y the l a r g e r p e r c e n t a g e o f employees E-rated discharges. T h is t h a t worked re la tio n s h ip , to the W a t e r -U s in g D ur ab le s c a t e g o r y . mentioned g e n e r a l separate relatio n sh ip s, industries re fe rre d metals in p l a n t s which e m i t t e d however, p a r t i c u l a r l y applies Notwithstanding these a f o r e ­ sp ecific in dustries vary s u b s t a n t ia lly . in cl ud e d r e l a t i o n s h i p s which a p p l y to To be s u r e , among th e major to by T a b l e 27 o n l y the c h e m ic a ls and the p r im a r y i n d u s t r i e s had a g r e a t e r s ha r e o f t h e i r m e t r o p o l i t a n employees v is -a -v is t h e i r n o n m e t r o p o l i t a n employees t h a t would have been pl a c e d out o f work by w o r s t - p o s s i b l e employment e f f e c t s . ' Thus, the food; 'B ot h th e c h e m i c a l s i n d u s t r y and t h e p r i m a r y m e t a l s i n d u s t r y included l a r g e p l a n t s w i t h i n a d e q u a t e l y c o n t r o l l e d d i s c h a r g e s t h a t were lo cated w i t h i n t h e D e t r o i t Standard M e t r o p o l i t a n S t a t i s t i c a l A r e a . Even though the se p l a n t s were s i t u a t e d r e l a t i v e l y nea r th e sewer systems se rv in g l a r g e m u n i c i p a l w a s t e w a t e r t r e a t m e n t w o r k s , th e l a r g e volumes and t o x i c n a t u r e o f many o f t h e i r d i s c h a r g e s p r o h i b i t e d d i s c h a r g e i n t o p u b l i c u t i l i t y sewers. 277 TABLE 2 7 . — F i n d i n g s about p o t e n t i a l w o r s t - p o s s i b l e employment e f f e c t s upon m a jo r i n d u s t r i e s w i t h i n t h e m e t r o p o l i t a n and nonmetro­ p o l i t a n groups o f c o u n t i e s . 3 SIC P e r c e n t Employment in E s t a b l i s h m e n t s w i t h E- Rat ed D is c h a rg e s ^ Leading I n d u s t r i e s w 1c n 1n DiOdu Catego r ies M e t r o p o l i tan Count ies Nonmetropolitan Count ies E n tire State Water - U s i n g Nondurables 20 28 26 30 32 Food Chemicals Paper Rubber & pi a s . , nec Stone, c l a y , S glass Tota 1c 1.5% 20.8 1 5 .5 0.0 0.0 7-1% 5-5 *•1 -3 0 .0 4.6 3-6% 1 4 .8 26.5 0 .0 1 .4 9.8% 11.8% 10.5% 0.0% 0.0 15.2% 0 .0 5-6 7-6 26.2 2.5% 0 .0 1 .3 1 6 .6 11.1 Water -Usi ng D ur ab les 37 35 3* 33 36 T r a n s p o r t , equipment N o n - e l e c . mach iner y Fabricated metals P r im a ry m e t a l s E l e c t r i c a l mach iner y 0.5 1 8 .9 0.0 T o t a 1C 2.9% 9.2% 3.8% T o t a l , E n t i r e manu­ fa c tu rin g sector 3-5% 8.7? 4.5% aU n ! i k e i t s immediate p r e d e c e s s o r s , t h i s t a b l e does not r e f e r to i n d u s t r i e s w i t h i n th e Min or Water Users c a t e g o r y . As T a b l e 2 k has shown, no employees w i t h i n t h e two ma jor i n d u s t r i e s w i t h i n t h i s c a t e ­ gory worked f o r p l a n t s which e m i t t e d E - r a t e d d i s c h a r g e s In 1968. ^ Pe r c e n t a g e f i g u r e s from T a b l e s 6 th r o u g h 8 . c P e r ce nt a ge f i g u r e s a p p l y t o t h e e n t i r e c a t e g o r y and no t t o j u s t the i n d u s t r i e s in cl ud e d in t h i s t a b l e . TABLE 2 8 . — F i n d i n g s about p o t e n t i a l w o r s t - p o s s i b l e employment e f f e c t s upon r e g i o n a l impact groups and s ub g ro u p s .3 11 n r n Regional Groups and Subgroups r ■ u w n r‘ - i — i - j. — P e r ce n t o f Employment in E s t a b l i shments w i t h E-Rated D i scharges Percent * F1 * in Mfg. T* * iL T o t a l Mfg. Work Force T o t a l Labor Force Region 1 5-0% 1.8* 35-6* Reg ion 1 1A 5 .0 1 .8 35.6 Reg ion I I I A 0-9 0.4 39-4 4 . 52 1 .6* 36.0% Reg ion MB 6.42 1 .4% 22.5* Region I I IB 2.2 0.7 30.1 Region 7.2 I .3 1 8 .6 4.6 0.4 8.6 4 .5* 1.0* 21 . 3 * 3.52 1.32 36.02 8.7% 10.4 2 2.72 3 .7* 30.1* 35.62 4 . 52 1.6* 34.82 Southern Three Regions IV Region V / N o r t h e rn Four Regions M e t r o p o l i t a n Counties^ N o n m e t ro p o li t a n Co un ti e s: Throughout Michigan Southern Three Regions Only Total Michigan a Perce nta ge f i g u r e s from T a b l e 16. ^A11 o f the m e t r o p o l i t a n c o u n t i e s w i t h i n t h e southern t h r e e r e g i o n s . in th e s t a t e a r e lo c a t e d 279 paper; s t o n e , c l a y , and g l a s s ; m e t a l s ; and e l e c t r i c a l gen e ra l t r a n s p o r t a t i o n equ ipment; m achinery fabricated i n d u s t r i e s were c o n s i s t e n t w i t h th e tendency o f having t h e i r n o n m e t r o p o l i t a n components c o n t a i n t he g r e a t e r share o f employment w i t h i n p l a n t s which e m i t t e d E - r a t e d discharges. gener al These l a t t e r te ndency. in d u stries, Indeed, however, not o n l y a bi d ed by th e they g r e a t l y accentuated it. None to v e r y small shares o f the m e t r o p o l i t a n work Forces o f t h e s e l a t t e r were employed in p l a n t s w i t h inadequately tre a te d wastewaters. r e l a t i v e l y moderate t o r e l a t i v e l y work f o r c e s were employed l a r g e shares o f in d u stries, 8ut t h e i r nonm etropolitan in such p l a n t s . N o t w i t h s t a n d i n g the above r e l a t i o n s h i p s , three in d u stries the c h e m i c a l s , T a b l e 27 shows t h a t p r i m a r y m e t a l s , and paper in d u s trie s , would have had the l a r g e s t p r o p o r t i o n s o f t h e i r m e t r o p o l i t a n work f o r c e s pl aced out o f work by w o r s t - p o s s i b l e employment e f f e c t s . l i s t o f most a d v e r s e l y a f f e c t e d c o u n t i e s would have a l s o paper in d u s trie s w i t h in nonmetropolitan included t h e paper two ou t o f ten workers w i t h i n industry. Indeed, about t h e n o n m e t r o p o l i t a n component o f the i n d u s t r y would have been f o r c e d ou t o f work i f a l l emitted The p l a n t s which i n a d e q u a t e l y t r e a t e d d i s c h a r g e s had gone o u t o f b u s i n e s s . The paper I n d u s t r y would have been j o i n e d by the e l e c t r i c a l and t r a n s p o r t a t i o n equipment i n d u s t r i e s on t h e r e l a t i v e l y se vere employment losses lis t of m achinery in d u s trie s w ith in n o n m e t r o p o l i t a n c o u n t i e s . T a b l e 27 has p r o v id e d a b r i e f summary o f th e incidence o f w o r s t - p o s s i b l e employment losse s among s p e c i f i c in d u stries w ith in two broade st r e g i o n a l in t h i s s t u d y . by r e f e r r i n g impact subgroups t o T a b l e 2 8 , a synopsis in clu ded is g i v e n o f t h e the Now, i n c i d e n c e o f such 280 losses among t h e t o t a l m a n u f a c t u r i n g work f o r c e and t h e t o t a l f o r c e o f each s e p a r a t e r e g i o n a l labor impact subgroup. T a b l e 28 shows t h a t t h e number o f persons employed by p l a n t s w ith E -ra te d discharges in 1968 comprised from 0 . 9 p e r c e n t o f th e manu­ f a c t u r i n g work f o r c e o f Region IIIA work f o r c e o f Region t h e e n t i r e group o f n o n m e t r o p o l i t a n counties w i t h i n IV. Yet, to 7 . 2 p e r c e n t o f th e m a n u f a c t u r i n g th e s t a t e exceeded Region r e v e a le d by T a b l e 2 8 , 8 . 7 percent o f a l l IV in t h i s regard. As m a n u f a c t u r i n g employees w i t h i n the n o n m e t r o p o l i t a n c o u n t i e s o f M ic h ig a n would have been s u b j e c t e d the w o r s t - p o s s i b l e p o t e n t i a l employment losse s if a ll E - r a t e d d i s c h a r g e s had been f o r c e d o u t o f b u s i n e s s . i m p o rt , furtherm ore, plan ts with It is o f p a r t i c u l a r to no te t h a t some 1 0 . U p e r c e n t o f a l l ing employees w i t h i n j u s t th e n o n m e t r o p o l i t a n c o u n t i e s m anufactur­ located w it h in the t h r e e southernmost water she d r e g i o n s would have l o s t whereas o n l y k . 5 p e r c e n t o f a l l to t h e i r jo bs m a n u f a c t u r i n g employees w i t h i n no rthernmost f o u r water she d r e g i o n s would have been a f f e c t e d the by w o r s t - p o s s i b l e l o s s e s .^ Compared t o o t h e r water she d r e g i o n s , p e r c en t ag e o f emitted Region i t s m a n u f a c t u r in g work f o r c e employed inadequately tr e a te d d isc h arg es. Y e t , as IV had th e h i g h e s t in p l a n t s which i n d i c a t e d by the r i g h t - h a n d column o f T a b l e 2 8 , o n l y one o t h e r wa te rs h ed Region V, had a s m a l l e r p r o p o r t i o n o f employed w i t h i n its the m a n u f a c t u r i n g s e c t o r . w i t h 1 .3 p e r c e n t o f its total regional Consequently, t o t a 1 l a b o r f o r c e employed region, labor Region force IV , in p l a n t s which ' A11 c o u n t i e s w i t h i n th e n o rth e rn m os t f o u r wa te rs h ed r e g i o n s have been c o n s id e re d n o n m e t r o p o l i t a n c o u n t i e s by t h i s s t u d y . 281 emitted inadequately t r e a te d d ischarges, shed r e g io n s in terms o f ranked f o u r t h among a l l th e sh are o f t o t a l regional water­ la b o r f o r c e s t h a t would have been f or c e d o u t o f work i f w o r s t - p o s s i b l e employment e f f e c t s had m a t e r i a l i z e d . In t h i s la tte r respect, have had th e g r e a t e s t share o f t h e i r jected to w o rs t-p o s s ib le 1 .8 p e r c e n t o f t h e i r losses. total total regional labor forces d is p la c e d . been f o r c e d ou t o f work by s t r i c t I and I( A wouid l a b o r f o r c e s sub­ Both o f thes e r e gi on s would have had ex tre m e , o n l y 0.*i p e r c e n t o f Region V s l a t o r y p o l i c ie s . Regions and total At th e o p p o s i t e l a b o r f o r c e would have im m e d ia t e ly enforcement o f regu­ CHAPTER X U RECOMMENDATIONS I n t r o d u c t ion T h i s c h a p t e r p r e s e n t s two types o f recommendations which r e s u l t from t h i s study. These two typ es o f recommendations a r e now b r i e f l y introduced. One t y p e Is based upon f i n d i n g s o f r e s e a r c h about t h e o f s t u d i e d economic e f f e c t s . W ith r e f e r e n c e to the s e f i n d i n g s , mendations a r e made a bo u t p o l i c i e s , s t r u c t u r e s and p r o c e d u r e s . general Incidence programs, and One l i n e o f recom­ in stitu tio n a l recommendations w i t h i n th is c a t e g o r y r e f e r s t o t h o s e p o l i c i e s and programs whose e f f e c t s have been s t u d i e d h e r e i n . A second lin e a pplies to in stitu tio n a l s t r u c t u r e s and p ro c e du re s t hro ug h which s t u d i e d and r e l a t e d measures a r e a d m i n i s t e r e d and c o o r d i n a t e d . The f o u r t h o b j e c t i v e o f t h i s recommendations. This o b je c t iv e r e s e a r c h on t h e economic c a rrie d out ties f o r a second t y p e o f To recommend f u r t h e r a r e a s o f impacts o f w a t e r p o l l u t i o n c o n t r o l research.' to th is o b je c t i v e . extend and r ead s: in M ic h i g a n and suggest means f o r for fu rth e r pertain study c a l l s Two s e p a r a t e One r e f e r s improve upon knowledge t h i s ^ St at e d o r i g i n a l l y improving t h e p o s s i b i l i ­ l i n e s o f recommendations a l s o to f u t u r e s t u d i e s which could st ud y has ga in ed abo ut the in th e P r e f a c e . 282 measures 283 magnitude and I n c i d e n c e o f a d v e r s e and b e n e f i c i a l p o llu tio n control measures. A second l i n e e f f e c t s o f water is b r o a d e r than t h i s , r e f e r s back to th e broad r e s e a r c h goal which i n i t i a t e d 1968. In e f f e c t , t h i s goal c a l l e d for a d d itio n al this and study In knowledge about th e economic e f f e c t s o f p o l i c i e s and programs t o c o n t r o l w a t e r p o l l u t i o n upon th e d e v e l o p i n g economy o f M i c h i g a n . various e f f i c i e n c y , sidered These e f f e c t s d e v e l o p m e n t a l , and d i s t r i b u t i o n a l in e x p l o r a t o r y r e s e a r c h and reviewed un p u b li s h e d m a n u s c r i p t s liste d i n c l u d e the e f f e c t s c on­ in Ch a pt e r III and in Appendix A. D i f f i c u l t i e s Encountered When Making Recommendations Two kinds o f d i f f i c u l t i e s a r os e when th e recommendations g i v e n in t h i s c h a p t e r were being f o r m u l a t e d . t o t h e t im e r e q u i r e d One a r e a o f d i f f i c u l t y to c o m pl e te t h i s s t u d y . related The o t h e r r e s u l t e d from the need t o base recommendations upon comparisons between f i n d i n g s about th e in c i d e n c e o f e f f e c t s a pattern of from s t u d i e d p o l i c i e s and programs and i n c i d e n c e deemed d e s i r a b l e This e x p lo r a t o r y , by some s t a n d a r d o f e q u i t y . In terd isc ip lin a ry , work has t a k en about s i x y e a r s t o c o m p l e t e . p o l i c i e s and programs des ign ed to c o n t r o l have c o n t i n u e d has o c c u r r e d d e s c r i p t i v e , and e m p i r i c a l F e d e r a l and M ic h i g a n and a b a t e w a t e r p o l l u t i o n t o change o v e r t h i s span o f y e a r s . in th e o r g a n i z a t i o n a l s t r u c t u r e o f a g e n c i e s which a d m i n i s t e r and c o o r d i n a t e the s e and r e l a t e d p o l i c i e s and programs. The need t o be brought up to d a t e about changes and in stitu tio n a l In a d d i t i o n , change in p o l i c i e s , programs, arra ng em e nt s thus posed a problem which had t o be faced b e f o r e recommendations were made. 28*1 An othe r problem came t o t h e f o r e because t h i s concerned w i t h t h e in c i d e n c e o f a d v e r s e and b e n e f i c i a l p u b l i c p o l i c i e s and programs. these e f f e c t s among v a r i o u s study has been effects of With respect to the d i s t r i b u t i o n o f impact subgroups, no st a n d a r d s o f e q u i t y a r e agreed upon by any l a r g e segment o f th e c i t i z e n r y . Nor does any widespread agreement e x i s t among economists and o t h e r p r o f e s s i o n a l s about s u b j e c t s t a n d a r d s o f e q u i t y . ceed to make recommendations, Y e t , b e f o r e t h e a u t h o r coul d p r o ­ he had t o a r r i v e a t some such s ta nda rd of equity. Means o f R e s o lv in g D i f f i c u l t i e s T h i s c h a p t e r proceeds by f a c i n g and r e s o l v i n g t h e afo remen­ t io n e d d i f f i c u l t i e s D iffic u ltie s the l a t e recommenations. caused by t h e c o n t i n u i n g e v o l u t i o n o f p o l i c i e s , and o r g a n i z a t i o n a l nent changes before presenting actual in t h e 1960s. s t r u c t u r e s a r e r e s o l v e d by b r i e f l y in s titu tio n a l The need f o r reviewing p e r t i ­ m i l i e u which have taken p l a c e s in c e some e x p l i c i t benchmark r e f e r e n c e f o r e v a l u a t i o n o f th e goodness o r badness o f p a t t e r n s economic e f f e c t s programs, in th e incidence of is met by an o u t r i g h t n o r m a t i v e s t a te m e n t o f the a u t h o r ' s concepts abo ut s ta n d a r d s o f e q u i t y which should g u id e such an evalu a tio n .* A fter t h i s o u t r i g h t norm ative statement is g i v e n , com­ p a r i s o n s a r e made between s t a n d a r d s o f e q u i t y deemed d e s i r a b l e by the a u t h o r and p a t t e r n s in th e in c i d e n c e o f economic e f f e c t s that this V o r d e f i n i t i o n s o f th e terms " o u t r i g h t n o r m a t i v e , " " v a l u e con' c e p t s , " " g o o d n e s s , " and " b a d n e s s , " r e f e r to Ch a pt e r 1 o f Glenn L. Johnson and Lewis K. Z e r b y , What Economists Do about Va lu e s {East Lans ing: M ic h ig a n S t a t e U n i v e r s i t y , Department o f A g r i c u l t u r a l Econom­ i c s , C e n t e r f o r Rural Manpower and P U b l i c A f f a i r s , 1 9 7 3 ) . 285 s t u d y ' s f i n d i n g s have r e v e a l e d . basis f o r a r r i v i n g at sp ecific These comparisons then s e r v e as t h e r e c o m m e n d a t io n s .' Toward t h e R e s o l u t i o n o f This s e ctio n attem pts tie s . F irs t, D iffic u ltie s to r e s o l v e t h e a f o r e m e n t i o n e d d i f f i c u l ­ i t updates Chapter II by p r e s e n t i n g changes in s t u d i e d p o l i c i e s and programs w h ic h t o o k p l a c e between 1969 and 1973* u p d a t in g is then f o l l o w e d by some s p e c u l a t i v e comments abo ut t h e influences effects. in t h e This t h e s e changes m ig h t have upon th e The d i s c u s s i o n in s titu tio n a l lik e ly incidence o f studied then c o n s i d e r s changes w h ic h have t a k e n p l a c e structures of t h e S t a t e o f M ic h i g a n th r o u g h which T h i s p r o c e d u r e o f s t a t i n g o n e ' s own v a l u e conc ep ts and then ba s in g recommendations upon a comparison between t h e s e con c e pt s and t h e p r e v i o u s l y conc lu de d r e s u l t s o f a s t u d y has been used by W i l l a r d W. Cochrane in Farm P r i c e s : Myth and R e a l i t y ( M i n n e a p o l i s : U niversity of M in ne so ta P r e s s , 1 9 5 8 ) . In P a r t s I and i l o f t h i s book, Cochrane makes an economic a n a l y s i s o f farm p r i c e - i n c o m e b e h a v i o r in th e U n i t e d S t a t e s . Then, in P a r t M l , he recommends c e r t a i n changes in p u b l i c p o l i c i e s . These p o l i c y c ha ng e s , i f a d o p t e d , would i n f l u e n c e t h e outcomes o f t h e price-incom e b e h avio r. Such outcomes would show up as e f f e c t s upon t h e e f f i c i e n c y and dev elo pm ent o f t h e a g r i c u l t u r a l s e c t o r and upon t h e d i s ­ t r i b u t i o n o f incomes among groups and subgroups w i t h i n t h a t s e c t o r . At t h e o u t s e t o f P a r t I I I , in C h a p t e r 6 , Cochrane c o n s i d e r s t h e r o l e o f t h e economist as a p o l i c y a d v i s e r and the c o n t r i b u t i o n s and l i m i t a t i o n s o f economic t h e o r y and a n a l y s i s t o t h a t r o l e . He s t a t e s , on page 123, t h a t t h e o r y and a n a l y s i s a l l o w t h e eco nom ist in h i s r o l e as a p o l i c y a d v i s e r t o s p e l l o u t t h e " . . . economic consequences o f a l t e r n a t i v e c ou rs es o f a c tio n ." But he goes on t o s a y , on page 128, t h a t as a p o l i c y a d v i s e r the eco nom ist is a l s o r e q u i r e d t o e v a l u a t e " . . . t h e v a r i o u s cons e­ quences o f , and [ t o draw] c o n c l u s i o n s w i t h r e s p e c t to t h e d e s i r a b i l i t y o f , a p a r t i c u l a r course o f a c t i o n . " T h is l a t t e r r e q u i r e m e n t , Cochrane c o n t i n u e s a t a n o t h e r p o i n t on page 128, r a i s e s " . . . t h e need f o r making e x p l i c i t t h e v a l u e systems o f s o c i a l s c i e n t i s t s d e a l i n g w i t h e x p l o s i v e p o l i c y problems . . . . " C o n s e q u e n t l y , he e x p l i c i t l y s t a t e s h i s own v a l u e c o n c e p ts in a s e c t i o n from pages 129 thr ough 133 e n t i t l e d "The V a lu e s and P r e c o n c e p t i o n s o f t h e A u t h o r . " In C h a p t e rs 7 and 8 , Cochrane then a sse ss es v a r i o u s p o l i c y a l t e r n a t i v e s and recommends c e r t a i n s p e c i f i c p o l i c i e s based upon h i s e v a l u a t i o n o f how th e outcomes o f v a r i o u s a l t e r n a t i v e s compare w i t h h i s p e r s o n a l v a l u e s and p r e c o n c e p t i o n s . 286 p e r t i n e n t p o l i c i e s and programs a r e a d m i n i s t e r e d and c o o r d i n a t e d . Drawing th e s e c t i o n t o a c l o s e desirable patterns in the Changes i s an o u t r i g h t n o r m a t i v e s ta te m e n t about in c i d e n c e o f s t u d i e d e f f e c t s . ^ in S t u d ie d P o l i c i e s and Programs I n t r o d u c t ion The r e g u l a t o r y p o l i c i e s and a s s i s t a n c e programs whose d i s t r i ­ butional e f f e c t s have been s t u d i e d h e r e i n were o p e r a t i o n a l and 1969 when d a t a were being c o l l e c t e d f o r t h i s study. bas ic kinds o f p o l i c i e s and programs a r e s t i l l as the f i n a l version o f this in e f f e c t recommendations s e c t i o n in 1968 These same in mid-197** is being w r i t t e n . Among t h e s t u d i e d p o l i c i e s and programs, however, o n l y th e g r a n t p r o ­ gram and th e t a x exemption program o f th e S t a t e o f M ic h ig a n a r e s t i l l being a d m i n i s t e r e d a c c o r d in g t o l e g i s l a t i o n which has not been r a t h e r s u b s t a n t i a l l y amended s in c e the late What f o l l o w s is a b r i e f 1960s. summary o f th e most b a s ic changes t h a t have been made by l e g i s l a t i v e amendments to f e d e r a l and Michi gan T h is f o r t h c o m in g s ta te m e n t does not r e f e r to t h e p r o p r i e t y o f any e x p l i c i t p a t t e r n s in t h e i n c i d e n c e o f s t u d i e d e f f e c t s among p a r t i c u ­ l a r impact groups and subgroups. R a t h e r , I t p e r t a i n s t o th e a u t h o r ' s v a lu e concepts about how p a r t i c u l a r p o l i c i e s and programs ought t o be a d m i n i s t e r e d and c o o r d i n a t e d in o r d e r to t a k e i n t o account th e i n c i d e n c e of e f f e c t s . 2 Sin ce 1969, however, t h e Nixon a d m i n i s t r a t i o n has re nde red cei— t a i n o f t h e s t u d i e d f e d e r a l subsidy programs v i r t u a l l y I n o p e r a t i v e by impounding funds which Congress had a u t h o r i z e d and a p p r o p r i a t e d . ^This s t a t e m e n t (and t h i s s u b s e c t i o n ) assumes t h a t those f e d e r a l subsidy programs which a r e a d m i n i s t e r e d s e p a r a t e l y from th e P . L . 8lt- 66 0 g r a n t program w i l l a l s o have to a b i d e by r e g u l a t i o n s which r e q u i r e t h e r e c o v e r y , v i a sewer s e r v i c e c h a r g e s , o f t h a t p o r t i o n o f any f e d e r a l c o s t - s h a r e s which has helped pay c o n s t r u c t i o n c os ts o f t h a t p o r t i o n o f p u b l i c f a c i l i t i e s r e q u i r e d t o r e c e i v e and t r e a t I n d u s t r i a l d i s c h a r g e s . 287 r e g u l a t o r y programs and t o f e d e r a l subsid y programs. ments t h a t a r e p e r t i n e n t t o t h i s study a r e r e f e r r e d Only those amend­ to. A fter ducing thes e amendments and r e v i e w i n g t h e i r main f e a t u r e s , comments a r e o f f e r e d about what t h e i r the magnitude and lik e ly in tro ­ some influences w i l l in c i d e n c e o f those adv erse and b e n e f i c i a l be upon effects which have been s t u d i e d h e r e i n . Changes in R e g u l a t o r y P o l i c i e s and Subsidy Programs Substantial changes were made in f e d e r a l regulatory p o lic ie s and subsidy programs by th e Federal Water P o l l u t i o n C o n t r o l Act Amend­ ments o f 1972, P u b l i c Law 9 2 - 5 0 0 . more s t r i n g e n t and w i l l T h is a c t w i l l p r o b a b ly b r i n g about r e g u l a t i o n s a g a i n s t p o i n t sources o f e f f l u e n t d is c h a r g e s most l i k e l y e l i m i n a t e many f u t u r e co s t savings t h a t users o f p u b l i c w a t e r p o l l u t i o n c o n t r o l from the f e d e r a l subsid y programs. At fa c ilitie s the s t a t e in dustrial would have w it n e s s e d le v e l, pertinent amendments to th e e n a b l i n g a c t o f th e Michigan Water Resources Commis­ s i o n , which is Act 2^5, r e g u l a t o r y program. imposed a d d i t i o n a l P u b l i c Acts o f 1929, have augmented the s t a t e ' s As e x p l a i n e d below, t h r e e such amendments have r e q u ir e m e n ts upon i n d u s t r i a l dischargers— re q u ire ­ ments which might w e l 1 i n f l u e n c e th e m a g n it u d e and in c i d e n c e o f a d v e rs e e f f e c t s from r e g u l a t o r y p o l i c i e s . Changes in f e d e r a l pot i c i e s regulatory The Federal Water P o l l u t i o n Co ntr ol the lo n g - r a n g e goal o f e l i m i n a t i n g Act o f 1972 has e s t a b l i s h e d the d i s c h a r g e o f p o l l u t a n t s into 288 n a v i g a b l e w a t e r s by 1985when s t r i v i n g 1. The r e g u l a t o r y p o l i c i e s toward t h i s goal i n t e r s t a t e and to be r e l i e d include: in tr a s ta te water q u a l it y standards, 2. e f f l u e n t standards a p p l i c a b l e to e n t i r e classes of p o i n t s o u r c e s , and 3- e fflu e n t system. re s tric tio n s , a d m i n i s t e r e d th r o u g h a p e r m i t These t h r e e k in d s o f r e g u l a t o r y p o l i c i e s g e n e r a l l y follow s. tio n , Subject th o s e were o p e r a t i o n a l in e f f e c t . ^ state t o r u l i n g s by th e Fed e ra l i n t e r s t a t e and when th e i n t r a s t a t e water q u a l i t y th e a t t a i n m e n t o f mediate or program. instream standards terms o f e f f l u e n t in t h e i r stead. is no lo n g e r e i t h e r th e the f e d e r a l w a t e r p o l l u t i o n th e s e g o a l s a r e now e xpr ess ed f o r Yet, in ter­ control th e most p a r t in standards. As s t a t e d a bo v e , th e u l t i m a t e goal o f the new f e d e r a l is t o e l i m i n a t e t h e d i s c h a r g e o f p o l l u t a n t s I 985 . t h e i r own i n t r a ­ 1972 amendments t o do so o r e l s e adopt such s t a n d a r d s the u l t i m a t e goal o f Rather, s t a n d a r d s which 1972 amendments were e n a c t ed have remained s t a n d a r d s were r e q u i r e d by t h e a u th o ritie s i n t e r a c t as Wa ter Q u a l i t y A d m i n i s t r a ­ Those s t a t e s which had not y e t adop ted have f e d e r a l upon Two i n t e r m e d i a t e g o a l s program i n t o n a v i g a b l e w a t e r s by have been s e t f o r a t t a i n m e n t by 1977 and ^The F e d e r a l Water Q u a l i t y A d m i n i s t r a t i o n now has t h e a u t h o r i t y to d e t e r m i n e t h a t c e r t a i n i n t e r s t a t e o r i n t r a s t a t e s t a n d a r d s a r e not c o n s i s t e n t w i t h th e 1972 amendments. S t a t e s can be d i r e c t e d to make those changes in e i t h e r i n t e r s t a t e o r i n t r a s t a t e s t a n d a r d s which a r e d i r e c t e d by t h e F e d e r a l Water Q u a l i t y A d m i n i s t r a t i o n . Th us, th e 1972 amendments gave t h e f e d e r a l government r e g u l a t o r y and e n f o r c e m e n t power o v e r a l l n a v i g a b l e w a t e r s , be t h e y i n t e r s t a t e o r i n t r a s t a t e . P r i o r to t h e s e amendments, however, f e d e r a l a u t h o r i t y o v e r t h e e m is s i o n o f e f f l u e n t s i n t o i n t r a s t a t e . w a t e r s was much more l i m i t e d . 289 1983. By J u l y 1, 1977, a l l p o i n t sources o f e f f l u e n t s be s id e s p u b l i c t r e a t m e n t works a r e t o r e c e i v e t h e b e s t p r a c t i c a b l e t e c h n i c a l This level o f control i s t o be p r e s c r i b e d f o r v a r i o u s c l a s s e s and c a t e g o r i e s o f sources by t h e Fe de ra l A1 so by J u l y 1, at 1977, a l l public l e a s t secondary t r e a t m e n t which e m it d i s c h a r g e s Water Q u a l i t y A d m i n i s t r a t i o n . * treatm ent f a c i l i t i e s to t h e i r d i s c h a r g e s . into pu blic 1, 19 83, a l l point s i v e l y more s t r i n g e n t e f f l u e n t 1983 is t o a t t a i n a l e v e l which w i l l w ild life provide f o r and f o r Those p o i n t sources a u th o ritie s . sources a r e to a b i d e by p r o g r e s ­ s t a n d a r d s which w i l l pr og res s toward t h e u l t i m a t e goal set f o r 1985- o f water q u a l it y in a l l ments. resu lt This in f u r t h e r i n t e r i m goal for n a v ig a b le waters t h e p r o t e c t i o n and p r o p a g a t i o n o f f i s h and th e conduct o f w a t e r - b a s e d recreational The b a s i c means by which stream and e f f l u e n t to be implemented a r e to p r o v i d e systems a r e to comply w i t h p r e t r e a t ­ ment s t a n d a r d s e s t a b l i s h e d by t h e f e d e r a l By J u l y control. a c tiv itie s . 2 s t a n d a r d s a r e now is the p e r m i t system p r e s c r i b e d by the 1972 amend­ T h i s system r e q u i r e s in dividual p e r m i t to d i s c h a r g e w a s t e w a t e r s may a l l o w m o d i f i c a t i o n s p o i n t sources to a p p l y f o r a in to navigable w aters. to the aforementioned e f f l u e n t These p e r m i t s standards if the e n t i t y making t h e d i s c h a r g e can de m o n s t r a t e t h a t m o d i f i e d *The a d m i n i s t r a t i o n is r e q u i r e d by the amendments to adopt e f f l u e n t s t a n d a r d s f o r both new and e x i s t i n g sources o f e f f l u e n t s w i t h i n c e r t a i n p r e s c r i b e d c a t e g o r i e s o f p o i n t s o u r c e s. These standa rds a r e to be p e r i o d i c a l l y r e v i s e d . S t and ar ds f o r both new and e x i s t i n g sources a r e t o ta k e i n t o account th e c o s t o f t e c h n o l o g y and th e bene­ f i t s which r e s u l t from th e r e d u c t i o n o f w a s t e l o a d s . S t and ar ds f o r e x i s t i n g sources a r e a l s o t o c o n s i d e r , among o t h e r t h i n g s , th e age o f equipment and f a c i l i t i e s . 2 In e f f e c t , t h i s i n t e r i m goal Is th e o n l y f e d e r a l is now expressed in terms o f In s t r e a m w a t e r q u a l i t y . goal which 290 r e q u ir e m e n t s r e p r e s e n t th e maximum use o f c o n t r o l can be e c o n o m i c a l l y a c h ie v e d and y e t s t i l l toward t h e u l t i m a t e goal states, w ith federal autho rity, approval to a d m i n i s t e r 1985. set fo r technology th a t resu lt in r e a s o n a b l e p r og re s s The 1972 amendments a l l o w the and u l t i m a t e r e g u l a t o r y and enf or c e m e nt the p e r m i t system. M i c h i g a n ' s p e r m i t system is s p e l l e d o u t by amendments t o th e e n a b l i n g a c t o f th e Water Resources Commission. These amendments were made by Act 2 9 3 , P u b l i c A ct s o f 1972. Changes in f e d e r a l s u b s id y programs F a r - r e a c h i n g changes in f e d e r a l and s t a t e have been brought about by th e 1972 amendments. r e g u l a t o r y programs Substantial changes have a l s o been made in t h e c o n s t r u c t i o n g r a n t s program a u t h o r i z e d P .L . 8 ^ - 6 6 0 , as amended. 75 p e r c e n t o f projects. federal The f e d e r a l s har e the c o s t o f c o n s t r u c t i n g A ll previous share to be w ith a regional if is now s e t a t a f i x e d p u b lic water p o l l u t i o n control i n c e n t i v e s have been removed which a l l o w e d in cr e a s ed plan, if p r o j e c t s were b u i l t s t a t e s adopted g r a n t under t h e e x i s t i n g P . L . p r o j e c t s must meet p r e s c r i b e d c o n d i t i o n s . this study, pertain to two o f areawide In o r d e r 8 ^ - 6 6 0 program, the in accord anc e i n t r a s t a t e standards, or s t a t e s o p e r a t e d a s u p p o r t i n g g r a n t program. eral by tf to r e c e i v e a f e d ­ proposed local From the s t a n d p o i n t o f thes e c o n d i t i o n s a r e most im portant. These two p l a n n i n g and management and t o the r e c o v e r y o f s u b s i d i e s from i n d u s t r i a l customers t hro ug h use r c h a r g e s . The 1972 amendments make i t national p o licy to p r o v i d e g r a n t s f o r th e c o n s t r u c t i o n o f p u b l i c t r e a t m e n t works and t o d e v e lo p and 291 Implement a r e a w i d e w a s t e w a t e r t r e a t m e n t management p l a n n in g p r oc es ses . F u r t h e r m o r e , a s t a t e d purpose o f t h e f e d e r a l g r a n t program Is to encourage t h e combined t r e a t m e n t o f m u n i c i p a l public f a c i l i t i e s . Such f a c i l i t i e s a manner which produces revenues wastes in a r e to be de sig ne d and o p e r a t e d in in excess o f c o s t s . a r e t o be used by t h e a r e a w i d e a ge nc ie s mental improvement p r o g r a m s .' and i n d u s t r i a l A ll in s up po rt o f o t h e r e n v i r o n ­ applicants f o r a g r a n t must be pre pared t o l e v y sewer s e r v i c e charg es upon i n d u s t r i a l w ill recover . These revenues customers which . t h a t p o rtio n o f the cost of c o n s tru c tio n which is a l l o c a b l e t o t h e t r e a t m e n t o f such i n d u s t r i a l extent a t t r i b u t a b l e t o th e F e d e r a l share o f . . . wastes t o the th e c o s t o f c o n s t r u c t i o n . " A f t e r c o n s u l t i n g w i t h a p p r o p r i a t e governmental o f f i c i a l s , 2 t h e Federal Areawide w a s t e w a t e r management p l a n s a r e to be drawn up in those u r b a n i z e d and i n d u s t r i a l i z e d a r e a s d e s ig n a te d by e i t h e r th e Fe de ra l Water Q u a l i t y A d m i n i s t r a t i o n or s t a t e g o v e r n o r s . Members o f the p l a n n i n g o r g a n i z a t i o n f o r each such a r e a a r e t o be a p p o in te d by gov­ e r n o r s and a r e t o i n c l u d e e l e c t e d lo c a l o f f i c i a l s or t h e i r d e s ig n e e s . W i t h i n one y e a r a f t e r t h e i r f o r m a t i o n , each p l a n n i n g o r g a n i z a t i o n is to have in o p e r a t i o n an a r e a w i d e w as te t r e a t m e n t management p l a n . Th is plan is t o i n c l u d e a l t e r n a t i v e s f o r was te t r e a t m e n t which a p p l y to a l l w a s t e w a t e r s g e n e r a t e d w i t h i n th e a r e a . Each s t a t e is t o a c t as the p l a n n i n g agency f o r those a r e a s which a r e not w i t h i n the bound ar ies o f any such a r e a w i d e o r g a n i z a t i o n . A f t e r t h e p l a n f o r each u r b a n i z e d a r e a w i t h a p l a n n in g o r g a n i z a ­ tion is in o p e r a t i o n , g o v e r n o r s a r e t o d e s i g n a t e one o r more waste t r e a t m e n t management a g e n c ie s f o r each a r e a . These management a g e nc ie s may be e x i s t i n g or newly c r e a t e d governmental b o d i e s . These a ge n c ie s a r e g i v e n the power by t h e 1972 amendments to c a r r y o u t th e a r ea w id e pl an by c o n s t r u c t i n g and managing f a c i l i t i e s , a c c e p t i n g f i n a n c i a l a s s i s t a n c e , r a i s i n g r e ve n u es , i n c u r r i n g in d e b t e d n e s s , a l l o c a t i n g c o s t s , a c c e p t i n g i n d u s t r i a l w a s t e w a t e r s , and r e f u s i n g s e r v i c e to any m u n i c i ­ p a l i t y which does not comply w i t h t h e a r e a w i d e p l a n , 2 P .L . F e d e r a l W at er P o l l u t i o n C o n tr o l Act Amendments o f 1972, 9 2 - 5 0 0 , Sec. 2 0 M b ) ( l ) , 8 1* S t a t . 9 1 , 33 U . S . C . A . *t66, e t seq. 292 Water Q u a l i t y A d m i n i s t r a t i o n sewer s e r v i c e c ha rg es is d i r e c t e d l e v i e d upon to p u b l i s h g u i d e l i n e s in d u strial for the users.^ Changes in M ic h i g a n P o l i c i e s and Programs T h re e a c t s have amended t h e e n a b l i n g a c t o f Resources Commission and a r e study. im p o rt a n t from t h e s t a n d p o i n t o f t h i s One such a c t , A c t 293> P u b l i c A ct s o f t o a bo v e . the f e d e r a l It in itia te d A second a c t , 1968, e s t a b l i s h e d a c e r t i f i c a t i o n w a s t e w a t e r t r e a t m e n t w o rk s . Act 2 0 0 , Act 2 0 9 , P u b l i c A ct s o f began a program whereby a l t th e p r o d u c t s , in l i n e w i t h P u b lic Acts o f program f o r o p e r a t o r s o f e s t a b l i s h m e n t s which e m i t w a s t e w a t e r s to r e g i s t e r 1 9 7 2 , has been r e f e r r e d t h e p e r m i t system now o p e r a t e d amendments o f 1972. pertinent a c t, t h e M ic h i g a n Wate r 19 70, in d u s tria l in d u strial the t h i r d and commercial in to p u b lic waters are required p r o d u c t i o n m a t e r i a l s , and hazardous waste p r o d u c t s a s s o c i a t e d w i t h t h e i r o p e r a t i o n s and t o pay a s u r v e i l l a n c e fee. The o p e r a t o r c e r t i f i c a t i o n d i d no t become o p e r a t i o n a l program r e q u i r e s e v e r y wastewaters d i r e c t l y or c o n t r o l fa c ilitie s u n til in d u s tria l program was e n a c t e d this s t u d y was w e l l o r commercial i n t o p u b l i c w a t e r s t o have in 19 68 , but underway. This e n t i t y w h ic h e m i t s i t s w as te t r e a t m e n t s u p e r v i s e d by persons who have been c e r t i f i e d as ^Revenues r e c e i v e d from such char ges l e v i e d upon i n d u s t r i a l users a r e t o be d i s b u r s e d as f o l l o w s . M u n i c i p a l i t i e s a r e t o r e t a i n an amount equal to t h e n o n - f e d e r a l s har e o f c o n s t r u c t i o n c o s t s p l u s an amount n e c e s s a r y f o r f u t u r e e x p a n s io n and r e c o n s t r u c t i o n o f th e project. The l o c a l i t y , howe ver, may not r e t a i n o v e r 50 p e r c e n t o f a l l such revenues r e c e i v e d from such c h a r g e s . A l l revenues r e c e i v e d above t h i s maximum l i m i t must be r e t u r n e d to t h e F e d e r a l Wat er Q u a l i t y A d m i n i s t r a t i o n f o r d e p o s i t - in t h e f e d e r a l t r e a s u r y as m i s c e l l a n e o u s receip ts. 293 q u a l i f i e d o p e r a t o r s by t h e commission. r e q u i r e d t o submit a m onthly r e p o r t C ertified t o the commission which shows t h e e f f e c t i v e n e s s o f th e t r e a t m e n t o r c o n t r o l By J u l y 1, tria l 1972, fa c ility the commission had c e r t i f i e d o r commercial they su p e rv is e . 676 o p e r a t o r s o f indus­ fa c ilitie s .* Reporting o f products, is now r e q u i r e d o f operators are in d u strial facto r inputs, and hazardous w a s t e lo a d s and commercial e s t a b l i s h m e n t s as a means to improve the commission's w a t e r q u a l i t y m o n i t o r i n g and s u r v e i l l a n c e efforts. The s u r v e i l l a n c e f e e s a r e bein g used to h e lp f i n a n c e a d o u b li n g o f th e s u r v e i l l a n c e and enfor ce men t s t a f f o f the commission. The annual tional fee in c l u d e s an a d m i n i s t r a t i v e f e e o f $ 5 0 . 0 0 p l u s an a d d i ­ f e e s e t by the commission. $ 8 , 9 5 0 . 0 0 per e s t a b l i s h m e n t , and of discharges discharges into pu blic w aters. into pu blic u t i l i t y adm in is tra tiv e fee. If, downstream damages a f t e r additional T h is a d d i t i o n a l f e e c a nno t exceed is based upon the volume and s t r e n g t h E s t a b l i s h m e n t s which e m it however, such d i s c h a r g e s r e s u l t th e ir th eir sewers n o r m a l l y pay o n l y the $ 5 0 . 0 0 treatm ent in m u n i c i p a l f e e can be l e v i e d upon the d i s c h a r g e r . in u n l a w f u l systems, By J u l y 1, s u r v e i l l a n c e f e e program had made some 1,1 3 7 b i l l i n g s $727,000 2 then an 1972, the and had c o l l e c t e d in f e e s . 3 * S t a t e o f M i c h i g a n , Bureau o f Water Management, " B i e n n i a l Re p or t: F i s c a l Years 1 9 7 1 - 1 9 7 2 , " L a n s i n g , The Bureau, 1972, p. 9 . (Mimeographed. ) 2 Statement o f Thomas J. Anderson and Warren N. Goemaere, " M i c h i g a n ' s Water P o l l u t i o n C on tr ol P rog ra m ," in U . S . , Congress, House, Committee on P u b l i c Works, Water P o l l u t i o n C o n t r o l L e g i s l a t i o n - - 1971, Hear ings b e f o r e th e Committee on P u b l i c Works, 92nd Cong ., 1st s e s s . , Dec. 7 , 8 , 9 and 10, 1971, p. 502. 3 S t a t e o f M i c h i g a n , Bureau o f Water Management, p. II. 29^1 Likely I n f l u e n c e s o f Changes in P o l i c i e s and Programs Upon t h e In c i d e n c e o f Studied E ffe c ts I n t r o d u c t ion Stated in t h e i r b r o a d e s t f o r m , indicated that studied the f in d in g s o f t h i s st ud y have r e g u l a t o r y p o l i c i e s and a s s i s t a n c e programs have given the m e tr o p o lit a n c o u n tie s in M ic h i g a n a c o m p a r a t i v e l o c a t i o n a l advan tag e o v e r n o n m e t r o p o l i t a n c o u n t i e s in t h e s t a t e . The m e t r o p o l i t a n counties contain the l a r g e r p u b lic t r e a t m e n t works in th e s t a t e . S t u d ie s have shown t h a t t h e l a r g e r t r e a t m e n t works in i n d u s t r i a l i z e d s t a t e s have r e c e i v e d t h e g r e a t b u l k o f a l l which have been e m i t t e d those- in d u s tr ia l in to pu blic u t i l i t y those m a n u f a c t u r ing p l a n t s sewers. l o c a t e d near M i c h i g a n * s w a s t e w a te r s Consequent 1y , la rg e r pu blic treat­ ment systems which e m i t d i s c h a r g e s amenable to t r e a t m e n t by the se systems have been a b l e to g a i n t h e b e n e f i c i a l e f f e c t s which manufac­ t u r e r s a c q u i r e from s t u d i e d su bsi dy programs w h i l e a v o i d i n g the g r e a te r d i r e c t c o s t s which a r e u s u a l l y a s s o c i a t e d w i t h enf orc em en t o f the direct regulatory controls o f federal control a u t h o r i t i e s . and M ic h ig a n w a t e r p o l l u t i o n In a d d i t i o n , m a n u f a c t u r i n g p l a n t s located w ith in m e t r o p o l i t a n c o u n t i e s have r e c e i v e d most o f th e b e n e f i t s a l l o w e d by M i c h i g a n t s t a x exemption program d u r i n g the f i r s t few y e a r s o f its operat io n . If t h e s t u d i e d r e g u l a t o r y p o l i c i e s and sub sid y programs had been c o n t i n u e d in th e forms they to o k fin ding s o f th is tain long-run in th e study could have j u s t i f i e d lo catio nal effects late 19 60s, then the th e p r e d i c t i o n o f c e r ­ upon m a n u f a c t u r i n g in d u s trie s w ith in 295 M ic h i g a n . ^ Plants w it h in tho s e m a jo r w a t e r - u s i n g d i s c h a r g e s a r e g e n e r a l l y amenable to t r e a t m e n t have c o n t i n u e d to re c e iv e i n t o p u b l i c w o rk s . in centives Firms w i t h i n a r e a s served by l a r g e r p u b l i c to l o c a t e new p l a n t s w i t h i n The f o r e g o i n g that c e r t a in studied in p u b l i c works would t o e m i t more o f such i n c e n t i v e s t o expand th os e e x i s t i n g i n d u s t r i e s whose t h e i r discharges i n d u s t r i e s would have r e c e i v e d p l a n t s wh ich were fa c ilitie s located w it h in o f m e t r o p o l i t a n c o u n t i e s and t h o s e same a r e a s . 2 r e v i e w o f p o l i c y and program changes has shown r e g u l a t o r y p o l i c i e s and s u b s id y programs have e i t h e r been augmented c o n s i d e r a b l y o r changed s u b s t a n t i a l l y s i n c e t h e la te 1960s. B e f o r e making any s p e c i f i c recommendations a bo u t the f u t u r e conduct o f p o l i c i e s > prog ram s, and r e s e a r c h , lo ok needs t o be t a k e n a t some l i k e l y influences program changes m ig h t have upon th e f u t u r e a d v e r s e and b e n e f i c i a l effects comments cannot examine t h e upon p a t t e r n s o f upon a l l r e g i o n a l , and employment s i z e subgrouops t h e k in d s o f The f o l l o w i n g b r i e f influences o f incidence o f e f f e c t s a b rie f t h a t p o l i c y and incidence o f studied h e r e in . lik e ly therefore, t h e s u b j e c t changes the v a rio u s in cl u d e d in t h i s in d u s tria l, study. These Th a t l e g i s l a t i o n which a u t h o r i z e s M i c h i g a n ' s t a x exem pti on program has not been amended s i n c e i t s passage in 1966. N evertheless, changes o v e r t i m e m ig h t t a k e p l a c e in t h e c l a s s i f i c a t i o n s , l o c a t i o n s , and s i z e s o f p l a n t s which a p p l y f o r and r e c e i v e most o f t h e c e r t i f i ­ cates o f exemption. L a t e r on In t h i s s u b s e c t i o n , more is s a id about such p o s s i b l e changes. 2 W ater p o l l u t i o n c o n t r o l c o s t s g e n e r a l l y c o m p r is e o n l y a small p r o p o r t i o n o f th e c o s t s o f m a n u f a c t u r i n g f i r m s and p l a n t s . Therefore, t he l o c a t i o n a l i n c e n t i v e s and i n f l u e n c e s m ent ion ed above should not be o v e r em ph as iz ed . Y e t , i t a pp ea rs as i f th e s e i n c e n t i v e s and i n f l u e n c e s a r e r e a l , and t h a t t h e e x t e n t t o which t h e y have been t a k e n i n t o acco unt in a c t u a l l o c a t i o n and e x p a n s io n d e c i s i o n s by M ic h i g a n m a n u f a c t u r e r s is a r e s e a r c h a b l e t o p i c . 296 comments c a n , however, p o r t r a y what a ppe ar t o be l i k e l y th e s e changes upon t h e l o n g - r u n addition , lo ca tio n a l influences o f e f f e c t s mentioned a bov e. In s p e c u l a t i v e comments can be made abo ut some p o s s i b l e e f f e c t s which s u b j e c t changes m ig h t have upon d i f f e r e n t s iz e s o f manufacturing f 1rms . I n f l u e n c e s o f Changes Subsidy Programs in Among t h e changes those made in t h e P . L . about in p o l i c i e s and programs summarized a bov e, 8 4 - 6 6 0 c o n s t r u c t i o n g r a n t program should b r i n g the most o b vi ou s s h i f t s 1972 amendments to t h e P . L . in t h e th e o t h e r f e d e r a l lu tio n control which r e q u i r e fa c ilitie s from c o s t s a v i n g s t h a t c o u ld g r a n t s p r o v id e d by t h e program.^ case t h a t fa c ilitie s in d u strial s tru c tio n costs. If As t h e 8 4 - 6 6 0 program become o p e r a t i o n a l , m a n u f a c t u r i n g p l a n t s which use p u b l i c able to b e n e fit incidence o f e f f e c t s . should no lo n g e r be f o r m e r l y be g a in e d Furthermore, it co ul d w e l l programs which s u b s i d i z e w ill users local a l s o have to f o l l o w f e d e r a l to re pay an a l l o c a t e d such u n i f o r m f e d e r a l those from be the water p o l ­ regulatio ns share o f con­ regulatio ns a c tu a lly I t w i l l be i n t e r e s t i n g to see how u n i f o r m l y t h e s u b j e c t 1972 amendments w i l l be e n f o r c e d . S e r v i c e c h a r g e s c a l l e d f o r by the s e amend­ ments a r e t o ta k e i n t o account t h e vo lu m e , s t r e n g t h , and f l o w r a t e s o f incoming i n d u s t r i a l w a s t e w a t e r s . During h i s f i e l d i n t e r v i e w s , the a u t h o r le a r n e d t h a t o n l y a few o f t h e l a r g e r p u b l i c t r e a t m e n t p l a n t s in south ern M ic h i g a n used m e te r s t o measure such c h a r a c t e r i s t i c s o f incom­ ing w a s t e w a t e r s . When such c h a r a c t e r i s t i c s were m e t e r e d , measurements a p p l i e d o n l y t o a r e l a t i v e l y fe w I n d u s t r i a l c u s t o m e r s , o r t h e l a r g e r i n d u s t r i a l c u s t o m e rs . I f a l I i n d u s t r i a l p l a n t s which e m i t d i s c h a r g e s i n t o p u b l i c works a r e to be l e v i e d c ha r ge s which r e c o v e r the f e d e r a l c o s t s h a r e s , then i t appea rs t o t h e a u t h o r t h a t some f l a t r a t e s c h e d u le w i l l have t o be used o r e l s e such c o s t sha re s cannot be r e c o v e r e d from t he s m a l l e r i n d u s t r i a l p l a n t s which u t i l i z e p u b l i c f a c i l i t i e s . 297 m a te ria lize , then sewer s e r v i c e c ha rge s customers c o u ld r e c o v e r a l l o f p u b l i c works which No f e d e r a l any s t a t e o r l e v i e d upon m a n u f a c t u r i n g f e d e r a l monies used t o b u i l d is needed to han d le law o r r e g u l a t i o n now c a l l s local The f e d e r a l legal a u t h o r i t y to o f g o v e r n m e n t .' be a b l e if in d u s tria l In sum, th e f e d e r a l th e s t a t e treatment p u b lic costs o f b u ild in g in d u strial 1972 w i l l in d u s tria l in fro m .a rtific ia fly in t h e f u t u r e . was te s w i l l no doubt reduce users o f p u b lic fa c ili­ Nevertheless, a l l the p o rtio n o f f a c i l i t i e s c u s to m e rs . plants users o f p u b lic f a c i l i t i e s l e g i s l a t u r e does not r e q u i r e amendments o f be a b l e t o a c q u i r e units monies. th e magnitude o f c o s t s a vin gs t h a t to i n d u s t r i a l in d u strial to g a i n t h e b e n e f i t s the r e c o v e r y o f s t a t e and l o c a l paid by i n d u s t r i a l to government does not a ppe ar to have the Consequently, low sewer s e r v i c e charg es and t r e a t th e r e c o v e r y o f impose such r e g u l a t i o n s upon s t a t e and l o c a l M ich ig an should s t i l l ties w ill for wastes. monies which a r e used t o h e l p c o n s t r u c t t h a t share o f p u b l i c works which can be a p p o r t i o n e d requirements. in dustrial that portion required of th e to c o l l e c t not be r e co ve r e d by the sewer charges Thus, some b e n e f i t s w i l l in th e form o f a r t i f i c a l l y s till accr ue low s e r v i c e c h a r g e s . 2 And the a r t i f i c a l l y low char ges which e x i s t e d up t o th e l a t e 'T h e a u t h o r to be a c c u r a t e . is no t a l a w y e r , bu t t h i s s t a t e m e n t appea rs to him 2 1960s W i th t h e p r e s e n t 75 p e r c e n t l e v e l o f f e d e r a l c o s t s h a r i n g and no b u i l t - i n i n c e n t i v e s f o r s t a t e g r a n t programs, i t is d o u b t f u l t h a t a n o t h e r bond program w i l l be i n i t i a t e d in M ic h i g a n a f t e r a l l funds o f the p r e s e n t $335 m i l l i o n program have been d i s b u r s e d . A new s t a t e program m ig h t be c a l l e d f o r , however, i f annual f e d e r a l a p p r o p r i a t i o n s d o n ' t re ach th e a u t h o r i z e d l e v e l s o r i f th e f e d e r a l e x e c u t i v e branch impounds a p p r o p r i a t e d fu n d s . 298 w ill c o n t i n u e to a l l o w c o s t saving s t o ac cr ue to in d u strial users o f p u b l i c t r e a t m e n t works. Oth er r e c e n t r e v i s i o n s in th e P . L . 81*-660 c o n s t r u c t i o n g r a n t program could a l s o b r i n g about f u t u r e changes dence o f b e n e f i c i a l effects. in p a t t e r n s Such d i s t r i b u t i o n a l in th e in ci­ changes co uld come about as f e d e r a l l y p r e s c r i b e d p r e t r e a t m e n t s t a n d a r d s a r e p l a c e d in o p e r a t i o n and as a r e a w i d e w a s t e w a t e r t r e a t m e n t management a g e nc ie s c a rry out area plans. fa c ilitie s w ill Suppose t h a t have to a b i d e by u n i f o r m , treatment requirem ents. pretreat) in d u s tria l users o f p u b l i c s tric t, Then th e d i r e c t c o s t s and e n f o r c e d p r e ­ to s e l f - t r e a t m a n u f a c t u r i n g w a s t e w a t e rs would be i n c r e a s e d . w i t h reduced c o s t s a v i n g s a t t r i b u t a b l e from f e d e r a l any in c r e a s e s sewers ever, w i l l T o ge th e r subsid y programs, in p r e t r e a t m e n t co s ts coul d do away w i t h much o f th e i n c e n t i v e f o r m a n u f a c t u r e r s to e m it u tility instead o f s till to p u b l i c wo rks. t h e i r discharges into public w aters. remain f o r m a n u f a c t u r e r s Such i n c e n t i v e s include Ot h er into public in cen tives, improved p u b l i c relations p u b l i c w a t e r s and th e lower t r e a t m e n t c o s t s which o f t e n e x i s t o f economies o f s c a l e in b u i l d i n g t r e a t m e n t works. large municipal into because or j o i n t m unicipal- These economies o f s c a l e m ig h t cause are a wi de p l a n n in g a ge nc ie s to emphasize l a r g e t r e a t m e n t works w a s te w a te r t r e a t m e n t management plans t h a t t h e y draw up. large regional how­ to send t h e i r e f f l u e n t s when m a n u f a c t u r in g d i s c h a r g e s a r e no lo nge r e m i t t e d d i r e c t l y industrial (or in the Suppose t h a t t r e a t m e n t f a c i l i t i e s do become th e c o r n e r s t o n e o f plan s made by a r e a w i d e p l a n n i n g groups o p e r a te d w i t h th e 1972 amendments.- in M ich ig an In t h i s c a s e , a d d i t i o n a l In accordance p u b lic wastewater 299 t r e a t m e n t c a p a c i t y would become a v a i l a b l e f o r use by m a n u f a c t u r i n g plan ts th a t a re located p r i m a r i l y I n f l u e n c e s o f Changes Regulatory P o l ic ie s I f enforced, in m e t r o p o l i t a n c o u n t i e s . In r e g u l a t o r y p o l i c i e s begun by the 1972 amendments and r e c e n t a d d i t i o n s t o M i c h i g a n ' s r e g u l a t o r y program w i l l g r e a t e r d i r e c t c o s t s o f w a s t e w a t e r t r e a t m e n t and c o n t r o l turing in d u s trie s .* H ig h er c o s t s w i l l to p r o v i d e t e c h n i c a l fa c ilitie s h i g h e r c o s ts w i l l surveillance fees, technical (2) fa c ilitie s , required to meet s t r i c t p r o v i d e t r a i n e d and c e r t i f i e d e f f i c i e n c y o f such f a c i l i t i e s , forms and r e p o r t s . stream and For, t io n e d kinds o f c os ts w i l l , firm s. (I) pay operators of and (4) fill out several that a l l new kind s o f o f t h e s e af o r e m e n ­ as a r u l e , cause the l e a s t economic h a r d s h ip Such f i r m s can w i t n e s s economies o f s c a l e In th e c o n s t r u c t i o n , o p e r a t i o n , and ma intenance o f p h y s i c a l As compared t o s m a l l , in a d d i ­ l a b o r a t o r y a n a ly s e s about the One Is led t o b e l i e v e to l a r g e , m u l t i - p l a n t by manufac­ be n e c e s s i t a t e d by r e q u ir e m e n t s to (3 ) conduct in not o n l y have t o be fo r t h c o m in g e f f l u e n t st an da rd s and a m b i t i o u s w a t e r q u a l i t y g o a l s . tio n , resu lt s in g le-p lan t firm s , t a t e p r o v i s i o n o f th e a d d i t i o n a l personnel fa c ilitie s . l a r g e r f i r m s can a l s o f a c i l i ­ needed f o r an in c r e a s i n g *The amount o f d i r e c t c o s t s which a r e f i n a l l y borne by manu­ f a c t u r e r s themselves depends, o f c o u r s e , upon t h e i r a b i l i t y t o pass cos ts alo n g t o s e c t o r s o f i n t e r m e d i a t e and f i n a l demand. Furthermore, th e e x t e n t to which o r i g i n a l d i r e c t c o s t s to c o n t r o l and t r e a t indus­ t r i a l w a s te w a te rs w i l l i n c r e a s e depends upon t h e manner o f a d m i n i s t e r ­ ing and e n f o r c i n g r e g u l a t o r y p o l i c i e s and th e success o f d e m o n s t r a t i o n and r e s e a r c h e f f o r t s t o f i n d l o w e r - c o s t a l t e r n a t i v e s to w i t h h o l d w as te loa ds from f i n a l e f f l u e n t s . The 1972 amendments a u t h o r i z e sub­ s t a n t i a l funds to be spent on such e f f o r t s . 300 number o f p l a n n i n g , with s u p e r v i s o r y , and a d m i n i s t r a t i v e d u t i e s a s s o c i a t e d i n d u s t r i a l w a s t e w a t e r management f u n c t i o n s . Combined I n f l u e n c e s o f Changes R e g u l a t o r y P o l i c i e s and Subsidy Programs in More s t r i n g e n t r e g u l a t o r y r e q u i r e m e n t s , r e c o v e r y a s p e c t s o f th e amended f e d e r a l to th e r e l a t i v e d i s a d v a n t a g e o f s m a l l , large, m u lti-p la n t a l t h o u g h small firm s. from economies o f charg es have e nab led them to u t i l i z e P.L. study have shown t h a t s i n g l e - p l a n t o p e r a t i o n s c a nno t b e n e f i t Their g e n e ra lly larg er counterparts. from s u b s i d i e s lower volumes o f w a s t e w a t e r d i s ­ public f a c i l i t i e s more o f t e n Now, however, t h e pretreatm ent p r o b a b l y reduce t h e r e l a t i v e a dv ant age t h e s m a l l e r f i r m s and p l a n t s once had in t h i s In v ie w o f t h e a bov e, visions o f federal law w i l l it la tte r respect. appears t h a t th e c o s t - r e c o v e r y p r o ­ reduce one o f t h e ma jor m a n u f a c t u r e r s have had t o expand and l o c a t e p l a n t s counties. than 1972 amendments to t h e 8 4 - 6 6 0 g r a n t program p l u s p o s s i b l y u n if o r m f e d e r a l regulatio ns w i l l li k e l y act s in g le -p la n t firm s v i s - a - v i s s c a l e t h e y have b e n e f i t e d more o f t e n to m u n i c i p a l i t i e s . th e ir g r a n t program, w i l l Findings o f th is f i r m s w i t h small together w ith cost- Furthermore, federal pretreatment i n c e n t i v e s which in m e t r o p o l i t a n r e g u l a t i o n s could a l s o cause p r e t r e a t m e n t c o s t s to r i s e and t h i s might a l s o slow down the t r e n d f o r m a n u f a c t u r e r s to e m it more o f t h e i r w a s t e w a t e r s u tility w ill se wers. The r e l e v a n t q u e s t i o n h e r e , however, ris e p ro p o rtio n a lly greater pl us th e c o s t s r e q u i r e d into public is wh ich c o s t s in t h e f u t u r e — t h e p r e t r e a t m e n t c os ts t o pay sewer s e r v i c e charges o r th e c o s t s nec es ­ s ary to p r o v i d e c o m pl e te s e l f - c o n t r o l o f m a n u f a c t u r i n g w a s te w a te rs ? 30) At t h i s tio n . w ill point in t i m e , About a l l affect no c e r t a i n answer can be g i v e n t o t h i s t h a t can now be done Is to l i s t t h e k in d s o f c o s t s r e f e r r e d to ques­ th o s e f a c t o r s which in t h e q u e s t i o n . P retreat­ ment c o s t s and s e r v i c e c h a r g e s should be i n c r e a s e d by t h e a f o r e m e n t i o n e d pretreatm ent r e g u l a t i o n s and c o s t - r e c o v e r y p r o v i s i o n s . hand, s e rv ic e charges c o u l d be lo wered r e l y upon l a r g e r e g i o n a l e ff lu e n t discharges. capacity in dustrial dischargers. i f areawide planning a u t h o r i t i e s t r e a t m e n t works as a p r i m a r y means o f managing Such r e g i o n a l addition al On t h e o t h e r works would most l i k e l y in p u b l i c t r e a t m e n t systems f o r provide u tiliz a tio n by In s p i t e o f c o s t - r e c o v e r y and p r e t r e a t m e n t r e q u i r e m e n t s , use o f t h e s e works o r even s m a l l e r p u b l i c works m ig h t s till be c o n s id e r e d by m a n u f a c t u r e r s as r e a s o n a b l e w a s t e w a t e r c o n t r o l a lte rn a tiv e s. By u s in g p u b l i c f a c i l i t i e s , t he c o s t s and a d m i n i s t r a t i v e w a s te w a te rs d i r e c t l y federal t h e y coul d a v o id many o f requirem ents asso ciated w ith d isc h a rg in g i n t o p u b l i c w a t e r s and in d e a l i n g d i r e c t l y w i t h and M ic h ig a n r e g u l a t o r y a g e n c i e s . Use o f p u b l i c would a l s o a l l o w many m a n u f a c t u r i n g f i r m s and p l a n t s s i 2e o f trol staffs required in d u strial t o r edu ce t h e w a s t e w a t e r management and con­ f u n c t i o n s — f u n c t i o n s t h a t g e n e r a l l y do not add to p ro fits . industry F u r t h e r m o r e , m a n u f a c t u r e r s would c o n t i n u e to b e n e f i t by r e l y i n g upon p u b l i c are in fa c ilitie s t r e a t m e n t systems because t h e i r public re la tio n s improved when low er volumes o f w a s t e w a t e r s a r e e m i t t e d d i r e c t l y Into p u b lic w aters. 3 02 Present In s titu tio n a l Structures in Mich iga n I n t r o d u c t ion Recommendations about p o l i c i e s and programs made l a t e r c h a p t e r must r e f e r to s p e c ific u n its , in t h i s s t r u c t u r e s , and procedu res through which M i c h i g a n ' s w a t e r p o l l u t i o n c o n t r o l and economic development p r o ­ grams a r e a d m i n i s t e r e d and c o o r d i n a t e d . M e n t io n must a l s o be made o f those gove rn me nta l the k in d s o f tional u n its of th e s t a t e wh ich e i t h e r conduct o r support r e s e a r c h recommended h e r e i n . T h i s synopsis o f a rra ng em e nt s c o n t i n u e s t o l a y t h e groundwork f o r The a rr a n g e m e n t s now summarized were in e x i s t e n c e d u r i n g in s titu ­ recommendations. late 1973- The M i c h i g a n Water Resources Comm iss ion S i n c e t h e t im e when t h i s s t u d y began in 1968, no changes have been made in t h e makeup o f t h e seven-member Water Resources Commission. The commission s t i l l is comprised o f d e p a r t m en t s resources, ture) (natural representatives public and t h r e e k in d s o f c i t i z e n groups h ealth , highways, and a g r i c u l ­ (in d u s tria l m u n i c i p a l i t i e s , and c o n s e r v a t i o n a s s o c i a t i o n s and mix o f r e p r e s e n t a t i v e s th e d e l i b e r a t i o n s o f reveals th a t th e re from f o u r s t a t e management, in te re s ts ). This is no c o o r d i n a t i o n d u r i n g the commission i t s e l f between those a ge nc ies which i n f l u e n c e r e s o u r c e development and t h e agency which is p r i m a r i l y concerned w i t h th e s t a t e ' s economic w e l l - b e i n g . because t h e M ic h ig a n Department o f Commerce commission, and t h i s de pa rt m en t T h is can be s a id is n o t r e p r e s e n t e d on the is t h e p r i m a r y agency o f th e s t a t e which c a r r i e s o u t economic development p o l i c i e s and programs. ber o f t h e commission who d i r e c t l y represents in d u s tria l, The o n l y mem­ c o m m er c ia l, 303 o r developmental represent in terests is t h e person a p p o in t e d by th e governor to i n d u s t r i a l management groups. Th is c i t i z e n representative, however, c e r t a i n l y cannot be expected o r assumed to speak f o r the Michigan Department o f Commerce when the commission must make d e c i s i o n s about issues which f r e q u e n t l y involve t r a d e - o f f s l e v e l s o f w a t e r q u a l i t y and d i f f e r e n t between d i f f e r e n t l e v e l s o f economic development. Lack o f C o o r d i n a t i o n Between P o l l u t i o n Control and Economic Development Formal c o o r d i n a t i o n between s t a t e - l e v e l trol w a t e r p o l l u t i o n con­ programs and economic development programs does not begin du rin g d e l i b e r a t i o n s o f t h e Michigan Water Resources Commission. such formal however, formal c o o r d i n a t i o n must be sought e ls e w h e r e . r e v e a l s t h a t no law s , Therefore, Such a s e ar c h, r e g u l a t i o n s , o r g u i d e l i n e s r e q u i r e any c o o r d i n a t i o n between those u n i t s o f Michi gan government which adm inister water p o llu t i o n c o n tro l programs and those which a t t e m p t t o s t i m u l a t e economic growth w i t h i n th e c o n s t r a i n t s s e t f o r t h by the water p o llu t i o n c o n tro l programs. ized th e s t a t e ' s e n v ir on m e nt a l The e x e c u t i v e o r d e r s which c e n t r a l ­ f u n c t i o n s have o n l y a f f e c t e d placement and c o o r d i n a t i o n o f those governmental manage, and o t h e r w i s e has been sa id mental the u n i t s which r e g u l a t e , i n f l u e n c e the use o f n a t u r a l reso ur ce s .^ Nothing In these o r d e r s , however, about means by which e n v i r o n ­ f u n c t i o n s a r e t o be c o o r d i n a t e d w i t h economic development functions. Nor is any such c o o r d i n a t i o n mentioned by e i t h e r (1) th e ^ S t a t e o f M i c h i g a n , E x e c u t i v e Order 1973“ 2 , " T r a n s f e r and Con­ s o l i d a t i o n o f Env ironmen tal F u nc tio ns w i t h i n th e Department o f N a t u r a l R eso ur ces ," January 11, 1973, and E x e c u t iv e Order I 9 7 3 " 2 a , " T r a n s f e r and C o n s o l i d a t i o n o f Env ironmen tal Fu nc tio ns w i t h i n th e Department o f N a tu ra l Res o ur ce s ," March 13, 1973- 30*i amended e n a b l i n g a c t o f the M ic hi ga n Water Resources Commission,* (2 ) t h e e x e c u t i v e o r d e r which e s t a b l i s h e s Review B oar d, tio n s o f the Reso urc es . 2 or (3 ) the M ic h i g a n Environmental those e x e c u t i v e o r d e r s which r e f e r t o th e f u n c ­ Inter-Departm ental Committee on Wa ter and R e l a t e d Land 3 To be s u r e , t h e a u t h o r has been t o l d many times d u r i n g views w i t h persons who work on t h e s t a f f o f t h e commission t h a t th e commission c o n s id e r s economic e f f e c t s o f v a r i o u s r e g u l a t o r y and a s s i s t a n c e measures i t a d o p t s , a d m i n i s t e r s , o r c o o r d i n a t e s . explained elsewhere taken in t h i s d i s s e r t a t i o n , Only when f e d e r a l have any w r i t t e n , B ut , as such e f f e c t s a r e g e n e r a l l y i n t o ac co un t on e i t h e r an ad hoc b a s is o r guidelines. in te r­ in response t o f e d e r a l g u i d e l i n e s have t o be f o l l o w e d , however, f o r m a l , and un if o r m procedures guided th e commission in making d e c i s i o n s on th e b a s i s o f e s t i m a t e d b e n e f i c i a l e f f e c t s and e s t i m a t e d a d v e rs e e f f e c t s o f v a r i o u s proposed o r o p e r a t i o n a l p o l i c i e s and programs. In no case is t h e commission r e q u i r e d make recommendations about the kinds o f s t a t e - l e v e l grams which could h e lp v a r i o u s t o e v a l u a t e and p o l i c i e s and p r o ­ Impact subgroups a d j u s t t o t h e economic e f f e c t s o f p u b l i c w a t e r p o l l u t i o n c o n t r o l measures. *Act 2*»5, P u b l i c Acts o f 1929, as amended. 2 S t a t e o f M i c h i g a n , E x e c u t i v e Order 1 9 7 3 * 9 , " E s t a b l i s h i n g Michigan Envir on men tal Review B o a r d ," J u l y 2 6 , 1973. 3 ' R ef e r e n c e is made t o th e I n t e r - D e p a r t m e n t a l Committee on Water and R e l a t e d Land Resources by E x e c u t i v e Or de r 1973“9 and by E x e c u t i v e Order 1 9 7 1 - 1 0 . T h i s l a t t e r o r d e r is mentioned in S t a t e o f M i c h i g a n , H e a l t h Impact P r o j e c t , S t a t e o f M ic hi ga n Water P o l l u t i o n Co ntr ol Program: An Assessment o f E f f e c t i v e n e s s ( L a n s i n g : The P r o j e c t , 1 9 7 3 ) , p- **0. 305 Both th e Water Resources Commission and t h e Department o f Com­ merce a r e r e p r e s e n t e d on t h e M ich ig an Env iro nm en tai Review Board. T h i s b o a r d , however, does not c a r r y o u t t h e k in d s o f f u n c t i o n s which result in e v a l u a t i o n o f the economic impacts o f w a t e r p o l l u t i o n c o n t r o l measures o r o f th e conduct o f economic development programs response to such measures. Rather, o f meet in g needs the contin uing and a c t i o n s s p e c ia l . . for in terms o f t h e i r t h i s board e x i s t s f o r th e purposes review o f s ta te p o lic ie s impacts on the env iron me nt [and] for a body to c a r r y ou t t h e r e s p o n s i b i l i t i e s o f E x e c u t i v e D i r e c t i v e 1971~10, th e e n v ir o n m e n t a l purpose o f th e Resources impact r e v i e w p r o c e d u r e . " * Inter-Departm ental is t o screen e n v ir on m e nt a l Environmental Review Board. The f o r e g o i n g procedures e x i s t impact s t a te m e n t s p r e p a r e d by s t a te m e n t s a r e fo r w a r d e d to the 2 indicates that c e r t a in fo rm alized a d m in is tra tiv e in o r d e r t o c o o r d i n a t e M i c h i g a n ' s e n v ir o n m e n ta l f u n c t i o n s and t o e v a l u a t e and a l l e v i a t e of p o lic ie s th e e n v ir o n m e n t a l Not y e t m e n ti o n ed , w ithin th e M ich ig an Department o f Commerce. impact U n i t , however, is a new u n i t c r e a t e d T h is u n i t , is t o a n a l y z e th e economic impacts Furthermore, th e c o o r d i n a t o r o f in 1973 known as the impact o f a d m i n i s ­ t r a t i v e and l e g i s l a t i v e d e c i s i o n s such as e n v ir o n m e n ta l decisions. con- such as those which a t t e m p t to s t i m u l a t e economic d e v e l o p ­ ment. Economic The p r im a r y Committee on Water and R e l a t e d Land v a r i o u s s t a t e a g e n c ie s b e f o r e c e r t a i n trot in th e u n i t control is to a c t as E x e c u t i v e S e c r e t a r y o f t h e G o v e r n o r 's Economic Expansion Council * E x e c u t i v e Order 1973“ 9» p. 2. 2 lb id. and 306 keep t h e c o u n c i l informed about th e economic government d e c i s i o n s , * Unit It appears, then, impact o f v a r i o u s s t a t e t h a t th e Economic Impact is to serv e as an a d v i s o r y body which conducts r e s e a r c h and keeps informed about t h e economic e f f e c t s o f p o l i c i e s and programs such as those s t u d i e d h e r e i n . in vo lv e d ernmental But t h e new u n i t is e v i d e n t l y no t to become in t h e d a y - t o - d a y c o o r d i n a t i o n o f any s t a t e p o l i c i e s o r gov­ u n its. o t h e r than t h a t Nor Is i t a p p a r e n t l y t o conduct any kind o f r e s e a r c h in tended t o d e t e r m i n e t h e economic e f f e c t s o f e x i s t 1ng p o l i c i e s and programs. Furthermore, it se emingly w i l l n o t c a r r y ou t any i n v e s t i g a t i o n s f o r t h e purpose o f recommending t h e a d o p t i o n o f s p e c i f i c p o l i c i e s and programs on th e b a s i s o f t h e i r e s t i m a t e d a b i l i t y to pe r f o r m a f u n c t i o n , such as th e c o n t r o l t he e s t i m a t e d magnitude and o f w a t e r p o l l u t i o n , and incidence o f t h e i r b e n e f i c i a l and adv ers e effects. No u n i t s o f M ic h ig a n government a r e r e s p o n s i b l e f o r th e con­ duct o f t h i s la tte r type o f r e s e a r c h . The M ich ig an Water Resources The a u t h o r c o u ld no t f i n d any s t a te m e nt o f purpose o r t a b l e o f o r g a n i z a t i o n f o r t h e Economic Impact U n i t . A c i v i l s e r v i c e announce­ ment, however, g i v e s t h i s d e s c r i p t i o n o f examples o f work to be con­ ducted by t h e p o l i c y a n a l y s i s s u p e r v i s o r who is t o c o o r d i n a t e t h e new u n it: " P l a n s , d i r e c t s and c o o r d i n a t e s the work o f a u n i t a n a l y z i n g the economic impact o f a d m i n i s t r a t i v e and l e g i s l a t i v e d e c i s i o n s on th e s t a t e and i t s c i t i z e n s . S u p er v is e s th e r e v i e w and a n a l y s i s o f d e c i ­ s io n s in such a r e a s as t a x a t i o n , a i r and w a t e r p o l l u t i o n , and t r a n s ­ p o r t a t i o n to d e t e r m i n e t h e i r economic and s o c i a l impa ct. Keeps informed o f c u r r e n t developments in economic c o n d i t i o n s which may a f f e c t b u s i n e s s , i n d u s t r y o r s t a t e government In M i c h i g a n . Acts as E x e c u t i v e S e c r e t a r y o f t h e G o v e r n o r ' s Economic Expansion C o u n c i l ; p r o v i d e s t h e Council w i t h a n a l y s e s o f s t a t e government d e c i s i o n s as t o t h e impact on t h e i n d u s t r i a l and business community and p r i v a t e c i t i z e n s o f the s t a t e . " From S t a t e o f M i c h i g a n , C i v i l S e r v i c e Commission, Announcement No. 8^38 OC, "The S t a t e o f M ic h ig a n Announces an Open C o m p e t i t i v e Exam­ i n a t i o n f o r P o l i c y A n a l y s i s S u p e r v i s o r 1 5 , " J u l y 9 , 1973* (Mimeo­ graphed.) 307 Commission is no t r e q u i r e d t o c o o r d i n a t e any o f the M ic h i g a n Department o f Commerce. f o l l o w any s t a t e g u i d e l i n e s o r r e ve a l e x p l i c i t trad e-o ffs its a c t i v i t i e s with Nor does th e commission have t o r e g u l a t i o n s which would cause It to t h a t a r e made between v a r i o u s o b j e c t i v e s and e f f e c t s when p a r t i c u l a r p o l i c i e s and programs a r e a d op te d . An O u t r i g h t N orm at ive Statement About D e s i r a b l e P a t t e r n s in the In c i d e n c e o f St u d ie d E f f e c t s I n t r o d u c t ion C ertain facets o f th is tiv is tic , study can be c h a r a c t e r i z e d as p o s i - o t h e r s as c o n d i t i o n a l l y n o r m a t i v e , and s t i l l pragm atic.* The study has been p o s i t i v i s t i c to p r o v i d e f a c t u a l in form atio n t he i n c i d e n c e o f c e r t a i n k in d s But its underlying about wha t o t h e r s as i n s o f a r as it i s t h e case w i t h o f a d v e rs e and b e n e f i c i a l has t r i e d regard to effects. r e s e a r c h a pp r oa c he s , frameworks, and methods have to a l a r g e e x t e n t been based upon t h e o r e t i c a l o f economics and r e g i o n a l science. and a n a l y t i c a l Hence, t o th e e x t e n t constructs that these t h e o r i e s and modes o f a n a l y s i s i n c l u d e i m p l i c i t v a lu e s about such t h i n g s as freed om, e f f i c i e n c y , or u t i l i t y , then t h i s study assumes some o f the c h a r a c t e r i s t i c s o f a c o n d i t i o n a l l y n o r m a t iv e work. t h i s work has been p r a g m a t i c . The pr a gm a tic c r i t e r i o n o f w o r k a b i l i t y was to th e f o r e d u r i n g e x p l o r a t o r y r e s e a r c h . terion, as Furthermore, T h is w o r k a b i l i t y c r i ­ I n t e r p r e t e d by th e a u t h o r as h i s r e s e a r c h p r o g r e s s e d , was p r i m a r i l y employed when a r r i v i n g a t c r i t e r i a o f c h o i c e which guided * R e f e r to t h e work by Johnson and Zerby mentioned a t th e o u t s e t o f t h i s c h a p t e r f o r a d i s c u s s i o n o f these p h i l o s o p h i c a l pos i t I o n s . 308 exploratory r e s e a r c h and when d e c i d i n g upon f i n a l o b j e c t i v e s , methods, and d a t a s our ce s. T h i s study has not y e t t a k e n on any c h a r a c t e r i s t i c s n o rm a t iv e r e s e a r c h wo rks. That is, up u n t i l proceeded on th e b a s i s o f any o u t r i g h t factual now t h i s s t u d y has n o t s t a te m e n t o f t h e a u t h o r ' s v a l u e co ncepts about what ought t o b e . enough agreement w i t h To be s u r e , the autho r d u r i n g t h e conduct and r e p o r t i n g o f r e s e a r c h including problems to be r e s e a r c h e d , (3) c r i t e r i a (2) used t o g u id e e x p l o r a t o r y and r e l i a b i l i t y o f f i n d i n g s lim itatio n s, emphasize c e r t a i n He s t i l l researchers, and (5) him self research, (**) c h o i c e s in l i g h t o f c e r t a i n as sumptions and t h e i r (6 ) d e c i s i o n s involved in choo sing t o Notwithstanding th e s e t h e a u t h o r does no t a c c e p t t h e p r a g m a t i c s ta n c e m aintains included, d i s t i n g u i s h between f a c t u a l that It is both u s e f u l to a t t e m p t and p o s s i b l e f o r to separate t h e i r i n f o r m a t i o n and e i t h e r o u t r i g h t or c o n d i t i o n a l l y normative statem ents. th at researchers though t h e goal values t o the s e concepts from t h e i r v a l u e con ce pts and b i a s e s and to a t t e m p t m aintains h i s own, c l a i m s made about t h e a c c u r a c y f i n d i n g s above o t h e r s . a d m is s io n s , however, e n tire ly . th is, (1 ) d e l i m i t a t i o n o f assignment o f p r i o r i t i e s among d i f f e r e n t methods and d a t a , attendant In separated C o n s e q u e n t l y , he r e a d i l y a d m it s t h a t h i s own p e r s o n a l and b i as e s have i n f l u e n c e d m a t t e r s such as t h e pr oblems, is th e p r a g m a t ic p h i l o s o p h y to r e c o g n i z e t h a t concepts and v a l u e conc ept s c a nno t be e n t i r e l y research. of o u trig h t should s t r i v e In o t h e r w o rd s, to normative th e a u t h o r toward o b j e c t i v i t y o f o b j e c t i v i t y may be e l u s i v e . factu al even 309 In l i g h t o f t h e above i n t r o d u c t o r y comments, what f o l l o w s an e x p l i c i t author. sta te m e nt about p e r t i n e n t n o r m a ti v e concepts he ld by the T h e r e f o r e , what f o l l o w s in t h i s n o r m a t iv e touch t o t h i s d i s s e r t a t i o n . o b jective Is in s t a t i n g d e s ira b le patterns those per sonal in t h e s u b s e c t io n adds an o u t r i g h t The a u t h o r now a t t e m p t s t o be v a l u e co ncepts which p e r t a i n incidence o f studied e f f e c t s . to These concepts then s e rv e as p o i n t s o f r e f e r e n c e f o r an e v a l u a t i o n o f the goodness o r badness o f the s e g e n e r a l upon th e a u t h o r ' s patterns. Recommendations can then be based ideas about how to c o n t i n u e those p a t t e r n s o f in c i­ dence judge d t o be good and a l l e v i a t e or change those p a t t e r n s judged t o be b a d . The o u t r i g h t n o r m a t i v e sta te m e nt which f o l l o w s must, o f c o u r s e , d i scu ss d e s i r a b l e p a t t e r n s In th e i n c i d e n c e o f economic e f f e c t s from the k in d s o f r e g u l a t o r y p o l i c i e s and a s s i s t a n c e programs c o n s id e re d herein. Forthcoming recommendations, however, do no t p e r t a i n to the se k in d s o f p o l i c y measures. solely Recommendations a r e a l s o made about those p o l i c i e s and programs which h e lp p a r t i c u l a r e n t i t i e s w i t h i n various impact subgroups t o a d j u s t to o r p r e v e n t employment a s s o c i a t e d w i t h t h e enfor ce men t o f w a t e r p o l l u t i o n c o n t r o l The f o l l o w i n g s ta te m e n t thus p e r t a i n s losses regulations. to r e g u l a t o r y p o l i c i e s , across- t h e - b o a r d a s s i s t a n c e programs, and a d ju s t m e n t a s s i s t a n c e programs. P re lim in ary Considerations The a c r o s s - t h e - b o a r d a s s i s t a n c e programs s t u d i e d h e r e i n In c l u d e f e d e r a l exemptions t o and s t a t e s u b s i d i e s to m u n i c i p a l i t i e s and s t a t e in dustries. tax These programs a l l o w th e d i r e c t monetary 310 costs (or real lo were d. resource c o s ts )* o f water p o llu tio n control t o be They a r e sa id t o be a c r o s s - t h e - b o a r d programs because th e a s s i s t a n c e th e y p r o v i d e can e i t h e r be a p p l i e d p l a n n i n g to c o n s t r u c t w a s t e w a t e r c o n t r o l e s t a b l i s h m e n t which o p e r a t e s c e r t a i n The l i t e r a t u r e r evi ew ed systems o r by any 111 and IV has r e v e a l e d i n c i d e n c e o f a d v e r s e and b e n e f i c i a l e ffe c ts o f public water p o llu tio n control measures a t th e t im e when e x p l o r a t o r y r e s e a r c h f o r t h i s s tu d y was bein g condu cted . has r e v e a l e d th e p o s i t i o n o f several t o r y p o l i c i e s should be changed charges and r e g i o n a l systems. in d u strial kind s o f t r e a t m e n t f a c i l i t i e s . in C ha p t e rs what was g e n e r a l l y known about t h e f o r by any m u n i c i p a l i t y T h is economists t h a t e x i s t i n g review regula­ in o r d e r to make use o f e f f l u e n t This r e v i e w has a l s o shown t h a t many o f thes e same economists m a i n t a i n t h a t a c r o s s - t h e - b o a r d a s s i s t a n c e p r o ­ grams should be d i s c o n t i n u e d . prim arily Reasons f o r to what a r e c o n s i d e r e d of e xistin g these p o s itio n s relate to be u n d e s i r a b l e e f f i c i e n c y outcomes k in d s o f r e g u l a t o r y p o l i c i e s and a c r o s s - t h e - b o a r d a s s i s t ­ ance programs. The n a t u r e o f t h i s mind. st ud y now needs to be r e c a l l e d and ke pt I t has not c a r r i e d ou t r e s e a r c h in in o r d e r to e s t i m a t e t h e Freeman, Haveman, and Kneese d i s t i n g u i s h between two g e n e r a l types o f p o l l u t i o n c o n t r o l c o s t s . Real r e s o u r c e c o s t s a r e the c o s t s o f f a c t o r in p u t s r e q u i r e d t o w i t h h o l d w a s t e l o a d s from e f f l u e n t d i s ­ c ha r g e s . F a c t o r income c o s t s r e p r e s e n t los s e s in income to l a b o r and c a p i t a l due t o th e r e q u i r e d w a s te w i t h h o l d i n g measures. Refer to A. M y r l c k Freeman I I I , Robert H. Haveman, and A l l e n V. Kneese, The Economics o f E n v iro n m e n ta l P o l i c y (New Y o r k : John W i l e y 6 Sons, I n c . , 1973) , PP. 1h i - i 48. Using t h i s d i s t i n c t i o n between c o s t s , a c r o s s - t h e - b o a r d a s s i s t ­ ance programs a l l o w r e a l r e s o u r c e c o s t s to be lo w e re d , whereas a d ju s t m e n t ( o r t a r g e t e d ) a s s i s t a n c e programs h e l p s p e c i f i c owners o f a d v e r s e l y a f f e c t e d f a c t o r In p u t s t o a d j u s t to e n f o r c e d r e g u l a t i o n s . 311 e ffic ie n c y e ffe c ts o f e xistin g p o l i c i e s and programs. It has n o t , t h e r e f o r e , been concerned abo ut th e q u e s t i o n o f w h e t h e r th e s e p o l i c i e s and programs a r e good o r bad c h o i c e s from t h e s t a n d p o i n t o f any e f f i ­ ciency c r i t e r i a . existing Rather, t h i s st ud y has chosen c e r t a i n k in d s o f p o l i c i e s and programs and accepted them as g i v e n . Then i t has conducted r e s e a r c h on t h e d i s t r i b u t i o n o f c e r t a i n o f t h e i r e f f e c t s . The a u t h o r In C ha pte rs Ml and is in g e n e r a l agreement w i t h economists mentioned IV who j u d i c i o u s l y s up po rt t h e i r c l a i m s t h a t the kinds o f p u b l i c measures s t u d i e d h e r e i n a r e no t o p ti m a l standpoint o f P a r e t o - b e t te r e f f i c i e n c y c r i t e r i a . ever, is Im m a t e r ia l In l i g h t o f t h e n a t u r e o f th e a u t h o r m a i n t a i n s t h a t it is o f little T h is a gr eem en t, this study. consequence i f agr e es o r d i s a g r e e s w i t h p o s i t i o n s re viewed from the in Chapters how­ Furthermore, he e i t h e r III and IV whereby c e r t a i n a u t h o r s and groups a d v o c a t e s p e c i f i c measures on the b a s is o f concepts about which p a r t i c u l a r impact groups ought to w i t n e s s eith er r e l a t i v e l y g r e a t c os ts o r b e n e f i t s o f c o n t r o l l i n g w a t e r p o l l u ­ tio n. At f i r s t blush, t h i s may be s u r p r i s i n g . How, i t m ig h t be as ke d, can th e a u t h o r make an o u t r i g h t n o r m a t i v e s ta te m e n t w i t h o u t t a k i n g a st ance about which among s e v e r a l impact groups and subgroups ought t o bear t h e b r u n t o f a d v e rs e e f f e c t s and fic ia l gain the most bene­ effects? The f o l l o w i n g response is g i v e n t o t h i s a p p r o p r i a t e q u e s t i o n . The fo r t h c o m i n g s ta te m e n t p e r t a i n s to the a u t h o r ' s v a l u e co ncepts about how t h e t h r e e k in d s o f p o l i c i e s and programs mentioned above ought to be a d m i n i s t e r e d and c o o r d i n a t e d . fore, This statem ent, there­ need not be based upon t h e p r o p r i e t y o f any p a r t i c u l a r p a t t e r n s 312 In t h e incidence o f studied e f f e c t s . I t m us t, however, be based upon c l e a r l y s t a t e d c r i t e r i a about m a t t e r s such as:^ 1. t h e e x t e n t t o which governmental a g e n c i e s c o n s i d e r th e magnitude and i n c i d e n c e o f b e n e f i c i a l and a d v e rs e e f f e c t s d u r i n g t h e process o f a d o p t i n g and c a r r y i n g o u t s p e c i f i c p o l i c i e s and programs, 2. t h e formal pro ce dur es thr oug h which the g e n e r a l p u b l i c and any impact groups and subgroups can ex pr es s t h e i r p r i o r i t i e s and p r e f e r e n c e s about the e f f e c t s o f proposed and e x i s t i n g p o l l u t i o n c o n t r o l measures, 3- t h e openness by which governmental u n i t s make and r e p o r t ne ce ssa ry t r a d e - o f f s between competing ends and v a r i o u s k in d s o f impacts when a d o p t i n g , a d m i n i s t e r i n g , c o o r d i n a ­ t i n g , and e n f o r c i n g p a r t i c u l a r measures, k. t h e f a i r n e s s and u n i f o r m i t y f o l l o w e d by governmental u n i t s r e s p o n s i b l e f o r th e c r e a t i o n and conduct o f p a r ­ t i c u l a r r e g u l a t o r y p o l i c i e s and a c r o s s - t h e - b o a r d a s s i s t a n c e programs, and 5. the de gree t o which th e p u b l i c r e s e a r c h and pl a n n in g process t a k e s i n t o account the ongoing need f o r t a r ­ ge te d a s s i s t a n c e by s p e c i f i c impact groups and subgroups. The St at em ent Guided by the s e c r i t e r i a , the a u t h o r ' s concepts about o p t i m a l means o f a d o p t i n g and c o n d u c t in g t h e t h r e e a f o r e m e n t i o n e d p o l i c i e s and programs become as f o l l o w s . c o n s id e re d f o r a d o p t i o n , tia l personnel, When such measures a r e being s t u d i e s should be conducted about th e p o te n ­ ma gnitude o f t h e i r b e n e f i c i a l p ertinent types o f and a d v e r s e e f f e c t s upon a l l impact groups and subgroups. f i n a n c i a l , conceptual, It is re c o g n iz e d t h a t and a n a l y t i c a l e x t e n t t o which such e f f e c t s can be e s t i m a t e d lim its tim e, re s tric t in monetary t e rm s . th e T h is The n o r m a t iv e s ta te m e n t and recommendations to f o l l o w a p p l y p r i m a r i l y t o i n s t i t u t i o n a l s t r u c t u r e s and processes a t th e s t a t e l e v e l in M ic h i g a n . 313 study has been a w i t n e s s to t h e s e l i m i t s . N evertheless, before s p e c i f i c p o l l u t i o n c o n t r o l measures a r e adopted l e g i s l a t u r e s and a ge nc ies should e i t h e r conduct o r sponsor b e n e f i t - c o s t a n a ly s e s in o r d e r t o f i n d o u t as much as p o s s i b l e about th e magnitude and i n c i ­ dence o f economic e f f e c t s . These s t u d i e s should not c o n s i s t o n l y o f a time stream a n a l y s i s o f pr e s e n t and p r o j e c t e d monetary e f f e c t s . Instead, th e y should a l s o i n c l u d e r e l e v a n t e x h i b i t s which p r o v i d e d e s c r i p t i o n s o f nonmonetary e f f e c t s upon d i f f e r e n t groups and sub­ groups. The r e s u l t s o f t h i s p r e s e n t s t u d y , measures o f nonmonetary e f f e c t s expressed patterns In t h e use o f m u n i c i p a l for instance, constitu te in terms o f employment treatment f a c i l i t i e s , tosses, o r th e d i s t r i b u ­ t i o n o f t a x exemption c e r t i f i c a t e s . The r e s u l t s o f b e n e f i t - c o s t a n a l y s e s should be in cl ud e d among the m a t t e r s .presented and debated d u r i n g addition , to a l l thes e r e s u l t s ought pertinent l e g i s l a t i v e hearings. to be p a r t o f t h e w r i t t e n m a t e r i a l s t h a t p u b l i c h e a r i n g s be held on a l l not p la c e d b e f o r e t h e e l e c t o r a t e guidelines sen t impact groups and subgroups which a r e n o t i f i e d o f p u b l i c h e a r i n g s on proposed p o l i c i e s and programs. should d i r e c t In Laws o r r e g u l a t i o n s p r o p o s al s which a r e in a re ferendum v o t e . Formal w r i t t e n should a l s o set f o r t h th e procedures whereby l e g i s l a t u r e s and a ge nc ies r e v i s e p r o p o s a l s h e a r in gs by v a r i o u s In th e l i g h t o f s ta te m e n t s made du ri n g i n d i v i d u a l s and gr ou ps. Such g u i d e l i n e s should r e q u i r e t h e proc ee din gs o f both l e g i s l a t i v e h e a r i n g s and p u b l i c h ea rin gs to be r e p o r t e d . R e p o r t in g should a l s o be r e q u i r e d o f major t r a d e - o f f s made d u r i n g the process o f r e v i s i n g p r o p o s al s as w e l l the b a s ic reasons why these t r a d e - o f f s were made. as 31^ Once p o l i c i e s and programs have been a d o p t e d , i.e ., once the r e q u i r e d p r o p o s a 1- h e a r i n g - r e v i s i o n process or th e r e q u i r e d p r o p o s a l referendum process has been c om p le t e d , for formal procedures should c a l l impact s t u d i e s to be conducted a t p e r i o d i c s t u d i e s ought to e s t i m a t e , the magnitude and measures. These in a p p r o p r i a t e monetary o r nonmonetary t e rm s , in ci de nc e o f economic e f f e c t s Furthermore, in terv a ls . in s titu tio n a l from the o p e r a t i o n a l means o f a d m i n i s t e r i n g ongoing p o l i c i e s and programs should p r o v i d e th e o p p o r t u n i t y f o r a i l affected impact groups and subgroups to e x p r e s s t h e i r views about s p e c i f i c methods o f e nfo rc em ent and c o nd uc t. po licies la tio n s should be j u s t , Means o f e n f o r c i n g r e g u l a t o r y u n i f o r m , and open. Laws and p u b l i s h e d reg u­ should d e t e r m i n e t h e process whereby r e g u l a t o r y a g e n c i e s , such as th e M ich ig an Water Resources Commission, d e c id e upon s p e c i f i c e fflu e n t r e s t r i c t i o n s which p a r t i c u l a r d i s c h a r g e r s must a b i d e by. When e x c e p t i o n s and time d e l a y s a r e a ll o w e d w i t h r e s p e c t t o r e s t r i c ­ tio ns, p e r m i t s , o r e f f l u e n t s ta nd a rd s charges, rules. imposed upon p a r t i c u l a r d i s ­ such age nci es ought to be guided by u n if o r m p r i n c i p l e s and These p r i n c i p l e s and r u l e s ought t o d e s c r i b e c r i t e r i a which e na bl e th e d e t e r m i n a t i o n o f those s p e c i f i c d i s c h a r g i n g e n t i t i e s or sp ecific impact subgroups which s u f f e r undue economic d i s t r e s s s t r i c t and immediate e n f o r c e m e n t. economic d i s t r e s s from D e f i n i t i o n s and examples o f undue should be e x p l i c i t l y s t a t e d by these p r i n c i p l e s and r u l e s . The a u t h o r m a i n t a i n s t h a t c l o s e working r e l a t i o n s h i p s must e x i s t between those governmental personnel who a d m i n i s t e r and e n f o r c e r e g u l a t o r y programs and those who a d m i n i s t e r e i t h e r a c r o s s - t h e - b o a r d 315 o r t a r g e t e d a s s i s t a n c e programs. prescribed in la w s , on a d a i l y b a s i s . must e s p e c i a l l y These r e l a t i o n s h i p s should be r e g u l a t i o n s , o r g u i d e l i n e s and then be c a r r i e d o u t Coordination o f r e g u l a t o r y and a s s i s t a n c e a c t i v i t i e s i n v o l v e communication between r e g u l a t o r y b o d i e s , such as the M ic h ig a n Water Resources Commission, and a g e n c ie s which c a r r y o u t programs des ign ed to s t i m u l a t e economic d e v e lo p m e n t , M ic h ig a n Department o f Commerce. Once it is d e t e r m i n e d t h a t u n i f o r m enfor ce men t o f w a t e r p o l l u t i o n c o n t r o l c au sin g o r mig ht cause s p e c i f i c e n t i t i e s o r suffer in ordinate fa c to r income c o s t s , such as t h e th e regulations e ith e r Is impact subgroups to then a g e n c i e s concerned w i t h economic development should be c a p a b l e o f w o rk in g c l o s e l y w i t h t h e e n t i t i e s o r subgroups in a t t e m p t s t o f i n d ways to a d j u s t a te these adverse e f f e c t s . This re q u ire s that the l a t t e r a g e n c ie s keep a b r e a s t o f t h e p r o v i s i o n s o f a wi de range o f f e d e r a l measures. These measures i n c l u d e those which re g u la to ry p o lic ie s or delays targeted assistance re train in g programs. to In d u strial (2) to provide t o m u n i c i p a l i t i e s o r make t a x establishm ents, or in th e form o f f i n a n c i a l , G uidelines fo r and s t a t e a llo w exceptions in meet in g th e s e p o l i c i e s , acro ss-the-bo ard subsidies a v a i l a b l e exemptions a v a i l a b l e (1) to o r a l l e v i ­ (3) bring to bea r t e c h n i c a l , o r manpower t h e conduct and c o o r d i n a t i o n o f these k in d s o f p o l i c i e s and programs should r e q u i r e a p p r o p r i a t e economic development a ge n c ie s to p e r i o d i c a l l y p u b l i s h u p - t o - d a t e c a t a l o g s o f a s s i s t a n c e o f f e r e d by each p a r t i c u l a r p o l i c y o r program. Among the recipients o f th e j u r i s d i c ­ tion of these c a t a l o g s should be each e n t i t y w i t h i n th e p u b l i s h i n g agency o r a g e n c ie s which e m i t s d i s c h a r g e s p u b l i c w a t e r s and which must a b id e by w a t e r p o l l u t i o n c o n t r o l into regulatio ns. 316 The essence o f t h e a u t h o r ' s v a l u e conc ept s about the e q u i t a b l e a d m i n i s t r a t i o n o f a c r o s s - t h e - b o a r d a s s i s t a n c e program is as f o l l o w s , i f any e n t i t y w i t h i n a p a r t i c u l a r impact group o r subgroup t o a p p l y f o r and d i r e c t 1y r e c e i v e t h e b e n e f i c i a l municipal s u b s id ie s o r tax exemptions, then a l l effects i f any e n t i t y w i t h i n any p a r t i c u l a r group o r subgroup is a b l e to c o n t r o llin g water p o llu tio n m u n icip a litie s, then a l l should a l s o be a b l e i nd i r e c t I y re alize e n t it i e s w ithin to r e a l i z e t h e s e a p p r o p r i a t e means o f a d m i n i s t e r i n g gram b e n e f i t s . applicants proves t h a t lower c o s t s . in th e f o l l o w i n g subsid y and t a x exemption programs. th e ir in terpret the laws These p u b l i c i t y e f f o r t s th e k in d s o f e n t i t i e s which may a p p l y f o r p r o ­ to a c t u a l l y a p p l y f o r program b e n e f i t s . conducted f o r tho ughts about Encouragement ought t o be g i v e n f o r a l l re la tiv e ly impact lower d i r e c t c o s t s o f poten tial I f e x p e r i e n c e then few a p p l i c a t i o n s were a c t u a l l y be in g r e c e i v e d from e n t i t i e s w i t h i n c e r t a i n groups o r subgroups, were b e in g in dustrial should be r e q u i r e d to p u b l i c i z e and specify th e s e b e n e f i t s . t h a t same group o r subgroup and r e g u l a t i o n s which govern t h e s e programs.^ should c l e a r l y that because o f s u b s i d i e s d i r e c t l y g i v e n to These b a s i c con ce pts r e s u l t A dm inistrators from e i t h e r e n t it ie s w ithin same group o r subgroup should a l s o be a b l e to a p p l y f o r Furthermore, is a b l e studies should be t h e purpose o f f i n d i n g o u t why such few a p p l i c a t i o n s received. To t h e e x t e n t t h a t p u rp o s e , a d m i n i s t r a t o r s t h e s e s t u d i e s a c com pl ish should then t a k e a p p r o p r i a t e s te ps to W o meet such a r e q u i r e m e n t , th e s e a d m i n i s t r a t o r s co ul d m e r e l y sup p ly a p p r o p r i a t e i n f o r m a t i o n t o be i n c o r p o r a t e d i n t o t h e c a t a l o g o f a s s i s t a n c e programs r e f e r r e d to above . 4 317 a lle v ia te those f a c t o r s found to be causing t h e d i f f e r e n t i a l rates o f a p p l i c a t i o n among groups o r subgroups. The r e s u l t s o f t h i s 1969 d i f f e r e n t i a l st udy have shown t h a t p r i o r t o September o f r a t e s o f a p p l i c a t i o n c e r t a i n l y e x i s t e d among c e r t a i n impact subgroups f o r c e r t i f i c a t e s o f t a x e x e m pt io ns . rates o f a p p lic a tio n fo r municipal subsidies, W i t h r e s p e c t to however, a l l municipal s i z e c a t e g o r i e s e x ce pt th e s m a l l e s t c a t e g o r y and t h e c a t e g o r y from 1 0 ,0 0 0 t o 2*1,999 persons coul d be c h a r a c t e r i z e d by v i r t u a l l y a l l p a litie s having a p p l i e d . But th e r e s u l t s o f t h i s m unici­ study have shown t h a t d e f i n i t e d i s p a r i t i e s e x i s t among impact groups and subgroups because d iffe re n t sizes, c l a s s i f i c a t i o n s , and l o c a t i o n s o f m a n u f a c t u r i n g p l a n t s have g e n e r a l l y not been a b l e t o r e a l i z e gi v e n t o m u n i c i p a l i t i e s . to t e c h n i c a l or Reasons f o r the s e d i s p a r i t i e s locational re s tric t s e r v i c e charges (benefits) tie s . Consequently, The a u t h o r is, therefo re, law which a p p a r e n t l y w i l l l e v i e d upon i n d u s t r i a l realized the o n l y way t o b r i n g d i s t r i b u t i o n o f t h e s u b j e c t c o s t savi ngs such s a v i n g s . th e r e c e n t f e d e r a l in agreement w i t h customers r e c o v e r any s a vin gs from t h e p r o v i s i o n o f federal grants customers r e a l i z e to m u n i c i p a l i ­ he a l s o b e l i e v e s t h a t M ic hi ga n law should r e q u i r e th e r e c o v e r y o f s i m i l a r ( b e n e f i t s ) which i n d u s t r i a l is to soon r e q u i r e t h a t sewer As t h e f o r th c o m in g recommendations r e v e a l , s ta te grants re la te p rim a rily f a c t o r s which a r e no t amenable to change by p u b l i c p o l i c i e s and programs.^ about a more equal lower c o s t s because o f s u b s i d i e s savings from th e p r o v i s i o n o f to m u n i c i p a l i t i e s . *T h i s p o i n t is e x p l a i n e d more f u l l y t i o n s about p o l i c i e s and programs. in f o r t h c o m in g recommenda­ 318 Recommendatfons About t h e Conduct o f P o l i c i e s and Programs Recommendations a r e now g i v e n about th e conduct o f p o l i c i e s and programs. These recommendations a r e in t er w o ve n w i t h comparisons between t h e means o f a d m i n i s t e r i n g s t u d i e d and p r e s e n t l y e x i s t i n g p o l i c i e s and programs and th e a f o r e m e n t i o n e d means which a r e deemed desirable from the s t a n d p o i n t o f e q u i t y . * Sequence o f To pi c s The d i s c u s s i o n f i r s t ta k es up r e g u l a t o r y p o l i c i e s . t u r n s t o a c r o s s - t h e - b o a r d a s s i s t a n c e programs. w i t h means o f c o o r d i n a t i n g a l l this la tte r respect, F in a lly , Then it i t deals p e r t i n e n t p o l i c i e s and programs. recommendations a r e not o n l y made about In th e c o o r d i n a t i o n o f procedures by which v a r i o u s p o l i c i e s and programs a r e c a r r i e d o u t on a d a i l y b a s i s . pertain to Rather, such recommendations a l s o i n t e r r e l a t i o n s h i p s between r e s e a r c h and p l a n n i n g a c t i v i t i e s and t h e a d m i n i s t r a t i v e means by which p o l i c i e s and programs a r e con­ c ep tu alized , propo sed , a d o p t e d , and f i n a l l y c a r r i e d o u t . Recommendations About R e g u l a t o r y P o l i c i e s Synopsis o f P o l i c i e s T h i s study has been p r i m a r i l y concerned w i t h those r e g u l a t o r y p o l i c i e s which p e r t a i n to e f f l u e n t d i s c h a r g e s e m i t t e d by m a n u f a c t u r i n g * Recommendations made in t h i s and the f o l l o w i n g s e c t i o n a r e based o n l y upon the se comparisons. The a u t h o r has n o t , however, e v a l u ­ ate d th e c o s t s o f h i s recommendations in terms o f t h e i r f i n a n c i a l , p e r s o n n e l , and t im e r e q u i r e m e n t s . Nor has he taken i n t o account the p o l i t i c a l a c c e p t a b i l i t y and f e a s i b i 1 I t y o f h i s recommendations. If th e s e recommendations a r e c o n s id e r e d w o r t h y o f i m p l e m e n t a t i o n , then o t h e r s w i l l have t o s t u d y t h e i r a d m i n i s t r a t i v e c o s t s and p o l i t i c a l p r a c t Ic a b i1i ty. 319 plants. The f o l l o w i n g p o l i c i e s o r components o f p o l i c i e s a r e t h e b a s i c ones which a p p l y to m a n u f a c t u r i n g d i s c h a r g e s s e nt d i r e c t l y i n t o the p u b l i c w a t e r s o f M ic h i g a n : 1. procedures e s t a b l i s h e d by th e e n a b l i n g a c t o f th e Water Resources Commission and by r u l e s o f th e commission whereby i t i s s u e s , hea rs g r i e v a n c e s a b o u t , and e n f o r c e s e f f l u e n t r e s t r i c t i o n s in p e r m i t s , a g r e em e n t s , o r o r d e r s , 2. pl a n s o f im p le m e n t a t io n and enfor ce men t o f w a t e r q u a l i t y standards, 3- e f f l u e n t s t a n d a r d s agreed upon by p a r t i e s to f e d e r a l s t a t e c o n fe r e n c e s c o n c e r ni n g p o l l u t i o n o f th e Gre at La k e s , 4. e f f l u e n t s t a n d a r d s being issued in accord anc e w i t h the Fe de ra l Wa ter P o l l u t i o n Co ntrol Act Amendments o f 1972, 5- r e q u ir e m e n t s f o r a l l i n d u s t r i a l w a t e r p o l l u t i o n c o n t r o l f a c i l i t i e s to be s up e r v is e d by t r a i n e d and c e r t i f i e d operators, 6. r e q u ir e m e n ts f o r th e m onthly r e p o r t i n g o f the o p e r a ­ t io n a l e f f i c i e n c y o f a l l i n d u s t r ia l water p o llu t i o n control f a c i 1i t ie s , 7. r e q u ir e m e n t s f o r th e annual submission o f wa s te wa te r r e p o r t i n g forms and payment o f s u r v e i l l a n c e f e e s . Ot h er p o l i c i e s a p p l y to m a n u f a c t u r in g d i s c h a r g e s e m i t t e d public u t i l i t y po licies sewers. P rior t o th e f e d e r a l p r i m a r i l y consisted o f municipal fin an cia l, o ffic ia ls leg al, and t e c h n i c a l and m a n u f a c t u r e r s . amendments o f 1972, in t o the s e sewer o r d i n a n c e s and s p e c i f i c ar rangements agreed upon by m u n i c i p a l The 1972 f e d e r a l amendments, however, e s t a b l i s h e d a system o f p r e t r e a t m e n t standa rds t h a t a r e t o augment pretreatment lo ca lly . r e q u ir e m en t s a r r i v e d a t The f i r s t resu lt f o u r p o l i c i e s or p o l i c y components l i s t e d in r e q u ir e m e n t s f o r s p e c i f i c e n t i t i e s above to e i t h e r employ s p e c i f i e d tec hn iq ue s o f w a s t e w a t e r t r e a t m e n t o r to w i t h h o l d c e r t a i n amounts o f 320 p a r t i c u l a r wasteloads. These f o u r kin d s o f r e g u l a t o r y measures owe t h e i r o r ig in s to several d iffe re n t s ta te or federal f e d e r a l - s t a t e enfor ce men t c o n f e r e n c e s . it In th e f i n a l an alysis, however, is th e M ich ig an Water Resources Commission which e s t a b l i s h e s p e r m i t s , agre eme nts , o r o r d e r s which p r e s c r i b e t h e efflu e n t restrictio n s thes e p o l i c i e s . set f o r t h in dividual t h a t a p p l y to s e p a r a t e d i s c h a r g e s . t he commission which c o o r d i n a t e s t h e of laws o r to v a r i o u s In t h i s r o l e , th e sets o f Hence, it is im p l e m e n ta t io n and e nf or c e m e nt o f t h e commission In i t s amended e n a b l i n g a c t , rules is guided by procedu res it has e s t a b l i s h e d , plans im pl em en ta tio n and enfor ce men t o f st rea m s t a n d a r d s , and d i r e c t i v e s which a p p l y to th e e f f l u e n t s ta nd a rd s c i t e d above in items 3 and *t. Means o f E s t a b l i s h i n g E fflu en t R estrictio ns The plan s o f im p le m e n t a t io n and enfor ce men t and the af or e me n­ t i o n e d d i r e c t i v e s have ta ken away much o f t h e co m mission's for m er a b ility to e s t a b lis h e f f l u e n t re stric tio n s based upon i t s ad hoc c o n s i d e r a t i o n o f c i r c u m s t a n c e s s ur ro und ing each u n l a w f u l into pu b lic w aters. In e f f e c t , has when a r r i v i n g these r e s t r i c t i o n s a p p lie s at th e o n l y leeway th e commission s t i l l t o those k in d s o f w a s t e ­ loads not covered by e f f l u e n t s t a n d a r d s . When s e t t i n g upon the se kinds o f w a s t e l o a d s , however, th e commission instream c r i t e r i a that pertain level of restrictio n s re s tric tio n s is guide d by to t h e use d e s i g n a t i o n a r e a s downstream from p a r t i c u l a r d i s c h a r g e s . ate discharge in f o r c e D e t e r m i n a t i o n o f the a p p r o p r i ­ t o be pl aced upon th e l a t t e r kinds o f w a s te lo a ds c o n t a i n e d w i t h i n p a r t i c u l a r d is c h a r g e s depends upon f a c t o r s such as t h e ( 1 ) tnstr cam c r i t e r i a a p p l i c a b l e t o downstream use 321 designation areas, (2) e x i s t i n g number o f e n t i t i e s which e m i t a g i v e n kind o f w a s t e lo a d and which a r e p r e s e n t l y thes e use d e s i g n a t i o n a r e a s , by th e s e e x i s t i n g e n t i t i e s , (3 ) amount o f t h e g i v e n w a s t e lo a d e m i t t e d (*t) amount o f t h e w a s t e l o a d expected to be e m i t t e d a t f u t u r e d a t e s and (5) natural l o c a t e d upstream from that is i n t o up stream r e c e i v i n g w a t e r s , c a p a c it y o f r e c e iv in g w aters to a s s i m i l a t e v ariou s k in d s o f w a s t e l o a d s . The Comprehensive S t u d i e s S e c t i o n o f t h e c om mis sion 's s t a f f conducts w a t e r q u a l i t y s t u d i e s o f p a r t i c u l a r r i v e r s and st re a m s . These s t u d i e s c o n s i d e r f a c t o r s l i s t e d above.^ Q u a lit y Control such as those D i v i s i o n o f t h e s t a f f then r e f e r s s t u d i e s when i t d e c id e s upon s p e c i f i c w a s t e lo a d s being e m i t t e d As e x p l a i n e d above , re stric te d the-board The Water t o f i n d i n g s o f thes e re stric tio n s to be p l a c e d upon i n t o p u b l i c w a t e r s by p a r t i c u l a r d i s c h a r g e s . the o n l y kinds o f w a s t e lo a d s t h a t need to be in t h i s manner a r e those which a r e no t d e a l t w i t h by a c r o s s standards, o r e f f l u e n t standards. 2 E f f l u e n t S ta nd a rd s and E q u i t y R e g a rd le s s o f what th e a u t h o r o r anyone e l s e t h i n k s about e f f i c i e n c y outcomes o f e f f l u e n t standards, th e s e s ta n d a r d s e x i s t . the From V o r ex am pl e , see S t a t e o f M i c h i g a n , Bureau o f Water Management, Water Resources Commission, P in e R i v e r Water Q u a l i t y Stud y: 1 9 67 - 1 9 70 ( L a n s i n g , The B ure au , 1 9 7 0 )O t h er r i v e r s and streams which have been the s u b j e c t o f w a t e r q u a l i t y s t u d i e s a r e l i s t e d in b i e n n i a l r e p o r t s o f th e bureau and t h e commission. 2 G e n e r a l l y s p e a k i n g , e f f l u e n t s t a n d a r d s a p p l y t o no nde gr a da bl e w a s t e lo a d s such as phosphate compounds. Consequently, e f f l u e n t r e s t r i c ­ t i o n s f o r b i o d e g r a d a b l e w a s t e l o a d s a r e t h e p r i m a r y kind s o f r e s t r i c t i o n s which a r e e s t a b l i s h e d by t h e Water Q u a l i t y C o n t r o l D i v i s i o n w i t h r e f e i — ence g i v e n t o w a t e r q u a l i t y s t u d i e s . 322 the standpoint o f the c r i t e r i a those components o f e f f l u e n t and c o n c e p t s a bo u t e q u i t y g i v e n a bov e, r e s t r i c t i o n s which p e r t a i n c ov ere d by t h e s e s t a n d a r d s a r e a t basis. Th a t they re q u ir e is , l e a s t e s t a b l i s h e d on an e q u i t a b l e such components a r e e s t a b l i s h e d w i t h u n i f o r m i t y s i n c e t h e same p e r c e n t a g e o f c e r t a i n w a s t e l o a d s from d i s c h a r g e s made by a l l As e x p l a i n e d b e lo w , however, in d u s tria l p l a n t s o r by a l l t h i s does n o t a d o p t i n g and E fflu en t to be w i t h h e l d m u n icip a litie s. imply t h a t a l 1 a s p e c t s o f d e c i s i o n - m a k i n g pr o c e s s e s which have r e s u l t e d s t a n d a r d s meet to wasteloads In th e c h o i c e o f e f f l u e n t t h e a u t h o r ' s v a l u e c o nc e pt s abo ut e q u i t a b l e means o f in itia tin g water p o llu t io n control measures. R e s t r i c t i o n s and E q u i t y The a u t h o r is n o t c e r t a i n about th e d e g r e e o f u n i f o r m i t y and f a i r n e s s which c h a r a c t e r i z e t h e a f o r e m e n t i o n e d proce ss o f e s t a b l i s h i n g those components o f e f f l u e n t not cove red by e f f l u e n t r e s t r i c t i o n s which p e r t a i n standards. g u id e th e conduct o f w a t e r q u a l i t y when d e c i d i n g upon s p e c i f i c w a s te lo a d s c o n t a i n e d T h e r e a r e no for m al t o w a s t e lo a d s r u l e s which s t u d i e s and t h e use o f re s tric tio n s th e s e s t u d i e s t o be p l a c e d upon c e r t a i n in p a r t i c u l a r d i s c h a r g e s . Such r u l e s would have t o dea l w i t h m a t t e r s such as t h e means by which the Comprehensive Studies Section p r o je c ts s p e c ific t h e amount o f w a s t e l o a d s re ce iv in g w aters a t prescribed fu tu re dates. r u l e s would tend to bind t h e Water Q u a l i t y C o n t r o l n i t e set o f decision-m aking c r i t e r i a water q u a l i t y does no t as it Moreover, D ivisio n into these to a d e f i ­ considers the fin d in g s o f s t u d i e s and p r e s c r i b e s s p e c i f i c recommend t h a t an y such f o r m a l to be d i s c h a r g e d re s tric tio n s . The a u t h o r r u l e s be r e q u i r e d . But he i 323 does recommend t h a t t h e commission know and make known t h e e s t i m a t e d degree t o which t h e combined s e t s o f e f f l u e n t a t any g i v e n time by a l l r e c e iv in g waters grow th. It r e s t r i c t i o n s being faced d i s c h a r g e s p r e s e n t l y l o c a t e d a lo n g g iv e n le a v e any room f o r f u t u r e p o p u l a t i o n and economic i s , moreover, recommended t h a t t iv e capacity of d i f f e r e n t th e a l l o c a t i o n o f a s s i m i l a ­ r e c e i v i n g waters^ be accomplished w i t h c o o r d i n a t i o n r e q u i r e d among t h e Water Resources Commission and i t s s t a f f and those s t a t e and l o c a l e n t i t i e s which h e lp d e t e r m i n e p l a n s , p o l i c i e s , and programs a f f e c t i n g land u s e , economic dev e lo p m e nt , and population d i s t r i b u t i o n . These recommendations r e q u i r e some e x p l a n a t i o n . referred rules t o above a r e not suggested because o f two ba sic c o n s i d e r a t i o n s . Such r u l e s would be d i f f i c u l t technical (2) Formal problems predicting in vo lv e d to p r e s c r i b e because o f a n a l y t i c a l in ( I ) and monitoring e x is t in g discharges, the amount o f v a r i o u s w a s te lo a d s to be c o n t a i n e d w i t h i n d i s c h a r g e s a t some f u t u r e d a t e , and ( 3 ) d e t e r m i n i n g the c a p a c i t y o f s p e c i f i c w a t e r s t o a s s i m i l a t e and t r a n s p o r t p a r t i c u l a r w a s te lo a d s w i t h o u t exceeding instream w a t e r q u a l i t y c r i t e r i a . F u r t h e r m o r e , the a ut ho r b e l i e v e s t h a t once e f f l u e n t r e s t r i c t i o n s have been pl ace d effect in t o t h e i r j u d i c i o u s n e s s c o u ld be de te rm in e d by r e v i e w i n g p r o p e r l y reported grievance hearings. 2 * 0 f c o u r s e , in str ea m w a t e r q u a l i t y c r i t e r i a o f stream s t and ar ds set an upper l i m i t on th e use t h a t can be made o f the c a p a c i t y which v a r i o u s r e c e i v i n g w a t e r s have t o a s s i m i l a t e and t r a n s p o r t d i f f e r e n t wasteloads. 2 C e r t a i n recommendations g i v e n below p e r t a i n and r e p o r t i n g o f th e s e h e a r i n g s . to th e conduct 32*» Coordination o f Regulatory P o lic ie s Through G r ie v a n c e H e a r in g s Af or em e nt io ne d general recommendations c a l l a d m i n i s t r a t i v e proce ss T h i s recommended process would fo r fo rm aliza tio n o f a in s t e a d o f s p e c i f i c w o rk in g insure t h a t e f f l u e n t rules. re s tr ic tio n s are placed upon w a s t e l o a d s not covered by e f f l u e n t s t a n d a r d s o n l y a f t e r c o o r d i n a t i o n has been a c h i e v e d among c e r t a i n gove rnm ent al p r o c e s s , however, would no t o n l y p e r t a i n efflu e n t re s tric tio n s . regulatory p o lic ie s coordinated. tional This t o t h e e s t a b l i s h m e n t o f such I t would a l s o r e l a t e listed u n its . t o proc e du re s whereby a l l above a r e a d o p t e d , a d m i n i s t e r e d , The process he re by r e f e r r e d to and is now e x p l a i n e d as a d d i ­ recommendations a r e made about t h e conduct o f r e g u l a t o r y p o lic ie s . Before proceeding, recommendations r e v e a l le t i t be s a i d th e a u t h o r ^ po sition that the aforementioned t h a t a d m i n i s t r a t i o n and e nforce ment o f s u b j e c t r e g u l a t o r y p o l i c i e s should be f l e x i b l e enough to t a k e i n t o account governmental p l a n s , o b j e c t i v e s , and a c t i v i t i e s which i n f l u e n c e t h e d i s t r i b u t i o n o f p o p u l a t i o n and th e v a r i o u s w a t e r and r e l a t e d recommendations c o n s i d e r land us es . Furthermore, inform ational the foregoing requirem ents o f c e r t a i n o f r e s e a r c h t h a t a r e recommended b e l o w . to a s c e r ta in locatio n o f lines Such r e s e a r c h would a t t e m p t th e e f f e c t s o f proposed and e x i s t i n g r e g u l a t o r y and a s s i s t a n c e measures upon t h e economic development o f s u b s t a t e r e g i o n s . P r e c e d i n g recommendations p e r t a i n lish ing e f f lu e n t s o l e l y t o means o f e s t a b ­ r e s t r i c t i o n s upon k in d s o f w a s t e l o a d s which a r e n o t covered by e x i s t i n g e f f l u e n t however, is lik e ly sp ecific in d u stries standards. The range o f such w a s t e l o a d s , t o be narrowed as e f f l u e n t a r e promu lga ted standards a p p l ic a b le to in acco rda nc e w i t h th e F e d e r a l 325 Water P o l l u t i o n C o n t r o l Act Amendments o f 1972. thus r e p r e s e n t a n o t h e r means by which f e d e r a l These l a t t e r standards p o l i c i e s have reduced the freedom o f t h e M ic hi ga n Water Resources Commission t o d e t e r m i n e efflu e n t re s tric tio n s .' Yet, t h e commission remains as the a d m i n i s ­ t r a t i v e body t h a t d i s c h a r g i n g e n t i t i e s firs t address when e x p r e s s in g d i s p l e a s u r e about th e l e v e l o f r e s t r i c t i o n s which they f a c e . The commission, receives in o t h e r words, is s t i l l t h e body which i n i t i a l l y and hears t h e s e g r i e v a n c e s and which n o r m a l l y g r a n t s e x c e p t i o n s t o and delays In t h e meet in g o f e x i s t i n g re s tric tio n s . 2 To be s u r e , such e x c e p t i o n s and d e l a y s a r e made in a manner which a t t e m p t s to a v oi d breaking, at least in any o v e r t and s u s t a i n e d ' m a n n e r , those stream and e f f l u e n t s t a n d a r d s which a r e s u b j e c t to f e d e r a l enfor ce men t in th e absence o f a d e qu a te s t a t e e n f o r c e m e n t . Recommendations which im m e d ia te ly f o l l o w a r e addressed to th e conduct and r e p o r t i n g o f g r i e v a n c e h e a r i n g s . recommendations, are b r i e f l y however, the B e f o re e x p l i c a t i n g th e s e laws and r u l e s which gu id e thes e h e a r in g s reviewed. P r i o r t o 1965, t h e commission was guided o n l y by i t s own e n a b l i n g a c t d u r i n g t h e process o f s e t t i n g e f f l u e n t r e s t r i c t i o n s upon i n d i v i d u a l p o i n t s ou r c e s . During t h e y e a r s s in c e 1965, however, the commission's freedom in t h i s r e s p e c t has been reduced c o n s i d e r a b l y . T h i s is discu ss ed in C ha pt e rs I I and X. 2 E x c e p t io n s and d e l a y s in m e et in g st rea m and e f f l u e n t stan dar ds can, o f c o u r s e , be g r a n t e d by p a r t i e s t o e nfo rc em ent c o n f e r e n c e s and by f e d e r a l w a t e r p o l l u t i o n c o n t r o l a u t h o r i t i e s . Y e t , even in the se cases t h e e x c e p t i o n s o r d e l a y s u s u a l l y have t o be r e f l e c t e d in amend­ ments to e x i s t i n g r e s t r i c t i o n s which t h e commission a d m i n i s t e r s v i a p e r m i t s , a gr e e m e n t s , o r f i n a l o r d e r s o f d e t e r m i n a t i o n . 326 S e c t i o n 8 ( a ) o f t h e e n a b l i n g a c t o f t h e commission s t a t e s : Whenever any person s h a l l f e e l h i m s e l f a g g r i e v e d by th e r e s t r i c t i o n [p l a c e d upon h i s d i s c h a r g e ] , he may f i l e a sworn p e t i t i o n w i t h the commission, s e t t i n g f o r t h t h e grounds and reasons f o r h i s c o m p la i n t and a s k i n g f o r a h e a r in g o f t h e ma t­ t e r involved. The commission s h a l l thereupon f i x th e time and p l a c e f o r th e h e a r in g and n o t i f y th e p e t i t i o n e r t h e r e o f . At t h e h e a r i n g t h e p e t i t i o n e r and any o t h e r i n t e r e s t e d p a r t y may a p p e a r , p r e s e n t w it n e s s e s and submit e v i d e n c e . F o l l o w i n g th e h e a r i n g , the f i n a l o r d e r o f d e t e r m i n a t i o n o r p e r m i t o f the commission s h a l l be c o n c l u s i v e u n le ss reviewed in accordance w i t h Act No. 306 o f th e P u b l i c A ct s o f 1969, as amended. . . . ^ The g r i e v a n c e h e a r i n g s a u t h o r i z e d reported m is s io n in S e c t i o n 8 ( a ) a r e conducted and in accordance w i t h r u l e s o f proc edu re e s t a b l i s h e d by t h e comits e lf. 2 These h e a r in g s c o n s i s t o f Testimony and e v id e n c e a r e f i r s t two s e q u e n t i a l parts. p r e s e n te d b e f o r e a H e a r in g Commis­ s i o n e r , who is a member o f the commission's s t a f f d e s i g n a t e d by the commission. Then t h e commission c o n s id e r s (which in c l u d e s h is r e p o r t , and o r a l re commendations), b r i e f s o r e x c e p t i o n s arguments. the s e v e r it y o f e f f l u e n t d e la y s th e co m m is si on e r' s The commission de c id e s re stric tio n s in com plia nce t o r e s t r i c t i o n s report to t h i s (by v o t i n g ) whether should be lessened o r whether should be a l l o w e d . P r e vi o u s pages have expressed th e a u t h o r ' s views t h a t means of enforcing He has, regulatory p o lic ie s therefo re, I. u n i f o r m , and open. f o r p r i n c i p l e s and r u l e s which would: e x p l i c i t l y r e p o r t t r a d e - o f f s made d u r i n g t h e e n f o r c e ­ ment process between the o f t e n - c o n f l i c t i n g o b j e c t i v e s o f c o n t r o l l i n g p o l l u t i o n and d e v e l o p i n g r e g i o n a l economies, ^Act 2 k 5 , 2 called should be j u s t , P u b l i c A ct s o f 1929, as amended. These r u l e s a r e c o n t a in e d in S t a t e o f M i c h i g a n , Water Resources Commission, "M ic hi g an Water Resources Commission Rules o f P r o c e d u r e , J u l y 1, 1962: Rules 1 - 9 . " n . d . (Mimeographed.) 327 2. p r e s c r i b e u n i f o r m c r i t e r i a f o r d e t e r m i n i n g when any s p e c i f i c e n t i t y o r impact subgroup is s u f f e r i n g undue economic h a r d s h i p because o f t h e e nf or c e m e nt o f reg u­ latory p o lic ie s , 3. improve l i n e s o f communication and c o o r d i n a t i o n between t h e Water Resources Commission (and i t s s t a f f ) and the M ich ig an Department o f Commerce, and k. b e t t e r c o o r d i n a t e t h e enf or c e me nt o f r e g u l a t o r y p o l i ­ c i e s w i t h t h e e x e c u t i o n o f a s s i s t a n c e programs. When compared t o th e s e c r i t e r i a , th e process o f co n d u c t in g g r i e v a n c e h e a r i n g s t u r n s o u t as f o l l o w s . ^ e nv ir o n m e n t a l q u a l i t y and economic development o b j e c t i v e s co ul d be c o n s id e re d in th e s e h e a r i n g s , considered. A lt h o u g h t r a d e - o f f s between no r u l e s requ i r e t h a t th e y a c t u a l l y be And a l t h o u g h such t r a d e - o f f s c o u 1d be me ntioned pre pared by th e H e a r in g Commissioner o r by th e commission r u l e s requ i r e t h a t they a c t u a l l y be r e p o r t e d . in r e p o r t s its e lf, no The a u t h o r r e a d i l y admits t h a t he has no t examined a r e p r e s e n t a t i v e sample o f th e r e p o r t s o f h e a r i n g s to d e t e r m i n e how o f t e n e x p l i c i t men tion has been made o f subject t r a d e - o f f s . a r e not w e l l He is led t o b e l i e v e , however, equipped e i t h e r t o r e c o g n i z e and t a k e r a m i f ic a t i o n s o f these t r a d e - o f f s or to report which a r e r e cog niz ed and c o n s i d e r e d . t h a t t h e h e a r in g s i n t o account many those r a m i f i c a t i o n s This statement is made in l i g h t o f c ir c u m st a n c e s now t o be e x p l a i n e d . N e i t h e r th e commission nor it s s t a f f places a high p r i o r i t y upon a c q u i s i t i o n o f knowledge about t h e economic e f f e c t s o f p o l i c i e s ^The f o l l o w i n g comments p e r t a i n to g r i e v a n c e h e a r i n g s . But they c o u l d , w i t h s l i g h t m o d i f i c a t i o n , a l s o a p p l y e i t h e r t o h e a r in g s conducted d u r i n g t h e process o f a r r i v i n g a t p e r m i t s and o r d e r s o f d e t e r m i n a t i o n o r to h e a r i n g s he ld in response t o a p p l i c a t i o n s f o r new o r in cre as ed use o f w a te r s o f t h e s t a t e f o r was te d i s p o s a l pu rposes. 328 and programs i t a d m i n i s t e r s and c o o r d i n a t e s . process o f a d o p t i n g w a t e r q u a l i t y s t a n d a r d s , r e q u i r e d such e f f e c t s balance, To be s u r e , d u r i n g t h e federal t o be s t u d i e d , c o n s i d e r e d , and r e p o r t e d . ' however, o b s e r v a t i o n s made in a r e c e n t tiveness o f M ichigan's water p o llu t i o n control terize On r e p o r t about t h e e f f e c ­ program seem to c h a r a c ­ th e p r e v a i l i n g a t t i t u d e o f t h e commission and observations law and g u i d e l i n e s Its s ta ff. These read: Th er e has been a s u b s t a n t i a l p l a n n in g e f f o r t u n d e rt a k e n by the WRC. T h is e f f o r t has c o n c e n t r a t e d on p l a n n i n g r e l a t e d to w a t e r q u a l i t y and a l a r g e number o f r i v e r s t u d i e s keyed to enforcement problems have been conducted by [ i t s ] s t a f f in recent years. . . . M is s in g has been a c o n c e r t e d a t t e m p t to measure t h e s o c i a l and economic c o s t s o f t h e problems d i s c o v e r e d thr ough such planning e f f o r t s . Because o f t h e high p r i o r i t y a t t a c h e d to e n f o r c e m e n t , p l a n n in g has been d i r e c t e d away from such pr o b ­ lems. U n t i l t h e p l a n n in g e f f o r t is d i r e c t e d toward d e t e r m i n i n g s o c i a l and economic c os ts o f p o l l u t i o n , i t w i l l not be p o s s i b l e t o d e t e r m i n e the e x t e n t t o which p o l l u t i o n abatement e f f o r t s have c o n t r i b u t e d toward improvement o f th e h e a l t h , r e c r e a t i o n a l c a p a c i t i e s , or economic s i t u a t i o n o f M ic h ig a n c i t i z e n s . In a d d i t i o n to " e n f o r c e m e n t " c o n c e r n s , a n o t h e r f r e q u e n t l y mentioned r a t i o n a l e f o r no t mounting a c o n c e n t r a t e d st udy o f s o c i a l and economic consequences o f p o l l u t i o n is the assumption t h a t because th e law r e q u i r e s a c e r t a i n l e v e l o f e nfo rc em ent and com plia nce anyway i n f o r m a t i o n r e g a r d i n g soc io -e c on om ic con­ sequences could not be used f o r program g u i d a n c e . The obvious c o n c lu s io n from such a sta te m e nt is t h a t e i t h e r t h e a ge n c ie s wish no change in th e program o r t h a t th e y f e e l t h a t th e l e g i s ­ l a t u r e ( o r Congress) would not respond to s o c i a l and economic data. ^ The above sta te m e nt is d i r e c t e d to shortcomings o f p l a n n in g e f f o r t conducted by t h e commission and its s ta ff. th e o v e r a l l This s t a t e ­ ment ag re es w i t h concepts developed by th e a u t h o r d u r i n g t h e course o f The commission s t a f f pr e pa re d r e p o r t s which took i n t o account the p r e s e n t and p r o s p e c t i v e f u t u r e uses o f w a t e r and r e l a t e d land uses w ith in vario u s r i v e r basins. For an e v a l u a t i o n o f th e e f f e c t i v e n e s s o f these r e p o r t s , r e f e r to C ha pte rs M and X. 2 S ta te o f Michigan, H ea lth Impact P r o j e c t , p. 5* 329 t h i s s tu dy . It w i ll, mendations proce ed. therefo re, It be r e f e r r e d t o a g a in as thes e recom­ is g i v e n a t t h i s p o i n t , however, t o s up p or t th e v i e w p o i n t t h a t g r i e v a n c e h e a r in g s do not t a k e p l a c e w i t h i n an in stitu tio n a l m i l i e u which f o s t e r s th e c o n s i d e r a t i o n o f economic e f f e c t s o f p u b l i c measures to c o n t r o l w a t e r p o l l u t i o n . The p o i n t t h a t such h e a r in g s cannot be expected t o ta k e such e f f e c t s account if is into th e s e t t i n g w i t h i n which t h e y o p e r a t e d o e s n ' t do s o . This is not t o say t h a t n ^ economic e f f e c t s a r e d e l i b e r a t e d d u r i n g g r i e v a n c e hearings. Most c e r t a i n l y , th e s e h e a r i n g s would not o f t e n e x i s t w i t h o u t some p a r t i e s c l a i m i n g t h a t t h e y e i t h e r a r e or would be a d v e r s e l y a f f e c t e d by d i r e c t c o s t s r e q u i r e d t o meet e n f o r c e d r e s t r i c t i o n s . over, it is d i f f i c u l t to More­ imagine t h a t d u r i n g th e s e h e a r i n g s such p a r t i e s do not u s u a l l y p r e s e n t te s ti m o n y and e v id e n c e a bo u t such c o s t s and t h e i r e f f e c t s . But mere r e c e i p t and r e p o r t i n g o f such te s ti m o n y and ev ide nc e does no t n e a r l y b r i n g the process o f c o n d u c t in g the h e a r in gs up to th e a u t h o r ' s stan dar ds about what t h a t process should in c l u d e from th e s t a n d p o i n t o f e q u i t y . For one t h i n g , o p e n ly . g r i e v a n c e he a r in g s coul d be conducted more Based upon thes e h e a r i n g s , t h e commission d e c id e s whether o r not to lessen any re q u ir e m en t s o f e f f l u e n t c ha rg ing e n t i t i e s . re s tric tio n s facing d is ­ P a r t i c u l a r l y when i t makes d e c i s i o n s about r e s t r i c t i o n s fa ced by l a r g e the power to a f f e c t , a t in dustrial plan ts, least p o t e n t i a l l y , and income o f e n t i r e p l a n t s , t h e l e v e l o f employment f i r m s , o r even i n d u s t r i e s and o f communi­ t i e s o r even s u b s t a t e r e g i o n s . The a u t h o r recommends, t h e n , t h e commission w i e l d s Such power should not be ta ken l i g h t l y . that in c e r t a i n f o r m a l l y p r e s c r i b e d 330 situations^ the commission be r e q u i r e d t o p u b l i c i z e and hold p u b l i c h e a r in g s t h a t a r e r e p o r t e d v e r b a t i m . These open p u b l i c h e a r i n g s should be he ld or r e g i o n in which a g g r i e v e d p a r t i e s a r e l o c a t e d . he ld a f t e r e n t i t i e s have a i r e d commissioner and th e commission 2 They should o n l y be t h e t r cases b e f o r e both t h e h e a r i n g i t s e l f and decided upon proposed e x c e p t i o n s o r ing r e s t r i c t i o n s . in th e community These p r o p o s a l s w i t h n o t i c e s which announce ensuing after delays, if th e commission has t h e r e be a n y , in e x i s t - should then be d i s s e m in a t e d alo n g public hearings. During th e s e h e a r i n g s , any i n t e r e s t e d i n d i v i d u a l o r group should be a ll o w e d t o ex press vie ws about m e r i t s o f th e commission's pr o p o s al s or a 1t e r n a t i v e s t h e r e t o . Economists working f o r t h e s t a f f o f th e com­ m ission, f o r th e M ich ig an Department o f Commerce, o r f o r community o r regional development a g e n c ie s should be c a p a b le o f e s t i m a t i n g the mag­ n i t u d e and in c i d e n c e o f e f f i c i e n c y , impacts which would r e s u l t d e v e l o p m e n t a l , and d i s t r i b u t i o n a l from p r o p o s al s o r from re a s o n a b le The time and expense in v o lv e d in open p u b l i c h e a r i n g s is j u s t i f i e d in two kind s o f s i t u a t i o n s . One is when th e commission's d e c i s i o n s about e f f l u e n t r e s t r i c t i o n s c o u ld s u b s t a n t i a l l y a f f e c t th e economic w e l l - b e i n g o f a community o r r e g i o n . _ A n o t h e r would be when th e r e s i d e n t s o f a community o r r e g i o n p e t i t i o n t h e commission f o r an open h e a r in g o f t h e t y p e now bein g r e f e r r e d t o . 2 Sessions b e f o r e the h e a r in g commissioner and the commission a r e u s u a l l y not open t o th e g e n e r a l p u b l i c . T h is is d e s i r a b l e because the p a r t y r e q u e s t i n g t h e h e a r i n g has a chance t o o f f e r as e v id e nc e c o n f i d e n t i a l records and r e p o r t s about h i s economic c ir c um st a nc e s and the e f f e c t s o f d i r e c t c o s t s t o c o n t r o l p o l l u t i o n upon th e s e c i r c u m ­ s t a n c es . Any subsequent open p u b l i c h e a r in g s need no t r e v e a l these c o n f i d e n t i a l r e co rd s and r e p o r t s . Y e t , the s e subsequent h e a r i n g s coul d r e f e r t o s e l e c t e d k in d s o f f i n a n c i a l and economic d a t a (such as t h a t on employment and wages) which would s t i l l a l l o w p a r t i c i p a n t s in the h e a r ­ ings t o understand th e range o f d i r e c t economic e f f e c t s t h a t might r e s u l t from s t r i c t e n fo r c e m e nt o f a l t e r n a t i v e s e ts o f e f f l u e n t r e s t r i c ­ tions. 331 a lte rn a tiv e s. p r ia t e plans, P u b l i c a g e n c ie s should p r e s e n t p o lic ie s , and programs which i n f l u e n c e w a t e r and r e l a t e d land us es , community and r e g i o n a l and d i s p e r s a l . i n f o r m a t i o n about a p p r o ­ A tten tion d e v e lo p m e n t , and p o p u l a t i o n grow th should be d i r e c t e d t o t h e e x t e n t which t h e commission's p r o p o s a l s and r e l e v a n t a l t e r n a t i v e s a g r e e w i t h p o lic ie s , and programs. the s e p l a n s , P e r t i n e n t a c r o s s - t h e - b o a r d and t a r g e t e d a s s i s t a n c e programs should be di sc us s e d from t h e s t a n d p o i n t o f t h e i r a b ility t o h e l p t h e a g g r i e v e d p a r t i e s and s u r r o u n d in g a r e a s a d j u s t t o the requirements o f e x i s t i n g , propo sed , o r a l t e r n a t i v e sets o f e f f l u e n t r e s t r i c t Io ns. ^ The commission should be r e s p o n s i b l e f o r c o m p i l i n g and d i s ­ s e m i n a t in g v e r b a t i m r e p o r t s o f th e a f o r e m e n t i o n e d p u b l i c h e a r i n g s . Accompanying thes e r e p o r t s should be a s t a t e m e n t s e t t i n g f o r t h com mission's f i n a l d e c i s i o n about t h e a p p r o p r i a t e e f f l u e n t t o be fac ed by p a r t i e s which i n i t i a t e d with th is r e p o r t and s t a t e m e n t , the hearing process. th e re s tric tio n s Along th e commission should be r e q u i r e d t o e x p la in or discuss: 1. reasons why i t s f i n a l d e t e r m i n a t i o n o f a p p r o p r i a t e r e s t r i c t i o n s di d o r d i d not amend i t s proposed r e s t r i c ­ t i o n s , i . e . , what t o p i c s c o n s i d e r e d a t a g i v e n h e a r i n g had an i n f l u e n c e upon i t s d e c i s i o n e i t h e r t o amend or not t o amend, 2. ma jor t r a d e - o f f s made between v a r i o u s p u b l i c o b j e c t i v e s and p l a n s when t h e f i n a l r e s t r i c t i o n s were b e in g d ec ide d upon, These recommendations about the; conduct o f p u b l i c h e a r i n g s , as w e l l as th os e about t h e r e p o r t i n g t h e r e o f , assume t h a t c e r t a i n o f th e recommendations which f o l l o w a r e a c t u a l l y c a r r i e d o u t . T h is becomes e v i d e n t as t h e d i s c u s s i o n p r oc e e ds . 332 3- th e e x t e n t to which t h e f i n a l d e t e r m i n a t i o n o f r e s t r i c ­ t i o n s ab id ed by r u l e s s p e c i f y i n g those economic c i r c u m s t a n c e s which should e x i s t b e f o r e any e x c e p t i o n s t o o r d e l a y s in e f f l u e n t r e s t r i c t i o n s a r e a u t h o r i z e d . A. e s t i m a t e s o f t h e g e n e r a l economic e f f e c t s t h a t t o r e s u l t from s t r i c t enf or c e me nt o f t h e f i n a l r e s t r i c t i o n s , and 5. a s s i s t a n c e programs t h a t may be used t o h e lp any a d v e r s e l y a f f e c t e d e n t i t i e s o r impact subgroups a d j u s t t o th e s e economic e f f e c t s . * stand Oth er Recommendations About Regu1a to r y P o I r c i es P u b l i c h e a r i n g s o f t h e above ty pe would r e s u l t adm inistratio n of regulatory p o lic ie s . Recommendations about th e s e h e a r in g s has assumed t h a t o t h e r a d m i n i s t r a t i v e placed into e f f e c t . fa c ilita te means o f of These o t h e r innovations, i n n o v a t i o n s would be however, would not o n l y t h e u n if o r m conduct o f such h e a r i n g s . improving th e (1) They would a l s o be knowledge base r e q u i r e d f o r e q u i t a b l e conduct r e g u l a t o r y p o l i c i e s and a s s i s t a n c e programs, fo rm ity of the e n t ir e in t h e more open (2 ) j u s t i c e and u n i ­ process t hr ou g h which t h e s e p o l i c i e s and programs a r e c o n c e p t u a l i z e d , a d o p t e d , a d m i n i s t e r e d , and e n f o r c e d , and (3) amount o f c o o r d i n a t i o n t h a t e x i s t s among v a r i o u s p u b l i c b o d i e s , p a r t i c u l a r l y between t h e M ich ig an Water Resources Commission and i t s s t a f f and the Michiga n Department o f Commerce. These o t h e r i n n o v a t i o n s a r e now i d e n t i f i e d s e t o f recommendations and then e x p l a i n e d by th e f o l l o w i n g in t h e subsequent d i s c u s s i o n . The a u t h o r recommends t h a t : * T h i s assumes t h a t r u l e s would d e l i n e a t e those economic c i r c u m ­ stances which q u a l i f y c e r t a i n e n t i t i e s and impact subgroups f o r the r e c e i p t o f a i d from v a r i o u s t a r g e t e d a s s i s t a n c e programs. 333 1. persons w i t h a working knowledge o f re so ur ce economics and r e g i o n a l economics be pl aced in r e s p o n s i b l e p o s i ­ t i o n s on th e s t a f f o f t h e M ich ig an Water Resources Commi ss i o n , 2. t h e D i r e c t o r o f t h e M ic hi ga n Department o f Commerce, o r h i s d e s i g n a t e d r e p r e s e n t a t i v e , become a member o f the M ic h ig a n Water Resources Commission, 3. r u l e s o f t h e commission be changed t o a l l o w t h e a f o r e ­ mentioned t y p e o f p u b l i c h e a r i n g s to be h e l d , r u l e s o f th e commission s p e c i f y those economic c i r c u m ­ s ta nc es which must p r e v a i l b e f o r e any d i s c h a r g i n g e n t i t y Is g r a n t e d any e x c e p t i o n s to o r d e l a y s in e x i s t ­ ing e f f l u e n t r e s t r i c t i o n s , 5. r u l e s o f th e commission s p e c i f y those economic c i r c u m ­ s ta nc es which must p r e v a i l b e f o r e any d i s c h a r g i n g e n t i t y o r impact subgroup q u a l i f i e s f o r the r e c e i p t o f a i d from v a r i o u s t a r g e t e d a s s i s t a n c e p r o g r a m s ,' and 6. v e r b a t i m re co rd s be p u b li s h e d o f h e a r i n g s he ld b e f o r e any co mmittee o r subcommittee o f t h e M ich ig an L e g i s 1a t u r e . I f most o f th e recommendations made in t h i s c h a p t e r a r e t o be implemented, then governmental operations o f th e S t a t e o f M ich ig an w i l l have to be based upon c o n s i d e r a b l y g r e a t e r knowledge about th e adv ers e and b e n e f i c i a l research w i l l e f f e c t s o f p o l i c i e s and programs. have to be conducted m ate , economic e f f e c t s in o r d e r to l e a r n a b o u t , o r e s t i ­ t h a t stand t o r e s u l t from proposed o r ensuing measures and t h a t have a l r e a d y r e s u l t e d author m aintains th a t Much a d d i t i o n a l this p r i m a r i l y upon i n t e r m i t t e n t from e x i s t i n g measures. research e f f o r t The cannot r e l y e x c l u s i v e l y o r s t u d i e s t h a t a r e supported by s t a t e funds These r u l e s a r e recommended in t h i s s u b s e c t io n i n s t e a d o f the subsequent s u b s e c t io n because one reason f o r recommending t h a t th e M ich ig an Department o f Commerce be r e p r e s e n t e d on th e commission is t h a t I t coul d e s t a b l i s h c o o r d i n a t i o n between r e g u l a t o r y p o l i c i e s and thes e t a r g e t e d a s s i s t a n c e programs. I 33*t and conducted by c o n s u l t a n t s o r u n i v e r s i t i e s . t o him t h a t this Rather, it is e v i d e n t r e s e a r c h e f f o r t must a r i s e from w i t h i n s t a t e ag en c ie s t hem sel ves . Only then can needed r e s e a r c h be c a r r i e d o u t on a sus­ t a i n e d b a s is in consonance w i t h d a i l y o p e r a t i o n s and l o n g - r a n g e o b j e c t i v e s and pl a n s o f thes e a g e n c i e s . re so ur ce dev elop men t, and r e c e i v e adequate and in s titu tio n a l social science, In th e f i e l d o f natural such a r e s e a r c h e f f o r t must be m u l t i d i s c i p l i n a r y i n f o r m a t i o n from n a t u r a l , e n g i n e e r i n g , sciences. Among the se g e n e r a l i t appears t o th e a u t h o r t h a t from the economic realm have been most a r e a s o f s c ie n c e or inform ational la c k i n g inputs in r e se a r ch conducted o r supported by a g e n c ie s o f th e S t a t e o f M ic h i g a n . u n d e r l y i n g m o t iv e s f o r s e v e r a l economic, Thus, one o f the recommendations made h e r e i n in c r e a s e the q u a n t i t y and improve th e q u a l i t y o f is to inform ational inputs from t h e economic r e a l m . The f i r s t and second recommendations reflect t h i s motive. above (and d e t a i l e d The kind o f l i s t e d above p a r t i c u l a r l y r e se a r ch u n d e r t a k i n g trained economics such as r e s o u r c e economics and r e g i o n a l sioned by the a u t h o r , these persons would Water Resources Commission, o f Commerce. (2) the Economic in branches o f economics. As e n v i ­ ( 1 ) work on th e s t a f f o f the s e rv e as members o f th e commission, Impact U n i t o f th e M ich ig an Department A lt ho u gh a f o r e m e n ti o n e d recommendations do not p e r t a i n to s t a f f i n g o f th e Economic Impact U n i t , its a c t iv it ie s to in f o r th c om in g recommendations) would have to depend upon th e e x p e r t i s e o f s t a t e personnel and (3) work w i t h i n referred th e p r e v io u s d e s c r i p t i o n o f i n d i c a t e t h a t economists would be include d among the team o f r e s e a r c h e r s which' would study economic impacts o f e x i s t i n g 335 w a t e r p o l l u t i o n c o n t r o l measures. It Is assumed t h a t t h e D i r e c t o r o f the Department o f Commerce, o r h i s r e p r e s e n t a t i v e , would b r i n g t h e s o u g h t - a f t e r kind o f economic e x p e r i e n c e to t h e c om m is si on 's member­ s h ip . At p r e s e n t , however, the s t a f f o f the commission la c k s s u f f i c i e n t persons w i t h t h e kind o f t r a i n i n g h e r e t o f o r e d e s c r i b e d . * No s u gg es tio ns a r e o f f e r e d about the d i v i s i o n o r s e c t i o n o f th e co mm ission's s t a f f which should house the recommended e c o n o m is t s . Perhaps th e amount and n a t u r e o f th e work o f t h e s e persons c a l l s th e ir incorporation i n t o a new d i v i s i o n o r s e c t i o n the kin d s o f s t u d i e s and a c t i v i t i e s however, for responsible for o u t l i n e d be low. It is c l e a r , t h a t such economists should be p o s i t i o n e d so t h a t work c l o s e l y w i t h th e Comprehensive S t u d i e s S e c t i o n , t h e y can th e Enforcement S e c t i o n , and the Water Development S e r v i c e s D i v i s i o n o f t h e c om m is si on 's s taff. Al tho ug h needed, it plish it is d i f f i c u l t to t e l l how many eco nom ist s would be is recommended t h a t t h e y be s u f f i c i e n t in number to accom­ ta s ks such as t h e f o l l o w i n g : 1. conduct r e s e a r c h on economic e f f e c t s o f p o l i c i e s and programs, proposed 2. r e p o r t r e s e a r c h r e s u l t s in r i v e r b a s in s t u d i e s con­ ducted by the Comprehensive S t u d i e s S e c t i o n , in s t u d i e s o f proposed and p r o s p e c t i v e f u t u r e w a t e r and r e l a t e d land uses p r e p a r e d by the Water Development S e r v i c e s D i v i s i o n , o r in o t h e r k i n d s o f s t u d i e s , 3. p r o v i d e economic a s s i s t a n c e t o th e commission, to the Enforcement S e c t i o n , and t o d e s i g n a t e d H e a r in g T h i s is not t o say t h a t such persons a r e not p r e s e n t l y on th e commission's s t a f f . The a u t h o r knows o f one s t a f f members w i t h t r a i n ­ ing in re so ur ce economics whose t a l e n t s a r e n o t , in th e a u t h o r ' s o p i n i o n , being u t i l i z e d p r o p e r l y . The kind s o f t a s k s me ntioned below a r e hereby con s id e re d the p r o p e r use o f such t a l e n t s . 336 C o m m i s s i o n e r s du ri n g the process o f e s t a b l i s h i n g e f f l u ­ e n t r e s t r i c t i o n s to be placed upon i n d i v i d u a l d i sc ha r ge s o r d u r i n g t h e conduct o f g r ie v a n c e h e a r i n g s , k. p r e p a r e s t a t e m e n t s about economic e f f e c t s o f proposed or e x i s t i n g measures t h a t a r e presented b e f o r e v a r i o u s publ i c h e a r i n g s or b e f o r e he ar in gs conducted by the M i c h i g a n L e g i s l a t u r e , Congress, o r f e d e r a 1- s t a t e e n f o r c e ­ ment c o n f e r e n c e s , 5- h e l p f o r m u l a t e recommended r u l e s which s p e c i f y those c ir c u m ­ s t a n c e s in which ha rds hip cases q u a l i f y f o r l e n i e n t r e g u l a t o r y and enforcement measures and a i d from t a r g e t e d a s s i s t a n c e programs, 6. keep a n e y e o u t f o r , f o r m u l a t e hypotheses a b o u t , and o t h e r w i s e h e l p the Economic Impact U n i t e v a l u a t e the e c o n o m ic e f f e c t s o f e x i s t i n g p o l i c i e s and programs and o f t h e j o i n t e f f e c t s o f two o r more ex i st ing p o l i c i e s or prog r a m s . ^ U nle ss p r o p e r l y c o o r d i n a t e d , commission's s t a f f Economic that and Impact U n i t th e D i r e c t o r sentative, of the f u n c t i o n s o f economists on the t h e f u n c t i o n s o f economists working f o r the c o u l d be d u p l i c a t i v e . recommending t h e Michigan Department o f Commerce, or h is r e p r e ­ s e r v e a s a member o f the commission is to e f f e c t c o o r d i n a t i o n between th e s e two g r o u p s o f economists. re s p o n s ib ilitie s programs. One reason f o r If s t u d y o n l y the Impact U n i t has impacts o f e x i s t i n g p o l i c i e s and t h e a f o r e m e n t i o n e d tasks were taken up by economists on t he com m iss io n's such s t u d i e s , to The Economic s ta ff, t h e y would ass i st the Economic Impact U n i t they themselves would o n l y have r e s p o n s i b i l i t y f o r bu t th e conduct o f r e s e a r c h about As a member o f the Commerce would be in impacts o f proposed p o l i c i e s and programs. c o m m is s i o n , a r e p r e s e n t a t i v e from the Department o f i n an e x c e l l e n t p o s i t i o n to know about plans and The d i s t r i b u t i o n a l e f f e c t s r e vea led by t h i s study i n d i c a t e kinds o f economic e f f e c t s t h a t these economists co ul d c o n s t a n t l y watch ou t f o r . 337 a c tiv itie s o f bo th groups o f e c o n om is ts . could see to it ou t t h i s No o t h e r member o f th e commission, r e p r e s e n t a t i v e from i n d u s t r i a l im p o r t a n t including the management g r o u p s , cou ld c a r r y function is o n l y one among s e v e r a l t h a t coul d to by a r e p r e s e n t a t i v e upon th e commission from th e M ic hi ga n Department o f Commerce. would b r i n g representative function. This c o o r d in a tio n be a t t e n d e d this t h a t th e s e p l a n s and a c t i v i t i e s were a u g m e n t a t i v e , and not d u p l i c a t i v e . c itize n s ' Therefore, The a u t h o r assumes t h a t this representative t o t h e commission work ing knowledge about c u r r e n t economic development measures and t a r g e t e d a s s i s t a n c e programs c a r r i e d out by various l e v e l s o f gove rnm ent. departments Along w i t h o t h e r d i r e c t o r s o f s t a t e {or t h e i r designated on the commission, it o b jectives, p o lic ie s , plans, is assumed t h a t he would a l s o know about the and programs o f government which p e r t a i n t o th e use o f w a t e r and r e l a t e d dispersal of po pulation. p e r s p e c t i v e s and r e p r e s e n t a t i v e s ) who a r e p r e s e n t l y land r e s o u r c e s and t o th e growth and He w o u ld , therefo re, be a b l e to o f f e r i n s i g h t s about how w a t e r p o l l u t i o n c o n t r o l new measures should be c o o r d i n a t e d w i t h th e s e measures and w i t h economic d e v e l o p ­ ment measures. p rio ritie s t he He would a l s o be in a p o s i t i o n and p r e f e r e n c e s o f in d u strial in d u strial to r e p r e s e n t the and commercial groups b e s id e s management groups which a r e , in e f f e c t , th e o n l y such groups now r e p r e s e n t e d upon th e commission. G e t t i n g down to s p e c i f i c f u n c t i o n s , a member o f th e Water Resources Commission from th e Department o f Commerce c o u l d , among other things: 4 338 1. offer v a l u a b l e a s s i s t a n c e to th e commission and I t s when t r a d e - o f f s a r e d ifferen t q u ality , staff I d e n t i f i e d and d e s c r i b e d among o b j e c t i v e s t h a t l e v e l s o f government have about improving e nv ir o n m e n t a l s t i m u l a t i n g economic d e v e lo p m e n t , d i r e c t i n g w a t e r and r e l a t e d land u s e s , and d i s p e r s i n g p o p u l a t i o n , 2. p r o v i d e much needed ideas about how to t i o n between enf or c e m e nt o f w a t e r p o l l u t i o n control improve c o o r d i n a ­ r e g u l a t i o n s and conduct o f a d j u s t m e n t a s s i s t a n c e pro gr am s,* 3. e n titie s h e l p w r i t e and a d m i n i s t e r q u ality for le n ie n t r u l e s which s p e c i f y when c e r t a i n t r e a t m e n t from r e g u l a t o r y p o l i c i e s and f o r a i d from a d j u s t m e n t a s s i s t a n c e programs, and A. present the view p oints o f c e r t a i n a r e a f f e c t e d by p u b l i c w a t e r p o l l u t i o n c o n t r o l have not a d e q u a t e l y been r e p r e s e n t e d . . commission. i n t e r e s t groups which measures but which by any p r e s e n t member o f the 2 T h i s f u n c t i o n would become even more a p p a r e n t i f th e M ic h ig a n Department o f Commerce a c t u a l l y became t h e s t a t e agency r e s p o n s i b l e f o r p r e p a r a t i o n and d i s t r i b u t i o n o f t h e c a t a l o g o f a s s i s t a n c e programs t h a t Is recommended below. 2 T h i s s t a t e m e n t about in ad eq ua te r e p r e s e n t a t i o n is a v a l u e judgment. I f h e a r i n g s he ld by th e M ic h ig a n L e g i s l a t u r e on p r o p o s a l s f o r th e M ic h ig a n Department o f Commerce to be d i r e c t l y r e p r e s e n t e d on t he commission had been p u b l i s h e d , however, the a u t h o r v e n t u r e s t o say t h a t t h e y would c o n t a i n s t a t e m e n t s by c e r t a i n i n t e r e s t groups e x p r e s s i n g t h e i r l a c k o f such r e p r e s e n t a t i o n . To th e a u t h o r ' s way o f t h i n k i n g , t h e p r e s e n t makeup o f the commission i n a d e q u a t e l y r e p r e s e n t s the p r i o r i t i e s and p r e f e r e n c e s o f l a b o r o r g a n i z a t i o n s , small I n d u s t r i a l f i r m s , commercial e n t e r p r i s e s , and r e g i o n a l development a g e n c i e s . Each o f t h e s e groups has an I n t e r e s t in p u b l i c measures to c o n t r o l w a t e r p o llu tio n . And members o f these groups have d i r e c t d e a l i n g s w i t h p e r ­ sonnel who work f o r t h e M ich ig an Department o f Commerce. 339 Du rin g recent years, several b ills p r o p o s in g t h a t the Michigan Dep art m ent o f Commerce be r e p r e s e n t e d upon t h e W a t e r Resources Com­ m i s s i o n have been autho r's introduced to the Michigan L e g i s l a t u r e . kno w le dg e , ho we ver , none o f th e s e b i l l s r e p o r t e d o u t o f c o m m it t e e f o r a f l o o r v o t e . upon reason s f o r the u n fa v o ra b le le g is la tiv e reception of these prop osals, hearings. a l l o w the proceedings o f have e v e r been The a u t h o r can s p e c u l a t e cannot s u b s t a n t i a t e any such s p e c u l a t i o n s w i t h c e e d in g s o f references of i t s c om m it t e es t o be p u b l i s h e d . recommendation g i v e n above w h ic h c a l l s such p r o c e e d i n g s . d u ct e d f o r studies If of various for This f a c t the verbatim reporting r e s e a r c h con­ such as t h i s would be g r e a t l y f a c i l i t a t e d . i n t e n t and to u n d e rs ta n d i n t e r e s t groups w i t h grams whose economic e f f e c t s , a r e b e in g s t u d i e d . to the pro­ have le d t o th e such r e p o r t s were a v a i l a b l e , i m p o r t a n t t o know l e g i s l a t i v e kin d s o f c on ce rns t h a t respect to e x i s t i n g it is important It is th e v i e w p o i n t s p o licies p a rtic u la rly d is trib u tio n a l Furthermore, but he The M i c h i g a n L e g i s l a t u r e does n o t p l u s t h e a u t h o r ' s c o n c e p t s o f openness and f a i r n e s s sixth To t h e and p r o ­ effects, t o know ab ou t t h e v a r i o u s groups have e x p r e s s e d a b o u t p o l i c i e s and programs which have been proposed bu t which a r e e i t h e r a w a i t i n g a f l o o r v o t e o r have been r e j e c t e d by t h e l e g i s l a t i v e process.' B esi des h e a r i n g s h e l d on a c t s wh ich propose t h a t a r e p r e ­ s e n t a t i v e from th e M i c h i g a n Dep artme nt o f Commerce be p l a c e d upon th e co m m is si on , t h i s s tu d y c o u l d have e s p e c i a l l y made use o f the p r o c e e d i n g s o f h e a r i n g s h e l d on t h e s t a t e ' s i n d u s t r i a l t a x e x e m p t io n program. T h i s p o i n t is emphasized b e lo w . 3*tO Recommendations About S t u d i e d A s s i s t a n c e Programs P r e c e d i n g pages have p r e s e n t e d that if subsidies t h e a u t h o r ' s v a l u e conc ept t o m u n i c i p a l i t i e s and t a x e x em pt io ns t o p r o v i d e d i r e c t b e n e f i t s t o any e n t i t y w i t h i n a g i v e n then a l l e n titie s b en e fits . w i t h i n t h a t group should be a b l e Guided by t h i s th e s e programs have been made in consonance w i t h should be . 1. It in dustries impact group to a p p ly f o r these p r e m i s e , d e s i r a b l e means o f a d m i n i s t e r i n g id e n tifie d . The f o l l o w i n g recommendations a r e t h e f o r e g o i n g s t a t e m e n t a bo u t wh at t h e s e means is recommended t h a t : the Federal W a t e r Q u a l i t y A d m i n i s t r a t i o n and t h e M ic h i g a n W a te r Resources Commission ado pt r u l e s whereby u n i f o r m and open enforcement Control is p o s s i b l e o f p r o v i s i o n s A c t Amendments o f which f e d e r a l grants in t h e F e d e r a l 1972 wh ich r e q u i r e have p r o v i d e d to Wate r P o l l u t i o n reco very o f cost savings in d u s tria l customers o f p u b l i c fac i 1 i 11es, 2. t h e s e same a g e n c i e s ado pt r u l e s whereby p r e t r e a t m e n t s t a n d a r d s bei n g issued in a c co rd an c e w i t h th e 1972 amendments can be u n i f o r m l y and o p e n l y e n f o r c e d , 3- M ic h i g a n m u n i c i p a l i t i e s which o p e r a t e w a s t e w a t e r t r e a t m e n t works be r e q u i r e d p a rtic u la r t o r e v i e w and u p d a t e t h e i r th os e s e c t i o n s w h ic h p e r t a i n w a s t e w a t e r s and t o c h a r g e s *». out this levied upon r e v i e w and u p d a t i n g o f in a c c o rd a n c e w i t h sewer o r d i n a n c e s , to r e c e i p t o f in d u s tria l in in d u strial customers, sewer o r d i n a n c e s be c a r r i e d r u l e s and model o r d i n a n c e s p r e p a r e d by th e 3*il Michigan Department o f P u b l i c H e a l t h and f o r m a l l y adopted by t h e M i c h i ­ gan Water Resources Commission,^ 5. M ic h ig a n law r e q u i r e and commission r u l e s d i r e c t that those m u n i c i p a l i t i e s which r e c e i v e f u r t h e r g r a n t s from th e e x i s t i n g $335 m i l l i o n bond program o r from any subsequent s t a t e sub sid y program r eco ver any c o s t s a vi ng s which t h e r e b y a c c r u e to 6. provisions o f a l l federal in d u s tria l cus tom ers , and M ich ig an subsid y programs and ta x exemption programs in th e f i e l d o f w a t e r p o l l u t i o n c o n t r o l summarized be in the c a t a l o g o f a s s i s t a n c e programs recommended in the f o l l o w i n g s u b s e c t i o n , and 7. when Congress and th e M ich ig an L e g i s l a t u r e approve a c r o s s - t h e - b o a r d a s s i s t a n c e programs t h a t f o r the ade quate p u b l i c i t y , th e y a u t h o r i z e s u f f i c i e n t a d m i n i s t r a t i o n , and m o n i t o r i n g o f funds the programs. These recommendations de se rve a few e x p l a n a t o r y comments. They do no t r e f e r to studies th a t ducted about s u b j e c t programs. s ub se que ntl y made. t h e a u t h o r b e l i e v e s should be con­ Recommendations f o r such s t u d i e s a r e Nor do th e s e recommendations r e p e a t t h e one made in the p r e c e d in g s u b s e c ti o n about th e r e p o r t i n g o f proc ee din gs o f h e a r in gs b e f o r e committees o f e ls e w h e r e the M ich ig an L e g i s l a t u r e . in t h i s d i s s e r t a t i o n , s i z e about reasons why c e r t a i n however, sizes, As e x p l a i n e d the a u t h o r could o n l y hy p o t h e ­ c la s s ific a tio n s , and l o c a t i o n s o f m a n u f a c t u r in g p l a n t s had no t a p p l i e d v e r y f r e q u e n t l y f o r c e r t i f i c a t e s Whese r u l e s and model o r d i n a n c e s , i t is recommended, should r e f l e c t and i n c o r p o r a t e th e kinds o f r u l e s r e f e r r e d t o in th e f i r s t , second, and f i f t h recommendations o f t h i s l i s t . 3*2 o f exemption under M i c h i g a n ' s t a x exemption program. ses c o u ld p r o b a b ly have been more w e l l had been a v a i l a b l e . (1) program, p o s i t i o n s o f those stated argued f o r o r a g a i n s t o f f i r m s and p l a n t s . in a d o p t i n g t h e I n t e r e s t groups which e i t h e r th e program, and (3) e x t e n t t o which b e n e f i t s f o r by d i f f e r e n t kind s F u r t h e r m o r e , such pr o c e e d in g s would have p r o ­ i n f o r m a t i o n about th e amount o f c o n s i d e r a t i o n g i v e n d u r i n g t h e l e g i s l a t i v e process t o t h e need f o r tional such p r o c e e d in g s i n t e n t o f th e l e g i s l a t u r e from t h e program were e x pe cte d t o be a p p l i e d v id e d if I t would have then been p o s s i b l e t o l e a r n about m a t t e r s such as t h e (2 ) founded These hy p o t h e ­ agency s t a f f personnel the program. During s t a t e monies to p u b l i c i z e , a d m i n i s t e r , and m o n i t o r i n t e r v i e w s w i t h persons who c a r r y o u t the a u t h o r le a r n e d t h a t d i s t r i b u t i o n a l could not be ta ken money l i m i t a t i o n s . consequences o f i n t o acco unt o r a d j u s t e d to pay enough a t t e n t i o n exemption program, t h e program f o r because o f th e f e d e r a l t im e and or s ta te to th e a d d i t i o n a l t h a t adopted programs and p o l i c i e s w i l l i s t r a t i v e agencies. t h e program, As w i t h o t h e r s t u d i e d programs and p o l i c i e s o f bo th a r e g u l a t o r y and an a s s i s t a n c e n a t u r e , process f a i l s in s up p or t o f a d d i ­ le g is la tiv e requirements impose upon d e s i g n a t e d adm in­ P a r t i c u l a r l y w ith respect to M ic h ig a n ’ s tax th is study has found t h a t such f a i l u r e t he reasons why t h e d i s t r i b u t i o n o f program e f f e c t s is among is o f t e n uneven among v a r i o u s groups and s ub gr ou ps. A d d i t i o n a l Recommendations About th e C o o r d i n a t i o n o f R e g u l a t o r y P o l i c i e s and A s s i s t a n c e Programs C r i t e r i a o f c h o i c e which guided th e e x p l o r a t o r y phase o f t h i s study r e s u l t e d in o b j e c t i v e s t o l e a r n about t h e d i s t r i b u t i o n o f economic 343 effects from b o th r e g u l a t o r y p o l i c i e s and a s s i s t a n c e pr ograms. next s e c tio n i n c l u d e s recommendations t h a t f u t u r e consider j o i n t grams. effects from The s tu d ie s con tin u e to i n t e r r e l a t e d groups o f p o l i c i e s and p r o ­ On ly th e s e k in d s o f s t u d i e s can l e a r n a b o u t combined e f f e c t s o f several d ifferen t p u b l i c m e a s u r e s - - e f f e c t s which on b a l a n c e may be q u i t e in m agn itu de and c a te d by s t u d i e s on i n c i d e n c e from summation o f e f f e c t s in dividual measures a n a l y z e d f o r t h c o m i n g recommendations a r e me ntioned a t this sep arately. in d i­ These p o i n t t o emphasize t h a t a d m i n i s t r a t i v e means o f c o o r d i n a t i o n now t o be recommended w o u ld , If implemented, depend upon inform atio nal i n p u t s from f u t u r e r e s e a r c h . Comments ab ou t recommended means t o c o o r d i n a t e regulatory p o l i c i e s and a s s i s t a n c e programs can be b r i e f because o f what has been said above. These means have been in mind when g i v i n g recommendations about r e p r e s e n t a t i o n o f th e M ic h i g a n Department o f Commerce upon t h e Water Resources Commission and about r u l e s r e g u l a t o r y p o l i c i e s and q u a l i f i c a t i o n s Furthermore, s p e c ify in g exceptions f o r a s s i s t a n c e programs. t h e s e means have been c o n s i d e r e d when c i t i n g c o nc e pt s a bo u t t h e need f o r c l o s e w o rk in g r e l a t i o n s h i p s who a d m i n i s t e r r e g u l a t o r y p o l i c i e s , development programs. 1. between persons W i t h o u t r e p e a t i n g any recommendations g i v e n recommendations p e r t a i n p o l i c i e s and pro gra m s. norm ative a s s i s t a n c e prog rams, and economic a bov e, bu t w i t h r e f e r e n c e t o t h e s e n o r m a t i v e c o n c e p t s , ad d itio n al from it th e f o l l o w i n g t o the c o o r d i n a t i o n o f subject is recommended t h a t : The M ic h i g a n Department o f Commerce be h e ld f o r the p re p a ra tio n o f a ca talo g s t a tin g provisions of a l l and M ic h i g a n a s s i s t a n c e programs wh ich may be a p p l i e d responsible federal f o r by 3*1*1 e n t i t l e s and subgroups a d v e r s e l y a f f e c t e d by e n f o r c e d w a t e r p o l l u t i o n control regulatio ns,^ 2. t h i s c a t a l o g a l s o summarize f e d e r a l p o l i c i e s and p r o c e d u r e s which p e r t a i n and M ic h i g a n r e g u l a t o r y to th e c o n t r o l o f e f f l u e n t s e m i t t e d by p o i n t s o u r c e s , 3. t h i s c a t a l o g be updated and r e v i s e d a n n u a l l y , **. t h i s c a t a l o g be d i s t r i b u t e d to a l l sources whose e x i s t i n g d i s c h a r g e s a r e a c t u a l l y re stric tio n s individ ual point s ubjec t to e f f l u e n t a d m i n i s t e r e d by t h e M ic h i g a n W a t e r Resources Commission, 2 and 5- t h i s c a t a l o g be d i s t r i b u t e d to a l l in d ivid u al point sources whose p o s s i b l e f u t u r e d i s c h a r g e s m ig h t become s u b j e c t e fflu e n t to r e s t r i c t i o n s a d m i n i s t e r e d by th e commission. This coordinating subsection o n ly includes recommendations about means o f r e g u l a t o r y p o l i c i e s and a s s i s t a n c e programs. g i v e n recommendations, however, have r e f e r r e d Previously t o c o o r d i n a t i o n between p u b l i c w a t e r p o l l u t i o n c o n t r o l measures and o t h e r p u b l i c measures ^Such a s s i s t a n c e programs i n c l u d e what a r e h e r e i n termed a c r o s s - t h e - b o a r d programs and a d j u s t m e n t , o r t a r g e t e d , programs. The l a t t e r t y p e o f programs a r e t h e ones which a r e recommended t o be made a v a i l a b l e on t h e b a s i s o f d e t e r m i n a t i o n s o f nee d, o r h a r d s h i p , p r e ­ s c r i b e d by u n i f o r m r u l e s . 2 Such sources i n c l u d e a l l e n t i t i e s whose d i s c h a r g e s a r e sub­ j e c t to e i t h e r perm its, s t i p u l a t i o n s , orders o f d e te rm in a tio n , or f i n a l o r d e r s o f d e t e r m i n a t i o n a d m i n i s t e r e d by t h e commission. 3 Such sources i n c l u d e a l l e n t i t l e s c o n s i d e r i n g e i t h e r t h e l o c a ­ t i o n o f new e s t a b l i s h m e n t s w i t h i n M ic h i g a n o r t h e ex pa ns io n o f a c t i v i t i e s w i t h in the s t a te th a t c r e a te e f f l u e n t discharges. Thus, such sourc es i n c l u d e those which must a p p l y f o r a p e r m i t t o make new o r in c r e a s e d use o f w a t e r s o f t h e s t a t e f o r w a s t e d i s p o s a l pu rposes. 3 ^5 which i n f l u e n c e th e use o f n a t u r a l r e s o u r c e s and th e d i s t r i b u t i o n o f p o p u l a t i o n and economic a c t i v i t y . Recommendations o f t h i s n a t u r e have p a r t i c u l a r l y been r e f e r r e d in t h e p u b l i c h e a r i n g process to recommended a b o v e . ' Recommendations About th e Conduct o f F u r t h e r Research I n t r o d u c t ion The f i n a f further ob jective of th is r e s e a r c h on economic is to recommend a r e a s f o r impacts o f w a t e r p o l l u t i o n c o n t r o l p o l i c i e s and programs c a r r i e d o u t improving p o s s i b i l i t i e s study in M ic h ig a n and to suggest means f o r f o r such r e s e a r c h . about t h e conduct o f p o l i c i e s and programs tions for setting in s titu tio n a l i n c l u d e numerous sugges­ changes which would p r o v i d e an improved f o r a lo n g - t e r m process o f s u b j e c t economic e f f e c t s . recommendations about The above recommendations This r e s e a r c h and p l a n n i n g section, therefore, related to need o n l y p r o v i d e r e s e a r c h t o be conducted o r sponsored by S t a t e o f M ic h ig a n a ge n c ie s me ntioned in th e p r e v i o u s section. Assumptions About F u t u r e Research Goals Recommendations about f u t u r e estim ate o f r e s e a r c h should be based upon some t h e g o a l s t o be approached by t h a t research. The f o l l o w i n g ^Nothing has been s a id in t h i s s u b s e c t i o n o f recommendations about th e need f o r a d m i n i s t r a t i v e means which i n s u r e t h a t c o o r d i n a t i o n is m a i n t a i n e d among a l l t h e v a r i o u s p u b l i c measures which a r e des igned t o improve t h e q u a l i t y o f w a t e r , l a n d , and a i r r e s o u r c e s . Omission o f thes e recommendations does no t i n d i c a t e t h a t such m a t t e r s o f c o o r d i n a ­ t i o n a r e not i m p o r t a n t . In de ed , t h e y a r e . The a u t h o r , however, does not have t h e knowledge o r e x p e r i e n c e t o o f f e r any p a r t i c u l a r recommenda­ t i o n s a lo n g the s e 1 in e s . 3*»6 recommendations proceed a c c o r d i n g t o two b a s i c assumptions about such goals. One Is t h a t S t a t e o f M ic h i g a n a g e n c ie s w i l l place in to e f f e c t many o f t h e a d m i n i s t r a t i v e and c o o r d i n a t i v e measures recommended above. The second is t h a t those a ge n c ie s w i l l informed about be guided by a goal t o keep impacts o f p u b l i c w a t e r p o l l u t i o n c o n t r o l measures upon the s t a t e ' s economy and upon p e r t i n e n t s e c t o r a l , r e g i o n a l , and o t h e r impact groups and subgroups. F r u i t f u l Types o f F u t u r e Research I d e n t i f i e d From D i f f i c u l t i e s Encountered in E x p l o r a t o r y Research One f r u i t f u l type o f f u t u r e r e s e a r c h recommended below is the p e r i o d i c r e p e t i t i o n and u p d a t i n g o f c e r t a i n p a r t s o f t h i s using c u r r e n t d a t a . If fu tu r e research aforementioned g o a l, however, then is to be o r i e n t e d by th e it w ill types o f r e s e a r c h t h a t a r e q u i t e d i f f e r e n t for this study. or predict These o t h e r t h e magnitude and been discussed fac t-fin d in g in Chapters III have to be in v o lv e d w i t h from r e s e a r c h c a r r i e d out lin e s o f research w i l l have t o e s t i m a t e i n c i d e n c e o f economic e f f e c t s t h a t have and IV but have not been p a r t o f th e r e s e a r c h conducted f o r t h i s revealed several re s e a r c h study. E x p lo ra to ry research reasons why none o f the se o t h e r could be include d w i t h i n th e scope o f t h i s These reasons can be grouped as bein g r e l a t e d t e r e d when t r y i n g to: lines o f study's to re s e a r c h r e s e a r c h methods. d iffic u ltie s encoun­ 1. c o n c e p t u a l i z e th e f i n a l in c i d e n c e o f c e r t a i n bene­ f i c i a l e f f e c t s from improvements in w a t e r q u a l i t y , 2. d e t e r m i n e p a t t e r n s o f response by v a r i o u s impact sub­ groups t o r e g u l a t o r y p o l i c i e s and a s s i s t a n c e programs, 3^7 3* a r r i v e a t methods o f r e s e a r c h which i n d i c a t e the mag­ n i t u d e and i n c i d e n c e o f economic e f f e c t s , and k. f i n d d a t a and i n f o r m a t i o n which p r o v i d e e i t h e r monetary o r nonmonetary measures o f th e s e e f f e c t s . in t h e a u t h o r ' s e s t i m a t i o n , th re e general type s o f research have t h e most promise o f overcoming the a f o r e m e n ti o n e d d i f f i c u l t i e s . These types o f poration o f r e s e a r c h would i n v o l v e much more than j u s t improved and updated d a t a o f r e s e a r c h e s t a b l i s h e d by t h i s study. th e in co r­ i n t o th e framework and methods They would i n v o l v e both the i n c o r p o r a t i o n o f new impact groups and subgroups w i t h i n a s i m i l a r r e s e a r c h framework and th e conduct o f methods much d i s s i m i l a r from those conducted f o r to a r e e x p l i c a t e d this study. The types o f r e s e a r c h hereby r e f e r r e d in the next s u b s e c t i o n . They include re s e a r c h th at would: 1. r e p e a t , expand, and r e v i s e t h e framework o f r e s e a r c h and s p e c i f i c methods developed by t h i s s t u d y , 2. i n i t i a t e case s t u d i e s which i n v o l v e d e t a i l e d e v a l u a t i o n s o f economic impacts upon s p e c i f i c e n t i t i e s o r impact subgroups, and 3. i n c o r p o r a t e d a t a and i n f o r m a t i o n such as t h a t used in t h i s st udy i n t o m u l t i v a r i a t e s t a t i s t i c a l a n a ly s e s f o r the purpose o f e x p l a i n i n g and p r e d i c t i n g response p a t t e r n s (and i n t e r g r o u p d i f f e r e n c e s in thes e p a t t e r n s ) t o p a r t i c u ­ l a r p o l i c i e s and programs. S p e c i f i c Li n e s o f Recommended Research F u r t h e r Use o f Framework and Methods Developed by T h is Study C h a p te r VI summarizes and Appendix E p r o v i d e s d e t a i l s o f the framework o f r e s e a r c h which g i v e s s t r u c t u r e t o s p e c i f i c methods used in t h i s study. p re s en te d R e s u l t s of . m e t h o d s o r g a n i z e d by t h i s in Chapters V I I through IX . framework a r e Recommendations 1 and 2 3*8 pertain to t h e r e p e t i t i o n , improvement, and e x t e n s i o n o f and methods deve lope d by t h i s t h e framework study. Recommendation 1 . — At p e r i o d i c f u t u r e i n t e r v a l s , use u p - t o d a t e i n f o r m a t i o n and d a t a t o r e p e a t s p e c i f i c methods i n c o r ­ p o r a t e d w i t h i n t h e framework o f a n a l y s i s deve lop ed h e r e i n . Recommendation 2 . - - T h r o u g h f u r t h e r e x p l o r a t o r y r e s e a r c h , r e v i s e and e x t e n d both th e s p e c i f i c methods i n c o r p o r a t e d i n t o t h e s u b j e c t framework and th e framework i t s e l f . By c a r r y i n g o u t Recommendation 1, S t a t e o f M ic h ig a n a g e n c ie s can keep a b r e a s t o f changes o v e r t im e effects patterns of p o licies, from s u b s i ­ Knowledge can be ga in ed about s h i f t s r e s e a r c h frame wo rk. programs, and in in clu de d in A dj ust m ent s can then be made to in stitu tio n a l reinforce or revise patterns o f ments w i l l , effects i n c i d e n c e among impact groups and subgroups the e x i s t i n g pr oce dur es in an a t t e m p t i n c i d e n c e found t o e x i s t . to Such a d j u s t ­ o f c o u r s e , have to be guided by some s t a n d a r d s o f e q u i t y i n c i d e n c e o f e f f e c t s which have been a r r i v e d a t by governmental and p o l i t i c a l p r o c e s se s . Si n ce t h e t im e when e x p l o r a t o r y th is study, in d u s tria l r e s e a r c h was conducted f o r improvements have been made in th e type o f d a t a used in t h i s study. During t h e l a t e 1960s, and m u n i c i p a l d i s c h a r g e r s to s t r i c t e r and l i b e r a l i z e d however, in c i d e n c e o f ad v e rs e from r e g u l a t o r y p o l i c i e s and o f b e n e f i c i a l d i e s and t a x ex em pt io ns . in th e in th e responses by i n d i v i d u a l regulatory p o lic ie s f u l l y developed. Now, the M ic hi ga n Water Resources Commission has had s e v e r a l ye ar s to a r r i v e a t a s s i s t a n c e programs had no t y e t i n f o r m a t i o n and in d iv id u a lly ta ilo re d sets o f e f f l u e n t issued v i a p e r m i t s , which a p p l y to most c h a r g e rs o f w a s t e w a t e r s in d u strial into p u b lic w aters. re s tric tio n s , and m u n i c i p a l now dis­ D i s c h a r g e r s have had more 3*19 t im e t o d e c i d e how t o respond t o th e s e r e s t r i c t i o n s , S taffs of or perm its. t h e W at er Resources Commission and the O f f i c e o f Economic Expansion o f t h e M ic hi ga n Department o f Commerce have been a b l e to g a i n much more e x p e r i e n c e managers c l a i m , in wo rkin g w i t h m a n u f a c t u r i n g p l a n t s w h ic h , th e ir have had to shut down o r reduce o p e r a t i o n s because o f enforced r e g u la to r y p o l i c i e s . Consequently, th e s e s t a f f members should be a b l e to augment f u t u r e e s t i m a t e s o f w o r s t - p o s s i b l e employment losses in p a r t i c u l a r i n d u s t r i e s and re g io n s by making downward a d j u s t ­ ments t o e s t i m a t e s o f w o r s t - p o s s i b l e lo s s e s . Se v er a l more year s have a l s o gone by f o r subsidies to m u n ic ip a litie s the a p p l i c a t i o n gram. from f e d e r a l and M ic h i g a n programs and I n f o r m a t i o n can be k e p t up t o d a t e about th e t y p e , thr ough 5 , s i z e , and systems which have r e c e i v e d s u b s i d i e s and o f m a n u f a c t u r i n g p l a n t s which have a p p l i e d c e rtific a te s . in f o r and r e c e i p t o f t a x exemptions from M i c h i g a n ' s p r o ­ lo c a tio n o f municipal f o r and r e c e i v e d exemption By u p d a t i n g p e r c e n t a g e s r e p o r t e d h e r e i n by T a b l e s 3 t r e n d s can be observed in the s u b s i d i e s among p l a n t s w i t h i n d i f f e r e n t In t h i s the a l l o c a t i o n o f respect, however. It is i n c i d e n c e o f b e n e f i t s from impact groups and subgroups. im p o r t a n t r e c e i p t o f s u b s i d i e s from f e d e r a l to remember t h a t the in d irect programs may now be c u t o f f o r c o n s i d e r a b l y reduced by c o s t - r e c o v e r y p r o v i s i o n s o f th e F e d e r a l Water P o l l u t i o n C o n t r o l Act Amendments o f therefo re, pertain 1972. t o th e conduct o f f u t u r e e x t e n t which m u n i c i p a l Recommendations to f o l l o w , r e s e a r c h t o d e t e r m i n e th e sewer s e r v i c e charges a r e a c t u a l l y a b i d i n g by e x i s t i n g c o s t - r e c o v e r y p r o v i s i o n s . 350 As i n d i c a t e d a bo v e , one t y p e o f ou t Recommendation 1 i s c u r r e n t i n f o r m a t i o n needed t o c a r r y i n f o r m a t i o n about th e a l l o c a t i o n o f s u b s i d i e s and t h e a p p l i c a t i o n and r e c e i p t o f t a x ex em pt io ns . in form atio n Standard is r e q u i r e d about m a t t e r s such as th e number o f w o r k e r s , In dustrial C l a s s i f i c a t i o n , and a d e q u a c y - o f - w a s t e w a t e r - t r e a t m e n t r a t i n g o f each m a n u f a c t u r i n g p l a n t wastewater co n tro l sion. In s te a d o f status lis ts included on c u r r e n t p r e p a r e d by the s t a f f o f th e commis­ r e l y i n g upon sources r e f e r r e d t o fu tu re studies w i l l be a b l e t o o b t a i n much o f t h i s in Appendix E, i n f o r m a t i o n about m a n u f a c t u r in g p l a n t s and o t h e r kind s o f d i s c h a r g i n g e n t i t i e s WISE (Water O t h er I n f o r m a t i o n System— Enforcement) which has been o p e r a t e d s i n c e May, S e c t io n o f th e c o m m is s i o n . ' r e p e t i t i o n s o f methods from th e system o f d a t a p r o c e s s i n g 1971, by t h e Comprehensive S t u d i e s Use o f t h i s in cl ud e d w i t h i n system w ill allo w fu tu re th e r e s e a r c h framework t o be conducted much f a s t e r and w i t h a c o n s i d e r a b l e amount o f c o n s i s t e n c y in t i m e - s e r i e s d a t a . W i th r e g a rd t o Recommendation 2 , t h e r e a r e t h r e e p o s s i b l e ways o f r e v i s i n g and e x t e n d i n g t h e s p e c i f i c methods and the g e n e r a l work used in t h i s s t u d y . (I) frame­ These ways a r e t o conduct r e s e a r c h about p o l i c i e s and programs, ( 2 ) groups and subgroups d i f f e r e n t k in d s o f economic e f f e c t s , and ( 3 ) impact from those s t u d i e d h e r e i n . 'The WISE system has been d e s c r i b e d in th e 1969** 1970 and 1971“ 1972 B i e n n i a l Rep or ts o f t h e Bureau o f Water Management o f the D e p a r t ­ ment o f N a t u r a l Resources. See a l s o Gary G u e n t h e r , Da n ie l M in ca v a ge , and Fred M o r l e y , M ic h i g a n Wate r Resources Enforcement and I n f o r m a t i o n System Socioeconomic En vir on me nta l S t u d i e s S e r i e s , EPA-R5“ 7 3 “ 0 2 0 , U.S. E nv ir on m e n ta l P r o t e c t i o n Agency, O f f i c e o f Research and M o n i t o r i n g (Washington, D . C . : Government P r i n t i n g O f f i c e , 1 9 7 3 ) . 351 Si nce t h i s work began, several kind s o f r e g u l a t o r y measures have been i n s t i t u t e d which have c r e a t e d r e q u i r e m e n t s beyond s p e c i f i c e f f l u e n t r e s t r i c t i o n s and p e r m i t s which a p p l y t o turin g discharges. t i o n program, These new measures i n c l u d e th e o p e r a t o r c e r t i f i c a ­ the s u r v e i l l a n c e f e e program, and r e q u ir e m e n t s t o submit monthly r e p o r t s about th e o p e r a t i o n a l ment f a c i l i t i e s . ^ programs e ffic ie n c y of in d u s tria l I n f o r m a t i o n about th e a d m i n i s t r a t i o n o f is no doubt a v a i l a b l e from th e s t a f f o f in f o r m a t i o n could be used and r e g i o n a l i n d i v i d u a l manufac­ treat­ the se t h e commission. in a n a ly s e s o f th e c l a s s i f i c a t i o n s , T h is sizes, l o c a t i o n s o f m a n u f a c t u r i n g p l a n t s which a r e h a r d e s t pressed to a b i d e by th e new programs. subgroups included The same impact groups and in t h i s st udy could p r o b a b l y be used in these ana 1y s e s . Th is study has e s t i m a t e d p o s s i b l e employment th e d i r e c t losses upon v a r i o u s t h a t would have occ urr ed if impact groups and subgroups r e g u l a t o r y p o l i c i e s designed t o a t t a i n stream st andards had been s t r i c t l y tio n e d above, i n c i d e n c e o f th e w o r s t - and i m m e d ia t e ly e n f o r c e d . the e x p e r i e n c e o f s t a f f members o f As men­ the Water Resources Commission and th e O f f i c e o f Economic Expansion c o u ld a l l o w downward adju stm ent s to be made to any f u t u r e e s t i m a t e s o f w o r s t - p o s s i b l e employment lo s s e s . in direct Futu re s t u d i e s should a l s o a t t e m p t in ci de nc e o f th e magnitude o f employment losse s through the c a l c u l a t i o n and use o f employment m u l t i p l i e r s . for i n s t a n c e , used employment m u l t i p l i e r s e n titled to e s t i m a t e th e A study has , to e s t i m a t e the in d ire c t *These programs a r e in t ro d u c e d in th e s e c t i o n o f t h i s c h a p t e r Recommendations About th e Conduct o f P o l i c i e s and Programs. 352 employment lo ss e s t h a t would have o c c u r r e d as a r e s u l t o f d i r e c t lo sse s w i t n e s s e d by p u lp and paper m i l I s . * A lt h o u g h n o t r e p o r t e d works l i s t e d in Appendix A, in t h i s d i s s e r t a t i o n o r in un p u b li s h e d t h e a u t h o r has a t t e m p t e d t o e s t i m a t e t h e magnitude o f m on et ar y b e n e f i t s a c c r u i n g o v e r t i m e to m a n u f a c t u r i n g d i s c h a r g e r s from s u b s i d i e s and t a x e x e m p t i o n s . not s u f f i c i e n t t o e s t i m a t e t h e magnitude o f such b e n e f i t s upon s p e c i f i c c la s s ific a tio n s , this s izes, and l o c a t i o n s o f p l a n t s . s t u d y was o n l y used moneta ry b e n e f i t s reduction Rather, Current in an a t t e m p t to e s t i m a t e t h e mag nitu de o f municipal laws w i l l in f u t u r e b e n e f i t s subsidies a llo c a t e d fa c ilitie s o r had r e c e i v e d a t a x p r o b a b l y b r i n g about a c o n s i d e r a b l e r e c e i v e d by m a n u f a c t u r i n g p l a n t s in the f u t u r e . Therefore, subgroups o f m a n u f a c t u r i n g p l a n t s from s u b s i d i e s . r e c e i v e d by v a r i o u s The magnitude and i n c i d e n c e o f d i r e c t m onetary b e n e f i t s bei n g r e c e i v e d s till remain a r e l e v a n t t o p i c R at h er than now summarizing methods used measure th e s e b e n e f i t s , le t cor respond w i t h any persons estim ating it from t a x exemptions, fu rth er research. in h i s p r e v i o u s a t t e m p t s t o be s a i d t h a t interested for from f u t u r e s t u d i e s might not need to be concerned w i t h th e mon et ar y b e n e f i t s however, w i l l d a ta used in t o t h a t p a r t o f th e e n t i r e m a n u f a c t u r i n g s e c t o r which e i t h e r had u t i l i z e d ex e m p t i o n . C o l l e c t e d d a t a was th e a u t h o r stan ds ready t o in h i s suggested approaches t o th e mag nitu de o f d i r e c t mon et ar y b e n e f i t s r e c e i v e d by ^ A r t h u r D. L i t t l e , I n c . , " P u l p and Paper M i l l s , " in U . S . , Council on Env iro n me n ta l Q u a l i t y , Department o f Commerce, and E n v i r o n ­ mental P r o t e c t i o n Agency, The Economic Impact o f P o l l u t i o n C o n t r o l : A Summary o f Recent S t u d i e s ( W as hin gto n, D . C . : Government P r i n t i n g O f f i c e , 1 9 7 2 ) , pp. 2 7 7 - 2 9 2 . 353 v a r i o u s subgroups o f m a n u f a c t u r i n g p l a n t s from e i t h e r s u b s i d i e s or ta x exempt i o n s . Chances appear s l i m t o employ the methods and framework o f t h i s study in any f u t u r e work which a t t e m p t s t o e s t i m a t e incidence o f b e n e f i c i a l waters. th e ma gnitude and e f f e c t s from improving t h e q u a l i t y o f s u r f a c e Such work r e q u i r e s d e t a i l e d i n f o r m a t i o n about t h e l e v e l o f r e c r e a t i o n a l , a e s t h e t i c , and p u b l i c h e a l t h b e n e f i t s which co rrespond to d i f f e r e n t levels o f in st r e a m q u a l i t y . below can cope w i t h the c o m p l e x i t i e s b en efits. Case s t u d i e s recommended in v o lv e d in e s t i m a t i n g the se Such s t u d i e s depend upon t h e c o l l e c t i o n o f p r i m a r y da ta about b e n e f i t s and c os ts a c c r u i n g to e n t i t i e s w i t h i n g e o g ra ph ic a r e a s . The s p e c i f i c methods o f this to broad r e g io n s and u t i l i z e d a t a c o l l e c t e d Many o f th e methods o f this re la tiv e ly small s t u d y , however, a p p l y from secondary s ou r c e s . study were dev e lo p ed a f t e r a t r e n d was observed f o r m a n u f a c t u r i n g p l a n t s t o make more use o f m u n i c i p a l t r e a t m e n t works and t h e r e b y g a i n b e n e f i t s the d i r e c t types o f from s u b s i d i e s w h i l e a v o i d i n g r e g u l a t o r y c o n t r o l s o f s t a t e and f e d e r a l in d u strial agencies. e s t a b l i s h m e n t s which emit w a t e r b o r n e w a s t e s , as mines and e l e c t r i c power g e n e r a t i o n f a c i l i t i e s , d is c h a r g e s t o p u b l i c u t i l i t y sewers. Furthermore, a t C o n s e q u e n tl y , many methods o f the time when t h i s underway few no nm an ufa ctu rin g ty pe s o f applied such seldom send any t h i s st udy a r e no t a p p l i c a b l e t o no nm an uf a ct u ri ng type s o f establishm ents. Other in d u strial in dustrial study was g e t t i n g e s t a b l i s h m e n t s had f o r and r e c e i v e d t a x exemptions from M i c h i g a n ' s program. There a p p e a r , then, to be o n l y l i m i t e d new impact groups and subgroups p o s s ib ilitie s to incorporate i n t o t h e methods and framework developed 35* by t h i s study. W o r s t - p o s s i b l e employment impacts o f s t r i c t l y e n fo r c e d regulations could, however, be e s t i m a t e d f o r mines and o t h e r nonmanu­ facturing e n t it i e s f o r which employment is an ade qu a te in dicator o f economic importance. Employment should no t be used as a nonmonetary measure o f p o t e n t i a l economic e f f e c t s upon i n f r a s t r u c t u r e developments such as e l e c t r i c power g e n e r a t i o n f a c i l i t i e s . The F u t u r e Conduct o f Case S t u d ie s Methods o f t h i s or st udy do no t p r o v i d e e s t i m a t e s o f the magnitude in c i d e n c e o f s h o r t - r u n e f f i c i e n c y and lo n g - r u n dev elo pme nta l o f p o l i c i e s and programs to c o n t r o l water p o l l u t i o n . methods p e r t a i n e d t o any b e n e f i c i a l effects water q u a l i t y . Recommendations 3 and * , impacts Nor have these from improving instream t h e r e f o r e , a r e as f o l l o w s : Recommendation 3 . — Conduct case s t u d i e s in s p e c i f i c M ichigan communities to e s t i m a t e th e s h o r t - r u n d i r e c t , i n d i r e c t , and t o t a l e f f e c t s o f i n d i v i d u a l and combined p o l i c i e s and programs. Recommendation * . — Conduct case s t u d i e s o f s p e c i f i c manu­ f a c t u r i n g i n d u s t r i e s w i t h i n chosen s u b s t a t e re g io n s to e s t i m a t e the lo n g - r u n e f f e c t s o f i n d i v i d u a l and combined p o l i c i e s and programs upon th e l o c a t i o n o f i n d u s t r i a l a c t i v i t y and the development o f r e g i o n a l economies. Communities such as Kalamazoo, Monroe, B a t t l e C r e e k , and Wyoming a r e e x c e l l e n t c a n d i d a t e s f o r s t u d i e s designed t o r e v e a l total ( d i r e c t plus In d irect) the e f f e c t s o f enforced r e g u la t o r y p o l i c i e s , s u b s i d i e s to m u n i c i p a l i t i e s , and ta x exemptions t o in dustries. As depicted in Appendix H, th e w a s t e w a t e r t r e a t m e n t works o f these com­ munities receive considerable portions o f t h e i r p r i m a r i l y from l a r g e paper m i l l s , working e s t a b l i s h m e n t s . incoming w a s t e w a t e rs food p r o c e s si n g p l a n t s , o r m e t a l ­ I n p u t - o u t p u t a n a ly s e s which i n c o r p o r a t e 355 w a t e r - u s e and w a t e r - p o l 1u t I o n c o e f f i c i e n t s technical c o e ffic ie n ts in a d d i t i o n can be used to e s t i m a t e t h e d i r e c t , and t o t a l magnitude o f monetary e f f e c t s which f a l l s tu d i e d to normal in d ire c t, i n c i d e n t upon s e c t o r s as a r e s u l t o f t h e enfor ce men t o f r e g u l a t i o n s and the p r o v i s i o n o f s u b s i d i e s and t a x e x em p t i o n s . It growing body o f l i t e r a t u r e about input-output a n a ly s is th e use o f i s recommended t h a t a t h i s manner be c o n s u l t e d to g u i d e f u t u r e s t u d i e s in in s e l e c t e d Michi ga n communities such as t h e ones mentioned a b o v e . ' In t h e d e t a i l e d w r i t e - u p o f e x p l o r a t o r y r e s e a r c h r e f e r r e d In Appendix A, the a u t h o r has c o n c e p t u a l i z e d run developmental A ls o p ro v id ed required to the manner by which lo n g - e f f e c t s from s t u d i e d p o l i c i e s and programs o c c u r . is an e x a m in a t i o n o f the kinds o f s t u d i e s and to e s t i m a t e t h e magnitude and information i n c i d e n c e o f such e f f e c t s . During e x p l o r a t o r y research, however, no s t u d i e s were d i s c o v e r e d which have e s t i m a t e d the lo n g - r u n de ve lo p me nt al e f f e c t s upon s p e c i f i c indus­ t r i e s and r egi on s from enforcement o f r e g u l a t o r y p o l i c i e s and p r o v i s i o n o f a s s i s t a n c e programs in t h e f i e l d o f w a t e r p o l l u t i o n c o n t r o l . I f the For i n s t a n c e , r e f e r to ( 1 ) James E. B l a y l o c k and Lonnie L. Jones, Economic and E c o l o g i c a l i n p u t - O u t p u t M o d e l , A g r i c u l t u r a l Economics Program and Model Documentation 7 3 ~ 2 , The Texas A&M U n i v e r s i t y System, Department o f A g r i c u l t u r a l Economics and Rural S o c i o l o g y , C o l l e g e S t a ­ t i o n , 1973; (2 ) W a l t e r I s a r d , e t a 1 . , Ec ol o gi c -E c on om ic A n a l y s i s f o r Regional Development (New York: Free P r e s s , 1972) ; ( 3 ) W a s s il y L e o n t l e f , ,lEnv ironmen tal Repercussions and t h e Economic S t r u c t u r e : An In p u t - O u t p u t A p p r o a c h ," in Robert Dorfman and Nancy S. Dorfman, e d s . , Economics o f t h e Environment (New York: W. W. Norton 6 C o . , 1 9 7 2 ) , pp. A03-A22; (A) David L, Raphael and James M a u g e r l , "Water Q u a l i t y and Regional Economy, a D e c i s i o n M o d e l , " Proce edin gs o f th e F o u r th American Water Resources C o n f e r e n c e , New Y or k , N . Y . , 1968, pp. 13 2 - 1 3 9 ; and (5) H e r b e r t ti. S t o e v e n e r , e t a l . , M u l t i - D i s c i p l i n a r y Study o f Water Q u ality Relationships: A Case Study o f Yaguina Bay, Oregon, Sp ec ial Report 3 ^ 8 , Oregon S t a t e U n i v e r s i t y , A g r i c u l t u r a l Experiment S t a t i o n , C o r v a l 1 1 s , 1972. 356 methods and framework o f in terv a ls , st ud y a r e repeated a t some n o t i o n m ig h t u n f o l d abo ut t h e d i r e c t term l o c a t i o n a l and r e g i o n s . subjected this and de v e lo p m e n t a l e f f e c t s Selected period ic future in cidence o f upon d i f f e r e n t long­ in dustries I n d u s t r i e s and s u b s t a t e r e g i o n s c o u l d then be t o a much more d e t a i l e d st ud y about d e v e lo p m e n t a l effects. R at h er than now suggest how t h e s e s t u d i e s m ig h t be c o n d u c t e d , d e ta ile d w r ite -u p o f e x p lo ra to ry research fu tu r e attem pts to estim ate is a v a i l a b l e th e f o r use in any long-run e f f e c t s . P o s s ib ilitie s for M u ltiv a ria te S t a t i s t i c a l Ana lys es A key f a c t o r which from e n f o r c e d i n f l u e n c e s th e r e g u l a t i o n s and b e n e f i c i a l incidence o f adverse e f f e c t s effects from s u b s i d i e s pro p o rtio n o f manufacturing p la n ts w i t h i n d i f f e r e n t which send t h e i r w a s t e w a t e r s t o p u b l i c m a n u f a c t u r e r s from s u b s i d i e s g i v e n Is t h e impact subgroups t r e a t m e n t w o rk s . B e n e fits to in s up po rt o f m u n i c i p a l fa c ilitie s could be reduced in th e n e a r f u t u r e i f c o s t-re c o v e ry provisions o f the act are enforced. N e v e r t h e l e s s , m a n u f a c t u r e r s m ig h t 1972 f e d e r a l s till c o n t i n u e to make i n c r e a s i n g use o f m u n i c i p a l b enefits such as those which r e s u l t improvements in t h e i r p u b l i c p u b l i c works instead o f r e l a t i o n s when w a s t e w a t e r s a r e e m i t t e d low c o s t s o f w a s t e w a t e r c o n t r o l As a r e s u l t , in to re la tiv e ly mi gh t c o n t i n u e t o be w i t n e s s e d by those m a n u f a c t u r i n g p l a n t s which use m u n i c i p a l if to g a i n from economies o f s c a l e and from in to p u b lic waters.^ r e s u l t m ig h t be r e i n f o r c e d fa c ilitie s fa c ilitie s . This h i g h e r sewer s e r v i c e c ha r ge s were t o ^More is s a id about t h i s in t h e e a r l i e r e n t i t l e d Toward t h e R e s o l u t i o n o f D i f f i c u l t i e s . section o f th is chapter 357 Induce g r e a t e r use by m a n u f a c t u r e r s o f measures which lowe r o v e r a l l water u t i l i z a t i o n co sts.' re cyclin g , m aterials The upshot o f about t r e n d s Such measures include w ater c o n s e rv a tio n , r e c o v e r y , and b y - p r o d u c t p r o d u c t i o n . this is t h a t f u t u r e s t u d i e s need t o be concerned in t h e amount o f use b e in g made o f m u n i c i p a l by m a n u f a c t u r i n g d i s c h a r g e r s and about causal trends. M u l t i v a r i a t e a n a l y s i s appea rs w e l l studies. fa c to rs underlying by v a r i o u s s ta te or a substate region. represent fa c to rs the s e s u i t e d f o r use in such The depend ent v a r i a b l e would be some i n d i c a t i o n o f o f use made o f p u b l i c f a c i l i t i e s en tire fa c ilitie s in dustries w ith in th e amount the Independent v a r i a b l e s would then such a s : 1. t h e S ta nda rd plants, In d u strial C l a s s i f i c a t i o n o f manufacturing 2. the s i z e o f m anufacturing p l a n t s , 3. t h e volume o f w a s t e w a t e r s d i s c h a r g e d from m a n u f a c t u r i n g pi a n t s , A. the t y p e s o f c o n s t i t u e n t w a s t e lo a d s w i t h i n w a s t e w a t e r s d i s c h a r g e d from m a n u f a c t u r i n g p l a n t s , 5. t h e d i s t a n c e from m a n u f a c t u r i n g p l a n t s t o p u b l i c u t i l i t y sewers e x t e n d i n g outward from th e n e a r e s t pub1 ic f a c i 1 i t y , 6. th e t y p e o f m u n i c i p a l te rt ia ry , e t c .) , fa c ilitie s (prim ary, secondary, E f f l u e n t s t a n d a r d s and p e r m i t s wh ich a p p l y t o m a n u f a c t u r i n g d i s c h a r g e s sent d i r e c t l y i n t o p u b l i c w a t e r s m ig h t a l s o b r i n g about measures by m a n u f a c t u r e r s t o lo w e r o v e r a l l w a t e r u t i l i z a t i o n c o s t s . The l i t e r a t u r e r e vi ew e d f o r t h i s s t u d y , however, i n d i c a t e s t h a t sewer s e r v i c e c ha r ge s (and e f f l u e n t c h a r g e s , o r t a x e s ) ca use t h e g r e a t e r amount o f w a t e r c o n s e r v a t i o n and c o s t - r e d u c i n g measures t o be t a k e n . Charges upon e f f l u e n t s p r o v i d e an i n c e n t i v e t o low er th e volume o f d i s c h a r g e s and th e amount o f w a s t e l o a d s in clu ded in t h e d i s c h a r g e s . 358 7. the c a p a c ity o f m unicipal f a c i l i t i e s which i t is bein g u t i l i z e d , 8. t h e l e v e l o f sewer s e r v i c e c ha r ge s p a i d by m a n u f a c t u r ­ ing customers o f m u n i c i p a l f a c i l i t i e s , * 9. t h e t y p e o f sewer s e r v i c e c ha rge s p a id by m a n u f a c t u r i n g customers o f m u n i c i p a l f a c i l i t i e s ( t y p e o f f o r m u l a , e tc .), 10. t h e p r o v i s i o n by m u n i c i p a l i t i e s o f any l o c a t i o n in c e n ­ t i v e s t o m a n u f a c t u r i n g p l a n t s which i n v o l v e some means o f l o w e r i n g t h e c o s t s o f i n d u s t r i a l use o f p u b l i c w a t e r p o llu tio n control f a c i l i t i e s , 11. typ es o f p r e t r e a t m e n t f a c i l i t i e s r e q u i r e d o f manufac­ t u r i n g customers o f p u b l i c f a c i l i t i e s , and 12. th e r e l a t i v e s t r i c t n e s s o f d i r e c t r e g u l a t o r y c o n t r o l s which m a n u f a c t u r e r s would have to f a c e i f t h e y d i s ­ charged t h e i r w a s t e w a t e r s I n t o t h e c l o s e s t p u b l i c waters instead o f in t o the c lo s e s t p u b lic trea tm e n t fa c IIi ty . Conduct o f t h e m u l t i v a r i a t e a n a l y s i s re q u ir e c o l l e c t i o n o f primary d a t a . f a c tu r in g discharges a substate in to e i t h e r and e x t e n t t o i n d i c a t e d above would A s tra tifie d sampling o f a l l manu­ p u b l i c w a t e r s o r p u b l i c works w i t h i n r e g i o n would a ppe ar to be t h e b e s t s t a t i s t i c a l Cross-sectional d a t a would be g a t h e r e d of years, t i m e - s e r i e s a n a l y s e s cou ld be conducted t o d e t e r m i n e trends trends. then, in t h e use o f public f a c i l i t i e s The s t r a t i f i e d fo r given years. design. Over a p e r i o d and f a c t o r s u n d e r l y i n g those sampling f o r any g i v e n y e a r m ig h t s t r a t i f y the p o p u l a t i o n o f m a n u f a c t u r i n g d i s c h a r g e s a c c o r d i n g t o d i f f e r e n t c l a s s i f i c a t i o n s and s i z e s o f p l a n t s and th e lo catio n o f plan ts w ith Data c o l l e c t e d about t h i s indepe nden t v a r i a b l e should a l s o p e r t a i n t o t h e e x t e n t which c o s t - r e c o v e r y p r o v i s i o n s o f th e 1972 f e d e r a l a c t a r e b e in g e n f o r c e d and a r e r e f l e c t e d in t h e l e v e l o f sewer s e r v i c e ch a rg e s. 359 respect to municipal wastewater c o n tro l fa c ilitie s of d ifferen t types and c a p a c i t i e s . A no th e r p r o f i t a b l e lin e of s t a t is t ic a l r e s e a r c h would be to s tudy f a c t o r s a s s o c i a t e d w i t h t h e d i f f e r e n t amount o f use put M ichigan's tax exemption program by d i f f e r e n t c l a s s i f i c a t i o n s , and l o c a t i o n s o f m a n u f a c t u r i n g p l a n t s . S ta tis tic a l manufacturing p la n t s . sample o f The dependent v a r i a b l e would be some i n d i c a t i o n o f t h e amount o f use made o f t h e program by v a r i o u s s ta te or a substate region. then r e p r e s e n t f a c t o r s sizes, a n a l y s i s cou ld a g a i n be c a r r i e d o u t w i t h d a t a g a t h e r e d from a s t r a t i f i e d the e n t i r e to in dustries w ith in Independent v a r i a b l e s would such as: 1. th e p r e s en ce o f absence o f t a x and a c c o u n t i n g s t a f f s w i t h i n m a n u f a c t u r i n g f i r m s and p l a n t s which keep a b r e a s t o f programs such as t h e t a x exemption program and have th e c a p a b i l i t y o f c o m p l e t i n g a p p l i c a t i o n forms and f o l ­ lowing th ro ug h w i t h a p p l i c a t i o n s , 2. th e de gr ee which i n d i v i d u a l m a n u f a c t u r i n g p l a n t s and f i r m s p a r t i c i p a t e in i n d u s t r i a l a s s o c i a t i o n s which d i s s e m i n a t e i n f o r m a t i o n on programs such as t h e ta x exemption program, 3. t h e f r e q u e n c y which l o c a l p r o p e r t y t a x a s s e s s o r s v i s i t p l a n t f a c i l i t i e s t o r e g i s t e r and assess p o l l u t i o n con­ t r o l and o t h e r e q u ip m en t , and k. o t h e r v a r i a b l e s which c o u ld i n d i c a t e t h e de gr e e o f p r o f e s s i o n a l i s m in l o c a l p r o p e r t y t a x assessment p r a c ­ tices . Recommendation 5 Is o f f e r e d in th e l i g h t o f th e above d i scussion. Recommendation 5 . — Conduct m u l t i v a r i a t e s t a t i s t i c a l a n a l y ­ ses o f t h e typ es i n d i c a t e d above in o r d e r t o d e t e r m i n e t r e n d s in th e use by m a n u f a c t u r i n g p l a n t s o f m u n i c i p a l f a c i l i t i e s and o f M i c h i g a n ' s t a x ex emption program and about f a c t o r s a s s o c i a t e d w i t h t h o s e t r e n d s . Recommendation 6 is use o f m u n i c i p a l fa c ilitie s related t o t h e co nd uc t o f men tion ed s t u d i e s on t h e In Recommendation 5* Recommend a t i on 6 . — D u r in g t h e co nd uct o f s t u d i e s a bo u t t h e use o f m u n i c i p a l f a c i l i t i e s , c o l l e c t and a n a l y z e i n f o r m a t i o n a b o u t t h e d e g r e e t o w h ic h sewer s e r v i c e c h a r g e s upon manu­ f a c t u r i n g customers r e f l e c t e n f o r c e m e n t o f t h e c o s t - r e c o v e r y p r o v i s i o n s o f t h e F e d e r a l W a t e r P o l l u t i o n C o n t r o l A ct Amend­ ments o f 1 9 72 . The T i m i n g o f F u t u r e Research The s h o r t a g e o f p e rs on ne l and funds f o r c o n d u c t i n g requires t h a t advance t h o u g h t be g i v e n t o t h e t i m i n g o f S t u d i e s conducted inform ation useful studies c a lle d firs t Q uite c l e a r l y , on Recommendattons 3 t hr ou g h 6 . and r e v i s i o n o f t h e methods and framework o f th ereb y provided about s t r u c t u r i n g and c o m p l e t i n g c alled research. then, the f o r by Recommendations 1 and 2 should be com ple te d study should be r e l a t i v e l y tion future should be r e l a t i v e l y e a sy and shou ld p r o v i d e in subsequent s t u d i e s . b e f o r e embarking f u l l y expansion, research easy. the Furthermore, R ep etition , this present the u p -to -d a te informa­ i n c i d e n c e o f e f f e c t s c o u l d be used t h e case s t u d i e s and s t a t i s t i c a l f o r by Recommendations 3 th r o u g h 6 . in analyses APPENDICES APPENDIX A UNREPORTED MANUSCRIPTS 362 APPENDIX A UNREPORTED MANUSCRIPTS L i s t e d below a r e t i t l e s o f un repo rted manuscripts w r i t t e n the author during the course o f t h i s ing to t o p i c . study. T itle s by a r e grouped a c c o r d ­ Access t o t h e s e m a n u s c r i p t s can be o b t a i n e d by c o n ta c tin g the a utho r v ia M ic h i g a n S t a t e U n i v e r s i t y . i f p r e p a i d and i f p o st a ge t h e Dep art m ent o f Resource D evelo pment, Xerox copies w i l l be made upon r e q u e s t is p r o v i d e d f o r s h i p p i n g . P o l i c i e s and Programs 1. " D e t a i l e d As p e ct s o f Wa te r Q u a l i t y S t a n d a r d s and R e l a t e d R eg u la ­ tory P o licles 2. " C h r o n o l o g i c a l Summary o f S te ps L e a di n g t o t h e A d o p t i o n o f M i c h i g a n ' s Stream S t a n d a r d s . " 3. " U n r e s o lv e d k, " D e t a i l e d A spects o f S t u d i e d A s s i s t a n c e P r o g r a m s . " Is su es w i t h Wa ter Q u a l i t y S t a n d a r d s . " E x p l o r a t o r y Research 1. "P ra c tic a l and T h e o r e t i c a l Framework." 2. " D e t a i l e d A spe cts o f E x p l o r a t o r y Research Pr ocesses and R e s u l t s . " Background I n f o r m a t i o n About S t u d i e d Impact Groups and Subgroups 1, "Background I n f o r m a t i o n on M a n u f a c t u r i n g W as te wa te r T r e a t m e n t W o r k s . " 2. "Background I n f o r m a t i o n on M i c h i g a n ' s 363 I n d u s t r i e s and P u b l i c Economy." "Background In fo rm a tio n on W atershed "Toward t h e C l a s s i f i c a t i o n In d u s tria l o f W a t e r s h e d Regions." Treatm ent "In d ic ato rs o f In d u s t r ia l Stream S t a n d a r d s . " Reg io n s. " N ee d s and Costs Treatm ent "Estimates o f D i r e c t C o s ts R eq u ire d Meet R e g u l a t o r y C o n t r o l s . 11 Needs P r i o r to the Adoption o f by D i f f e r e n t In d u s t r ie s to APPENDIX B CHRONOLOGICAL LISTING OF PERTINENT FEDERAL AND MICHIGAN LAWS 365 APPENDIX B CHRONOLOGICAL LISTING OF PERTINENT FEDERAL AND MICHIGAN LAWS T h is a p pe nd ix l i s t s reviewed d u r i n g t h i s federal study. and M ich ig an These laws a r e not laws which have been lim ited t o j u s t those which p r e s c r i b e t h e r e g u l a t o r y p o l i c i e s and a s s i s t a n c e programs whose adv e rs e o r b e n e f i c i a l this lis t of effects laws a l s o r e f e r s have been s t u d i e d by t h i s w o r k . Rather, t o those which ( I ) in a r e mentioned un p u b li s h e d r e v i e w s th e a u t h o r has made o f f e d e r a l and M ich ig an w a t e r p o llu tio n control in Cha pte r X I I measures, and (2 ) a r e introduced when p o l i c i e s and programs a r e updated to account f o r changes which took p l a c e between e a r l y 1969 and late 1973. T h i s a p p e nd ix does no t c o n s t i t u t e a com plete pertain tion t o t h e p a s t and p r e s e n t c o n t r o l in th e s t a t e o f M i c h i g a n . Yet, and abatement o f w a t e r p o l l u ­ i t does c ov e r most o f t h e laws which e i t h e r have a l r e a d y had o r c o u ld p o t e n t i a l l y economic l i s t o f laws which have th e g r e a t e s t impact upon p o i n t sources o f w a t e r b o r n e w as te d i s c h a r g e s . 366 367 F e d e ral Laws P r e c u r s o r s o f th e Fede ra l Wate r P o l l u t i o n C o n t r o l Act R i v e r and Harbor Act o f 1899, Act o f March 3 , P u b l i c H e a l t h S e r v i c e A ct o f Oil P o llu tio n Act, Fed e ra l National 1912 , Act o f August 14, 1924, Act o f June 7 , Emergency R e l i e f Act o f In dustrial 1899, 1912. 1924. 1933, A c t o f May 12, Recovery A c t , Act o f June 16, 1933* 1933- The F i s h and W i l d l i f e C o o r d i n a t i o n A c t , Act o f March 10, The T r i a l Fe de ra l Water P o l l u t i o n C on tr ol 1934. Act Fede ra l Water P o l l u t i o n C o n t r o l A c t , P u b l i c Law 8 0 - 8 4 5 , Approved June 3 0 , 1948, 62 S t a t . 1155 extended by Act o f J u l y 17, 66 S t a t . 7 5 5 . 1952, The Permanent Fe de ra l Water P o l l u t i o n C o n t r o l Act and I t s Amendments Fed e ra l Water P o l l u t i o n C o n t r o l Act Amendments o f 1956, P u b l i c Law 8 4 - 6 6 0 , Approved J u l y 9 , 1956, 70 S t a t . 4 9 8 , 33 U . 5 . C . 4 6 6 , e t s e q . , p o p u l a r l y known as th e " F e d e r a l Water P o l l u t i o n C o n t r o l A c t . " Fed er al Water P o l l u t i o n C o n t r o l Act Amendments o f 1961, Law 8 7 - 8 8 , Approved J u l y 2 0 , 19 61, 75 S t a t . 2 0 4 , 33 U . S . C , 4 6 6 , Public e t seq. Water Q u a l i t y Act o f 1965, P u b l i c Law 8 9 - 2 3 4 , Approved October 2 , 1965, 79 S t a t . 9 0 3 , 33 U . S . C . 4 6 6 , e t seq. Clean Water R e s t o r a t i o n Act o f 1966, P u b l i c Law 8 9 - 7 5 3 , Approved November 3 , 1966, 80 S t a t , 1246, 33 U . S . C . 4 6 6 , e t seq. Water Q u a l i t y Improvement Act o f 1970, P u b l i c Law 9 1 - 2 2 4 , Approved A p r i l 3 , 1970, 84 S t a t . 9 1 , 33 U . S . C . A . 4 6 6 , e t seq. Fe de ra l Water P o l l u t i o n C o n t r o l Act Amendments o f 1972, Public Law 9 2 - 5 0 0 , Approved October 18, 1972, 86 S t a t . 8 1 6 , 33 U . S . C . A . 4 6 6 , e t seq. 368 Fe de ra l Programs P r o v i d i n g F i n a n c i a l A s s i s t a n c e f o r th e C o n s t r u c t i o n o f M u n i c i p a l Water P o l l u t i o n C o n t r o l F a c i l i t i e s (Besides t h e P . L . 8*1-660 Program) Housing Amendments o f 1955, P u b l i c Law 8 4 - 3 4 5 , *(0 U . S . C . A . *(59( T i t l e I I , s e c t i o n 201 t o 2 0 5 . ) 67 S t a t . 2 3 2 , P u b l i c Works A c c e l e r a t i o n A c t , P u b l i c Law 87 - 658 , 76 S t a t . ( S e c t i o n s 2 and 3 . ) P u b l i c Works and Economic Development Act o f 8 9 - 1 3 6 , 79 S t a t . 5 5 2 . (T itle I.) 79 S t a t . A p p a la c h i a n Regional Development Act o f 5( S e c t i o n s 212 and 2 1 4 . ) 79 S t a t . Housing and Urban Development Act o f 451 . ( T i t l e V I I , section 70 2.) 541. 1965, P u b l i c Law 1965, P u b l i c Law 8 9 - 4 , 1965, P u b l i c Law 8 9 - 1 1 7 , D em o n s tr a t io n C i t i e s and M e t r o p o l i t a n Development Act o f 1 9 66 , P u b l i c Law 89 - 754 , 80 S t a t . 1255(Section 4 0 4 .) Amendments o f 1965 to th e C o n s o l i d a t e d Farmers Home A dm in is ­ t r a t i o n A ct o f 1961, P u b l i c Law 8 9 - 2 4 0 , 79 S t a t . 9 3 1 . (Section 3 0 6 ( a ) . ] Fe de ra l P o l i c y A l l o w i n g A m o r t i z a t i o n Deduc tion s f o r C e r t a i n I n d u s t r i a l P o l l u t i o n C o n t r o l Works Tax Reform Act o f 19&9, P u b l i c Law 9 1 - 1 7 2 , 26 U . S . C . A . I 69 . (Section 7 0 4 .) 83 S t a t . 6 6 7 , M ic h ig a n Laws^ P r e c u r s o r s o f the W at er Resources Commission ( O r i g i n a l l y th e Stream C o n t r o l Commission) Act 3 5 0 , P u b l i c A ct s o f 1865—-An a c t to p r o t e c t f i s h and to p r e s e r v e t h e f i s h e r i e s by p r e v e n t i n g t h e u n l a w f u l dumping i n t o th e waters of c e r t a in m a te r ia ls . Most o f t h e s e a c t s which e x i s t e d in e a r l y 1969 a r e pr o v id e d in S t a t e o f M i c h i g a n , Water Resources Commission and Department o f P u b l i c H e a l t h , " R e p o r t on Wat er P o l l u t i o n C o n t r o l in the M ic hi ga n P o r ­ t i o n o f t h e Lake S u p e r i o r Basin and I t s T r i b u t a r i e s , " May 1, 1969, pp. 1 - 5 . (Mimeographed.) 369 A ct 9 8 , P u b l i c A ct s o f 1913— An a c t p r o v i d i n g f o r t h e s up e r ­ v i s i o n and c o n t r o l by t h e d i r e c t o r o f t h e d e pa r tm en t o f p u b l i c h e a l t h o v e r sewerage syst em s, and p r o v i d i n g p e n a l i t i e s f o r v i o l a t o r s . A c t 17, P u b l i c A ct s o f 1 9 2 1 - -An a c t to p r o v i d e f o r t h e p r o t e c ­ t i o n and c o n s e r v a t i o n o f t h e n a t u r a l re so ur ce s o f t h e s t a t e and to c r e a t e a de pa rt m en t o f c o n s e r v a t i o n . E n a b l in g Act o f t h e Water Resources Commission ( O r i g i n a l l y t h e Stream C o n t r o l Commission) and Subsequent Amendments Act 2 4 5 , P u b l i c A c t s . o f 1929— An a c t to c r e a t e a stream c o n t r o l commission to have c o n t r o l o v e r t h e p o l l u t i o n o f any w a t e r s o f the s t a t e and t h e g r e a t l a k e s , w i t h power t o make r u l e s and r e g u l a t i o n s go v e r ni n g t h e same, and t o p r e s c r i b e t h e powers and d u t i e s o f such commission; to p r o h i b i t th e p o l l u t i o n o f any w a t e r s o f t h e s t a t e and the g r e a t l a k e s ; and t o p r o v i d e p e n a l t i e s f o r t h e v i o l a t i o n o f the act. Amendments t o A c t 2 4 5 , P u b l i c Acts o f 1929, which a r e p e r t i n e n t to t h i s s t u d y , i n c l u d e : Act 117, P u b l i c Acts o f 1949; Act 165, P u b l i c A ct s o f 1963; Act 4 0 5 , P u b l i c A ct s o f 1965; Act 167, P u b l i c Acts o f 1968; Act 2 0 9 , P u b l i c A ct s o f 1968; Act 2 0 0 , P u b l i c A ct s o f 1970, and Act 2 9 3 , P u b l i c A ct s o f 1972. Ac ts A u t h o r i z i n g S t a t e Grants f o r Water P o l l u t i o n C o n t r o l F a c i l i t i e s and J o i n t H u n i c i p a t - I n d u s t r i a l Waste T r e a t m e n t C o n t r a c t s Act 2 2 2 , P u b l i c A ct s o f 1949— An a c t t o a u t h o r i z e p u b l i c c o r p o r a t i o n s t o a c c e p t g r a n t s and o t h e r a i d from t h e U .S . Government and from i n d u s t r i e s f o r th e c o n s t r u c t i o n o f p o l l u t i o n abatement f a c i l i ­ t i e s and t o a u t h o r i z e p u b l i c c o r p o r a t i o n s to e n t e r i n t o c o n t r a c t s w i t h i n d u s t r i e s f o r th e use o f d i s p o s a l f a c i l i t i e s . A ct 3 2 9 , P u b l i c Acts o f 1966— An a c t t o p r o v i d e s t a t e g r a n t s f o r sewage t r e a t m e n t f a c i l i t i e s and to p r o v i d e f o r a d m i n i s t r a t i o n o f th e g r a n t s by th e Water Resources Commission. Act 7 5 , P u b l i c A ct s o f 1968— An a c t t o a l l o w s t a t e g r a n t s f o r m u n i c i p a l sewage t r e a t m e n t works on a ma tch ing b a s i s w i t h t h e f e d e r a l g r a n t and t o r e q u i r e t h a t l o c a l a g e n c ie s s h a l l no t r e c e i v e a s t a t e g r a n t u n t i l a comprehensive p o l l u t i o n c o n t r o l p l a n is approved by t h e Water Resources Commission. Act 76 , P u b l i c Acts o f 1 968 — An a c t to a u t h o r i z e th e issuance o f g e n e r a l o b l i g a t i o n bonds o f t h e s t a t e o f M ic h ig a n f o r t h e making o f g r a n t s t o m u n i c i p a l i t i e s o f t h e s t a t e t o be used in t h e c o n s t r u c t i o n 370 and r e c o n s t r u c t i o n o f sewage t r e a t m e n t f a c i l i t i e s ; and to p r o v i d e f o r th e submission o f t h e q u e s t i o n o f s a id bonds t o t h e e l e c t o r s o f Mich ig a n . A ct A u t h o r i z i n g t h e Exemption o f I n d u s t r i a l Wate r P o l l u t i o n C o n t r o l F a c i l i t i e s From C e r t a i n Taxes tion o f taxes. A c t 2 2 2 , P u b l i c Acts o f 1 9 6 6 - -An a c t to p r o v i d e f o r t h e exemp­ i n d u s t r i a l w a t e r p o l l u t i o n c o n t r o l f a c i l i t i e s from c e r t a i n A ct s A u t h o r i z i n g t h e C o n s t r u c t i o n o f Regional W a t e r P o l l u t i o n C o n t r o l F a c i l i t i e s a n d / o r t h e Reg iona l F i n a n c i n g o f Such T r e a t m e n t F a c i l i t i e s Act poration o f a c q u i r i n g by the d i s p o s a l 2 7 8 , P u b l i c Acts o f 1 9 09 — An a c t to p r o v i d e f o r t h e i n c o r ­ v i l l a g e s and f o r changing t h e i r b o u n d a r i e s ; to p r o v i d e f o r p u r c h a s e , land wi t h o u t i t s c o r p o r a t e l i m i t s n e c e s s a r y f o r o f sewage and g a r b a g e . Act 3 1 2 , P u b l i c A ct s o f 1 929 — An a c t t o p r o v i d e f o r the i n c o r ­ p o r a t i o n by any two o r more c i t i e s , v i l l a g e s or t o w n s h i p s , o r any com bin ati on o r p a r t s o f t h e same f o r s u p p l y i n g sewage d i s p o s a l . Act 9*>, P u b l i c A ct s o f 1 9 3 3 — An a c t t o a u t h o r i z e p u b l i c c o r ­ p o r a t i o n s t o p u r c h a s e , a c q u i r e , c o n s t r u c t , imp ro v e , e n l a r g e , ex te n d or r e p a i r p u b l i c improvements w i t h i n o r w i t h o u t t h e i r c o r p o r a t e l i m i t s , and t o own, o p e r a t e and m a i n t a i n t h e same . . . . A ct 3 ^ 2 , P u b l i c Acts o f 1939— An a c t to a u t h o r i z e c o u n t i e s t o e s t a b l i s h and p r o v i d e c o n n e c t i n g w a t e r , sewer a n d / o r sewage d i s p o s a l improvements and s e r v i c e s w i t h i n o r between c i t i e s , v i l l a g e s and town­ s hip improvement d i s t r i c t s I n c l u d i n g d i s p o s a l f a c i l i t i e s and s e r v i c e s and to p r o v i d e methods f o r o b t a i n i n g money f o r t h e a f o r e s a i d purp ose s. Act 2 3 5 , P u b l i c A ct s o f 19^*7— An a c t to r e g u l a t e t h e o w n e r s h i p , e x t e n s i o n , improvement and o p e r a t i o n o f p u b l i c w a t e r and sewage d i s ­ posal systems l y i n g w i t h i n two or more p u b l i c c o r p o r a t i o n s ; and t o p r o v id e f o r t h e payment and s e c u r i t y o f revenue bonds issued f o r t h e c o n s t r u c t i o n , a c q u i s i t i o n , e x t e n s i o n and improvement o f such systems. Act 135, P u b l i c A ct s o f 1957— An a c t to a u t h o r i z e t h e e s t a b 1 ishment o f a depa rt m ent and board o f p u b l i c works in c o u n t i e s ; t o a u t h o r i z e t h e iss uance and payment o f bonds; and t o p r e s c r i b e a p r o ­ cedure f o r s p e c i a l assessment and co nd emnation. Ac t 8 2 , P u b l i c A ct s o f 1 9 5 5 - ~An a c t t o p r o v i d e f o r t h e acq uire me nt by a c i t y o f the w a t e r su pp ly system a n d / o r sewage d i s p o s a l 371 system o f a m e t r o p o l i t a n d i s t r i c t and t o p e r m i t such a c i t y t o own, m a i n t a i n , o p e r a t e , improve, e n l a r g e and exten d such systems e i t h e r w ith in or without it s li m i t s . Ac t 7 6 , P u b l i c Acts o f 1965~~An a c t to a u t h o r i z e c o u n t i e s , to w n s h ip s , v i l l a g e s , c i t i e s and any o t h e r governmental u n i t t o con­ s t r u c t w a s t e d i s p o s a l systems by agreements o r c o n t r a c t s w i t h govern mental u n i t s or a g e n c ie s o f a n o t h e r s t a t e . * APPENDIX C INTERVIEWS CONDUCTED DURING EXPLORATORY RESEARCH 372 APPENDIX C INTERVIEWS CONDUCTED DURING EXPLORATORY RESEARCH T h i s app end ix l i s t s exploratory research.' d u ri n g i n t e r v i e w s which were conducted d u r i n g Host o f th e s e l a t e June and l a t e November o f progressed beyond the s e in itia l i n t e r v i e w s were held sometime 1968. A fte r this months, numerous o t h e r study had interview s were h e ld p r i m a r i l y w i t h personnel on th e s t a f f s o f t h e M ic h i g a n Water Resources Commission, S t a t e Tax Commission, and O f f i c e o f Economic Expansion. to These l a t e r in terv ie w s , however, a r e no t r e f e r r e d in t h i s a p p e n d ix . The p o s i t i o n s h e ld by I n t e r v i e w e e s and t h e t i t l e s o f e n t i t i e s t hey worked f o r , as r e p o r t e d in t h i s a p p e n d i x , a r e those which e x i s t e d a t th e t im e o f i n t e r v i e w s . 37** Personnel Working f o r S t a t e o f M ic h ig a n Agencies 1. Mr. W i l l i a m F. B r a d f o r d , A s s i s t a n t C h i e f , W at er Development S e r v i c e s D i v i s i o n , M ic h ig a n Wat er Resources Commission, June 2 8 , 1968 . 2. Mr. John P. Kavanaugh and Mr. C l i f f K l i e r , I n d u s t r i a l Development A g e n t s , and Mr. Leonard D. B ro n d e r , C h i e f Ec onomi st, O f f i c e o f Economic Ex pa ns io n, M ic hi ga n Department o f Commerce, J u l y 2 , 1968. 3. Mr. Thomas W a sb ott en, Regional E n g i n e e r , E n g i n e e r i n g S e c t i o n , M ic h ig a n Department o f P u b l i c H e a l t h , J u l y 2 , 1968. 4. Mr. W i l l i a m C o l b u r n , R e c r e a t i o n Resource P l a n n i n g D i v i s i o n , M ic h ig a n Department o f N a t u r a l Resources, J u l y 2 , 1968. 5. Mr. Gary G u e n t h e r, Comprehensive S t u d i e s S e c t i o n , Wat er Q u a l i t y C o n t r o l D i v i s i o n , M ic h ig a n W a t e r Resources Commission, J u l y 8 , 1968 . 6. Mr. Leonard D. B r o n d e r , C h i e f Ec onomist, O f f i c e o f Economic Expa nsio n, M ic h ig a n Department o f Commerce, J u l y 2 4 , 1968. 7. Mr. Robert W. P a r k e r , D i s t r i c t Commission, J u l y 2 4 , 1968. 8. E n g i n e e r , M ic h ig a n Water Resources Mr. W i l l i a m Boyd, I n d u s t r i a l Development A g e n t , O f f i c e o f Economic Ex pa ns io n, M ic h ig a n Department o f Commerce, J u l y 2 4 , 1968 . 9. Mr. W i l l i a m G. T u r n e y , A s s i s t a n t C h i e f , Water Q u a l i t y C o n t r o l D i v i s i o n , M ich ig an Water Resources Commission, August 8 , 1968. 10. Mr. John Bohunsky, Regional E n g i n e e r , Wat er Q u a l i t y C o n tr o l s i o n , M ich ig an Water Resources Commission, August 8 , 1968. D iv i­ 11. Mr. Donald P i e r c e , A s s i s t a n t C h i e f , E n g i n e e r i n g S e c t i o n , M ic hi ga n Department o f P u b l i c H e a l t h , August 9 , 1968. 12. Mr. F r a n c i s B. F r o s t , C h i e f , Water Q u a l i t y C o n t r o l D i v i s i o n , M ic h ig a n Water Resources Commission, August 10, 1968, and Janua ry 8 , 1970. 13. Mr. W i l l i a m D. M a rk s , C h i e f , Water Development S e r v i c e s D i v i s i o n , M ic h ig a n Water Resources Commission, August 16, 1968, and Janua ry 8 , 1970, t h e l a t t e r i n t e r v i e w a l s o w i t h Mr. W i l l i a m F. Bradford, A ssistant C h ie f. 14. Mr. C hes ter H a r v e y , D i s t r i c t Commission, August 19, 1968. E n g i n e e r , M ic h ig a n Water Resources 1 375 R e p r e s e n t a t i v e s o f I n d u s t r i a l A s s o c i a t i o n s and I n d u s t r i a l L o c a t i o n S p e c i a l i s t s Working f o r R a i l r o a d s and P u b l i c U t i l i t i e s 1. Mr. W i l l i a m Pa lm er, M ic h ig a n P e tr ol e um A s s o c i a t i o n , November 12, 1970. 2. M r. George M. Van Peursen and Eldon W. S n e e r i n g e r , Michi gan Manu­ f a c t u r e r s A s s o c i a t i o n , November 12, 1968. 3. Mr. John R i d e o u t , Manager, i n d u s t r i a l Development D epa rtm ent , P e n n - C e n t r a l System, November 13, 1968. 4. Mr. (name l o s t ) , A s s i s t a n t Manager, Real E s t a t e and I n d u s t r i a l Development, Grand Tr un k Western R a i l r o a d , November 14, 1968. 5. Mr. George B. C a t l i n , D i r e c t o r o f Area Development, The D e t r o i t Edison Company, November 14, 1968. 6. Mr. F. E. Johnson, P l a n t Manager, M ich ig an M i l k Producers P l a n t a t O v i d , M i c h i g a n , r e p r e s e n t i n g t h e M ich ig an M i l k Producers A s s o c i a t i o n , November 18, 1968. 7. Mr. Andre L. Caron , Regional E n g i n e e r , N a t i o n a l Council o f the Paper I n d u s t r y f o r A i r and Stream Improvement, November 2 0 , 1968. 8. Mr. Perc A. Reeve, E x e c u t i v e S e c r e t a r y , Farmers and M a n u f a c t u r e r s Beet Sugar A s s o c i a t i o n , t o g e t h e r w i t h p l a n t managers o f t h r e e o f t h e f i v e b e e t sugar r e f i n e r i e s in M i c h i g a n , November 2 2 , 1968. 9. Mr. W i l l i a m N. M c C l e l l a n d , D i r e c t o r o f Area Development, Con­ sumers Power Company, November 19, 1968. O p e r a t o r s o f M u n i c ip a l Waste Tre a tm e nt P l a n t s , C i t y E ng in e e r s and County D r a i n Commissioners 1. Mr. Edward E. Johnson, S u p e r i n t e n d e n t , Was tewa ter T r e a tm e nt P l a n t , B a t t l e C re e k , M i c h i g a n , November 8 , 1968. 2. Dr. A l b e r t Shannon, C h i e f , Water and Sewerage T r e a t m e n t , D e p a r t ­ ment o f Water S u p pl y , D e t r o i t , M i c h i g a n , November 13, 1968. 3. Mr. Donald B u r t o n , Commissioner, Monroe County D r a i n Commission, November 15, 1968. 4. Mr. Robert W. Misekow, S u p e r i n t e n d e n t , Wastewater T r e a t m e nt P l a n t , F l i n t , M i c h i g a n , November 18, 1968. 5. M r. Donald Swets, C i t y E n g i n e e r , C i t y o f Kalamazoo, November 2 0 , 1968 . Miss D o r i s V o s h e l , A s s i s t a n t S u p e r i n t e n d e n t , Was tewa ter T r e a t ­ ment P l a n t , Grand R ap ids , M i c h i g a n , November 2 1 , 1968. M r. W i l l i a m S t on ebr oo k, S u p e r i n t e n d e n t , Was tewa ter Tr e a t m e n t P l a n t , Wyoming, M i c h i g a n , November 2 1 , 1968. APPENDIX D FORM LETTERS SENT TO INTERVIEWEES 377 APPENDIX D FORM LETTERS SENT TO INTERVIEWEES Appendix C l i s t s so ut h er n M ic h i g a n w i t h lo catio n in te r v ie w s held In s e v e r a l representatives o f s p e c i a l i s t s w o r k in g f o r in d u s tria l P rio r to these f i e l d each person t o be o f the requested interview ed. in terview , in terview s, fie ld in terview s s t a t e d th e purpose o f in terv ie w s . t h e form l e t t e r s which s e t h e ld d u r i n g November, 378 treatment in advance th e g e n e r a l t y p e s o f q u e s t i o n s w h ic h were d i s c u s s e d d u r i n g a p pe nd ix p r e s e n t s c o p i e s o f wastewater and form l e t t e r s were se nt to These t e t t e r s and t h e y asked in a sso ciations, r a i l r o a d s and p u b l i c u t i l i t i e s , persons f a m i l i a r w i t h t h e o p e r a t i o n o f m u n i c i p a l plan ts. communities 1968. This the s t a g e f o r 379 MICHIGAN STATE U N IV E R SIT Y DEPARTMENT OP RESOURCE DEVELOPMENT EAST LANSING * MICHIGAN * 46824 NATURAL KliSOURCES BUILDING O cto b er 31, 19&8 President o f In d u s tria l A ssociation C i t y , M ic h i g a n Dear M r. : T h i s Department i s c o n d u c t in g a s t u d y f o r t h e M ic h i g a n W a t e r Resources Com­ m is s io n t o d e t e r m i n e some impacts o f r e c e n t l y e n a c te d and proposed w a t e r p o l l u t i o n c o n t r o l p o l i c i e s on M i c h i g a n ' s economy. Mr. R o b e r t V e r t r e e s , a Gra du a te A s s i s t a n t w i t h o u r D e p a rt m e n t , would l i k e t o d i s c u s s t h e s e impacts w i t h you o r your r e p r e s e n t a t i v e . Mr. V e r t r e e s has g i v e n r e s e a r c h emphasis in r e c e n t months t o t h e p o t e n t i a l changes t h a t i n t e r s t a t e and i n t r a s t a t e w a t e r q u a l i t y c r i t e r i a m ig h t b r i n g t o t h e m a n u f a c t u r i n g , m i n i n g , and e l e c t r i c a l power i n d u s t r i e s . His work has in v o l v e d an a n a l y s i s o f Water Resources Commission f i l e s , a st udy o f l o c a t i o n p a t t e r n s o f t h e S t a t e ' s m a jo r w a t e r u s in g i n d u s t r i e s , and a r e v i e w o f p u b l i c h e a r i n g s on w a t e r q u a l i t y c r i t e r i a and p l a n s f o r t h e i r implemen­ ta tio n . Mr. Vertrees is in terested In d i s c u s s i n g s u b j e c t s such as t h e f o l l o w i n g : 1. Does your a s s o c i a t i o n keep in c o n t a c t w i t h i t s membership f i r m s about problems a s s o c i a t e d w i t h w a t e r s u p p l y , u s e , and p o l l u t i o n c o n t r o l ? 2. Have any r e c e n t l y p u b l i s h e d r e p o r t s e x p l o r e d t h e c o s t s o r w a s t e t r e a t m e n t and o t h e r e f f e c t s o f p o l l u t i o n c o n t r o l p o l i c i e s on f i r m s in M ic h ig a n who a r e members o f your a s s o c i a t i o n ? 3. What w i l l be t h e p r o b a b l e e f f e c t s o f t h e w a t e r q u a l i t y s t a n d a r d s and o t h e r p o l i c i e s such as t a x ex em pti ons f o r t h e c o n s t r u c t i o n o f wa s te t r e a t m e n t f a c i l i t i e s upon t h e membership f i r m s o f your a s s o c i a t i o n ? k. W ill firm s o f c e r t a in types, s iz e s , or w ith o th e r s p e c if ic charac­ t e r i s t i c s be a f f e c t e d d i f f e r e n t l y by t h e q u a l i t y s ta n d a r d s and o t h e r p o llu tio n control p o lic ie s ? Mr. V e r t r e e s w i l l t e l e p h o n e you w i t h i n t h e n e x t few days t o a r r a n g e a t im e f o r an i n t e r v i e w sometime in November. We a p p r e c i a t e your i n t e r e s t and t i m e , and he Is l o o k i n g f o r w a r d t o m e et in g w i t h you. S in c e re ly yours, R a l e i g h B a r i owe P r o f e s s o r and Chairman 380 MICHIGAN STATE U N IV E R S I T Y DEPARTMENT OF RESOURCE DEVELOPMENT EAST LANSING • MICHIGAN • 48824 NATURAL RESOURCES BUILDING O cto b er 31* 1968 I n d u s t r i a l Development R e p r e s e n t a t i v e Power, N a t u r a l Gas, o r R a i l r o a d Company C i t y , M ic hi ga n Dear Mr. : T h is Department Is c o n d u c t in g a st ud y f o r t h e M ic h ig a n Wat er Resources Com­ m is s io n t o d e t e r m i n e some impacts o f r e c e n t l y e n a c t e d and proposed w a t e r p o l l u t i o n c o n t r o l p o l i c i e s on M i c h i g a n ' s economy. Mr. Robert V e r t r e e s , a Gra dua te A s s i s t a n t w i t h o u r D e p a rt m e n t , would t i k e to d i s c u s s the s e Impacts w i t h you o r your r e p r e s e n t a t i v e . Mr. V e r t r e e s has g i v e n r e s e a r c h emphasis in r e c e n t months t o t h e p o t e n t i a l changes t h a t i n t e r s t a t e and i n t r a s t a t e w a t e r q u a l i t y c r i t e r i a m ig h t b r i n g to t h e m a n u f a c t u r i n g , m i n i n g , and e l e c t r i c a l power i n d u s t r i e s . H is work has in v o l v e d an a n a l y s i s o f Wate r Resources Commission f i l e s , a s t u d y o f l o c a t i o n p a t t e r n s o f t h e S t a t e ' s m a jo r w a t e r using i n d u s t r i e s , and a r e v i e w o f p u b l i c h e a r i n g s on w a t e r q u a l i t y c r i t e r i a and p l a n s f o r t h e i r implement tatio n . Mr. V e r t r e e s is interested in d i s c u s s i n g s u b j e c t s such as t h e f o l l o w i n g : 1. Types o f q u e s t i o n s about w a t e r s u p p l i e s , w a t e r u s e , p o l l u t i o n c o n t r o l r e g u l a t i o n s , and o t h e r w a t e r - o r i e n t e d m a t t e r s asked by f i r m s t h a t come t o you f o r l o c a t i o n a s s i s t a n c e . 2. E x t e n t to wh ich d i f f e r e n c e s between I n d i v i d u a l s t a t e s in i n t e r s t a t e o r i n t r a s t a t e w a t e r q u a l i t y c r i t e r i a have been mentioned by f i r m s as a f a c ­ tor in flu e n c in g t h e i r lo c a tio n d e c is io n s . 3. O t h er w a t e r p o l l u t i o n c o n t r o l p o l i c i e s t h a t a f f e c t t h e l o c a t i o n d e c i ­ sions o f f i r m s . (Tax exemptions f o r t h e c o n s t r u c t i o n o f w a s te t r e a t m e n t i n s t a l l a t i o n s and r e q u i r e m e n t s f o r t h e t r a i n i n g o f t r e a t m e n t p l a n t o p e r a t o r s a r e examples o f such p o l i c i e s . ) k. E f f e c t s o f t h e new impetus in w a t e r p o l l u t i o n c o n t r o l on r e g i o n a l l o c a t i o n p a t t e r n s in M i c h i g a n . 5. Trends f o r i n d u s t r y t o s w i t c h from s e l f t r e a t m e n t o f was te s t o th e use o f m u n i c i p a l f a c i l i t i e s . Mr. V e r t r e e s w i l l t e l e p h o n e you w i t h i n t h e n e x t few days t o a r r a n g e a t im e f o r an i n t e r v i e w sometime in November, We a p p r e c i a t e your i n t e r e s t and t i m e , and he is lo o k i n g f o r w a r d t o m e et in g w i t h you. S in c e re ly yours, R a l e i g h Barlowe P r o f e s s o r and Chairman 381 MICHIGAN STATE UN IV E R SITY DEPARTMENT OP RESOURCE DEVELOPMENT EAST LANSING ■ MICHIGAN * 48824 NATURAL RESOURCES BUILDING October 31» 1968 Superintendent o f M unicipal Waste T r e a t m e n t P l a n t C i t y , Michi gan Dear Mr. ____________________ : T h is depa rt m ent is c o n d u c t in g a s t u d y f o r t h e M ic hi ga n Water Resources Com­ m is s io n t o d e t e r m i n e some Impacts o f r e c e n t l y e na ct ed and proposed w a t e r p o l l u t i o n c o n t r o l p o l i c i e s on M i c h i g a n ' s economy. Mr. Robert V e r t r e e s , a Graduate A s s i s t a n t w i t h o u r D e p a rt m e n t , would l i k e t o d i s c u s s th e s e impacts w i t h you o r your r e p r e s e n t a t i v e . Mr. V e r t r e e s has g i v e n r e s e a r c h emphasis in r e c e n t months to t h e p o t e n t i a l changes t h a t i n t e r s t a t e and I n t r a s t a t e w a t e r q u a l i t y c r i t e r i a might b r i n g t o t h e m a n u f a c t u r i n g , m i n i n g , and e l e c t r i c a l power i n d u s t r i e s . H is work has in v o l v e d an a n a l y s i s o f W a t e r Resources Commission f i l e s , a study o f l o c a t i o n p a t t e r n s o f t h e S t a t e ' s ma jor w a t e r using I n d u s t r i e s , and a r e v i e w o f p u b l i c h e a r i n g s on w a t e r q u a l i t y c r i t e r i a and p l a n s f o r t h e i r implemen­ ta tio n . Mr. V e r t r e e s Is Interested in d i s c u s s i n g s u b j e c t s such as th e f o l l o w i n g : 1. Types o f I n d u s t r i e s t h a t now u t i l i z e your c i t y ' s w a s te t r e a t m e n t plant. Have t h e r e been any changes in t h e number and t y p e o f i n d u s t r i e s which use your m u n i c i p a l f a c i l i t i e s ? What has caused th e s e changes? 2. P e r ce nt a ge o f d i f f e r e n t k in d s o f w a s t e w a t e r s t r e a t e d by your p l a n t t h a t have come from i n d u s t r i a l e f f l u e n t s . Have t h e r e been any changes in the s e pe rc ent age s? What has caused t h e s e changes? 3. Does your c i t y have an o r d i n a n c e t h a t p r e s c r i b e s t h e typ es o f in dus­ t r i e s t h a t a r e a l l o w e d t o d i s c h a r g e was tes I n t o t h e m u n i c i p a l sewage system, rates f o r municipal tr e a tm e n t, requirements f o r p r e tre a tm e n t, e t c . ? W i l l the w a t e r q u a l i t y s t a n d a r d s in e f f e c t o r proposed f o r your l o c a t i o n r e q u i r e any amendments t o be made in t h e o r d i n a n c e ? k. What p o s s i b l e e f f e c t s w i l l t h e passage o r t h e d e f e a t o f th e $335 m i l ­ l i o n Clean Water bond program have on your c i t y ' s a b i l i t y to c o n s t r u c t o r improve f a c i l i t i e s which can a s s i m i l a t e more i n d u s t r i a l was te s in t h e f u t u r e 7 Mr. V e r t r e e s w i l l t e l e p h o n e you w i t h i n t h e n e x t few days t o a r r a n g e a time f o r an i n t e r v i e w sometime In November a f t e r t h e e l e c t i o n . We a p p r e c i a t e your i n t e r e s t and t i m e , and he is l o o k i n g f o r w a r d t o me eting w i t h you. S in c e re ly yours, R a l e i g h BarIowe P r o f e s s o r and Chairman APPENDIX E DETAILS OF RESEARCH DESIGN AND METHODS USED TO STUDY BENEFICIAL AND ADVERSE EFFECTS 382 APPENDIX E DETAILS OF RESEARCH DESIGN AND METHODS USED TO STUDY BENEFICIAL AND ADVERSE EFFECTS IntroductIon T h i s ap pen di x g i v e s t h e d e t a i l s o f methods employed to a t t a i n the f i r s t t h r e e study o b j e c t i v e s . C h a p t e r VI summarizes th e d e t a i l s reported h e re in . T h i s appendix has been w r i t t e n other researchers to in vo lv e d (1 ) un der st and the s p e c i f i c s t e p - b y - s t e p procedu res in methods r e l a t e d methods o r steps in a manner which would a l l o w in f u t u r e t o each o b j e c t i v e , r e s e a r c h which (2) re p lic a te ce rta in i n c o r p o r a t e s up dat ed d a t a , and ( 3 ) augment o r r e v i s e c e r t a i n methods or s t e p s th e purposes o f f u t u r e in o r d e r t o s u i t research. The a u t h o r has chosen t o w r i t e t h i s a p p e n d ix a c c o r d i n g s t y l e which d i f f e r s c o m p l e t e l y from t h a t used e l s e w h e r e T h i s appendix is w r i t t e n in a s i n g l e - s p a c e d , o u t l i n e l i n e proceeds by s e q u e n t i a l l y d e s i g n a t i n g steps in vo lv e d tiv e s .' b rie fly to a in t h i s work. form. The o u t ­ the p a r t s and d e s c r i b i n g the in r e s e a r c h designed t o a t t a i n each o f t h e t h r e e o b j e c ­ Sources o f i n f o r m a t i o n c o n s u l t e d d u r i n g each s t e p a r e i d e n t i f i e d d u r i n g th e d e s c r i p t i o n o f each s t e p . par e nt he s es which im m e di a te ly f o l l o w s th e Id en tific a tio n A number in o f each ^The t h r e e o b j e c t i v e s a r e i d e n t i f i e d by Roman n u m e r a ls , p a r t s by c a p i t a l l e t t e r s , and ste ps by numbers. 383 38/* source c o r r es po nd s t o a s p e c i f i c betized lis t at s our ce which t h e end o f t h e a p p e n d i x . is c i t e d in t h e a l p h a ­ Sometimes, a s i n g l e p a r e n t h e s e s c o n t a i n s two or more numbers which r e f e r set of t o two o r more sources. D e s c r i p t i o n o f Methods I. O b j e c t i v e 1 . - - T o e s t i m a t e th e p o t e n t i a l d i r e c t impact on t h e employment s t r u c t u r e s o f ( 1 ) m a n u f a c t u r i n g i n d u s t r i e s , ( 2 ) watei— shed r e g i o n s , ( 3 ) m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s , and ( 4 ) t h e e n t i r e s t a t e t h a t m ig h t have o c c u r r e d in t h e l a t e 1960s i f t h e d i r e c t r e g u l a t o r y c o n t r o l s o f t h e M ic h i g a n W a te r Resources Commission had been s t r i c t l y and i m m e d i a t e l y e n f o r c e d . A. P a r t A . — I d e n t i f i c a t i o n , c l a s s i f i c a t i o n , and l o c a t i o n o f manu­ f a c t u r i n g p l a n t s d i r e c t l y c o n t r o l l e d in 1968 by t h e commission. 1. Step I . — I d e n t i f i c a t i o n o f each d i r e c t l y - c o n t r o l l e d plant. Source and General P r o c e d u r e s . - - T h e names o f a l l m anu fa c­ t u r i n g p l a n t s d i r e c t l y c o n t r o l l e d by t h e commission were o b t a i n e d from t h e c o m m is s i o n ' s "Waste Wa ter C o n t r o l S t a t u s ( I n d u s t r i a l and Commercial) as o f A p r i l I , 1968" ( 1 8 ) . 2. Step 2 . — C l a s s i f i c a t i o n o f each d i r e c t l y - c o n t r o l l e d p l a n t a c c o r d i n g to i t s two - o r t h r e e - d i g i t St and ar d I n d u s t r i a l C la s s ific a tio n (S IC ). Sources and General P r o c e d u r e s . — The m a j o r i t y o f p l a n t s l i s t e d on th e co m m is si on 's s t a t u s l i s t ( 1 8 ) were r e f e r r e d to in The D i r e c t o r y o f M ic h i g a n M a n u f a c t u r e r s ( 2 ) . This d i r e c t o r y g i v e s t h e t y p e s o f p r o d u c t s m a n u f a c t u r e d by each p lan t. By then c o n s u l t i n g t h e St and ar d i n d u s t r i a l C l a s s i ­ f i c a t i o n Ma nu a l, 1967 ( 2 5 ) i t was p o s s i b l e to d e t e r m i n e t h e two - o r t h r e e - d i g i t SIC f o r th os e p l a n t s whose p r o d u c t s were 1 is ted in The D i r e c t o r y o f M ic h i g a n M a n u f a c t u r e r s . For p l a n t s not l i s t e d in t h i s d i r e c t o r y , s e v e r a l o t h e r sources were r e f e r r e d t o in o r d e r to o b t a i n t h e i r SI C , These sources in c lu d e d ( l ) Dunn and B r a d s t r e e t M e t a l w o r k i n g D i r e c t o r y , 1965 ( 3 ) ; ( 2 ) Dunn and B r a d s t r e e t R e f e r e n c e Book, J u T y Y T 968 ( 4 ) ; (3 ) a t a b l e p r e p a r e d by M r. Ti m o th y H i l t z on S I C ' s and o t h e r i n f o r m a t i o n a b o u t i n d u s t r i a l p l a n t s con­ t r o l l e d by t h e commission ( 1 9 ) , and ( k ) f i l e f o l d e r s k e p t by t h e w o rk in g s t a f f o f t h e commission on each d i r e c t l y co n tro lle d plant (5 )* 385 3. Step 3 . " L o c a t i o n o f each d i r e c t l y - c o n t r o l l e d ing to c o u n t y and wa te rs h ed r e g i o n . p la n t accord­ Sources and General P r o c e d u r e s . — The c om m is si on 's s t a t u s l i s t f o r 1968 ( 1 8 ) gaye t h e town in which each d i r e c t l y c o n t r o l l e d p l a n t was l o c a t e d . A highway map f o r M ic h ig a n was used t o l o c a t e each p l a n t by c o u n ty and by t h e seven water she d r e g i o n s used in t h i s s t u d y . B. P a r t B. — D e t e r m i n a t i o n o f t h e a p p r o x i m a t e number o f employees wo rkin g f o r each d i r e c t l y - c o n t r o l l e d p l a n t and assignment o f each p l a n t t o an e m p l o y m e n t - s I z e c a t e g o r y . 1. Step 1 . — A p p r o x i m a t i o n o f t h e number o f employees working f o r each d i r e c t l y - c o n t r o l l e d p l a n t . Sources and General P r o c e d u r e s . - - T h e number o f employees w o rk in g f o r each p l a n t coul d be a pp r ox im a te d from one o f several sources. These sources in cl ud e d r e f e r e n c e s ( 3 ) » (1») and ( 5 ) l i s t e d under P a r t A, Step 2 o f O b j e c t i v e I , In a d d i t i o n , employment i n f o r m a t i o n was o b t a i n e d from a p o s t ­ card q u e s t i o n n a i r e sent o u t by t h e a u t h o r which asked f o r t h e number o f employees o f those p l a n t s whose employment f i g u r e s could not be o b t a i n e d from th e s e t h r e e r e f e r e n c e s ( 1 1 ). 2. Step 2 . — Assignment o f each d i r e c t l y - c o n t r o l l e d e m p lo y m e n t - s iz e c a t e g o r y . plant t o an Sources and General P r o c e d u r e s . — Based upon t h e employment f i g u r e s g a in e d from Step 1, each d i r e c t l y - c o n t r o l l e d p l a n t was a s sig ne d to one o f f o u r e m p lo y m e n t - s iz e c a t e g o r i e s . The range o f each c a t e g o r y was made t o conform t o ranges used by th e U . S . Bureau o f t h e Census in th e County Business Patterns ( 2 1 ). C. P a r t C . - - A p p r o x j m a t ion o f t h e adequacy o f w a s t e w a t e r t r e a t m e n t by each d i r e c t l y - c o n t r o l l e d p l a n t . I* Step 1. — D e t e r m i n a t i o n o f t h e adequacy o f waste t r e a t m e n t 1968 by each d i r e c t l y - c o n t r o l l e d p l a n t . in Sources and General P r o c e d u r e s . - - R e g i o n a 1 e n g i n e e r s o f the Water Resources Commission a n n u a l l y a s s i g n an a d e q u a c y - o f w a s t e - t r e a t m e n t r a t i n g to each e n t i t y l i s t e d on the c u r r e n t sta tu s l i s t o f c o n t r o lle d discharges ( 1 8 ) . T h is r a t i n g gen­ e r a l l y i n d i c a t e s how c l o s e a p a r t i c u l a r d i s c h a r g e r is to a b i d i n g by t h e e f f l u e n t r e s t r i c t i o n s a s s ig n e d by t h e commis­ sion, Each c o n t r o l l e d d i s c h a r g e r is r a t e d a c c o r d i n g t o the below a l p h a b e t i c a l d e s i g n a t i o n s : 386 Control adequate A: B: C o n t r o l p r o v i d e d — adequacy not f u l l y d e te r m i n e d C: No c o n t r o l — need no t e s t a b l i s h e d D: Control provided— p r o t e c t io n u n r e l i a b l e E: C o n t r o l in ade qu at e For each d i r e c t l y - c o n t r o l l e d m a n u f a c t u r i n g p l a n t in cl ud e d on t h e c om m iss io n's s t a t u s l i s t f o r 1968, t h e adequacy o f w a s t e t r e a t m e n t was re co rd ed from t h e l i s t . 0- P a r t D. - - S e c t o r a l , s t a t e w i d e , and s u b s t a t e r e g i o n a l summation o f i n f o r m a t i o n o b t a i n e d in P a r t s A, B and C on a l l m a n u f a c t u r i n g p l a n t s t h a t were d i r e c t l y c o n t r o l l e d by th e commission in 1968. 1. Step 1 . — S e c t o r a l and s t a t e w i d e summation o f inform atio n. General P r o c e d u r e s . — I n f o r m a t i o n p r e v i o u s l y o b t a i n e d on ( 1 ) t h e t o t a l number o f p l a n t s d i r e c t l y c o n t r o l l e d by t h e commission, ( 2 ) t h e number o f t h e s e p l a n t s in each employments i z e c a t e g o r y , ( 3 ) t h e employment o f th e s e p l a n t s , and (*t) th e a d e q u a c y - o f - w a s t e - t r e a t m e n t r a t i n g s o f th e s e p l a n t s was summed up on a s t a t e w i d e and s e c t o r a l b a s i s . The s e c t o r a l summation was done f o r each SIC o f m a n u f a c t u r i n g i n d u s t r y which had a t l e a s t one p l a n t under t h e d i r e c t c o n t r o l o f the commission in 1968. I n f o r m a t i o n on t h e s e c l a s s i f i c a t i o n s o f i n d u s t r i e s was f u r t h e r s u b d i v i d e d i n t o f o u r c a t e g o r i e s o f in d u stries. T h i s c a t e g o r i z a t i o n was g e n e r a l l y based upon an i n d u s t r y ' s s t a t u s as e i t h e r a d u r a b l e o r n o n d u r a b l e goods i n d u s t r y and t h e number o f p l a n t s in each i n d u s t r y t h a t was d i r e c t l y c o n t r o l l e d by t h e commission.^ 2. Step 2 . - - B rea kdo w n o f s e c t o r a l and s t a t e w i d e i n f o r m a t i o n i n t o t o t a l s f o r each w at er she d r e g i o n and f o r m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s . General P r o c e d u r e s . - - 5 inee each p l a n t had been l o c a t e d by c o u n ty and by w a te r s h e d r e g i o n in P a r t A, Step 3 o f O b je c ­ t i v e 1, i t was p o s s i b l e to a c q u i r e a f u r t h e r breakdown o f t h e i n f o r m a t i o n t h a t had been summed up in Step I o f t h i s part. T h i s breakdown was done f o r each o f t h e seven w a t e r ­ shed r e g i o n s used in t h e st ud y and f o r m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s . E. P a r t E . — Recording o f i n f o r m a t i o n ab ou t a l l m a n u f a c t u r i n g p l a n t s in M ic h ig a n from f e d e r a l and M ic h i g a n s ou rc e s. 1. Step I . — Record i n f o r m a t i o n from f e d e r a l sources abo ut t o t a l number o f m a n u f a c t u r i n g p l a n t s and number o f p l a n t s in each ^R e fe r t o Appendix F f o r a d d i t i o n a l cation o f In d u s trie s . I n f o r m a t i o n on t h e c l a s s i f i ­ 387 e m p lo y m e n t - s iz e c a t e g o r y . in P a r t D. C lassify i n f o r m a t i o n as was done Source and General P r o c e d u r e s . — From th e County Business P a t ­ t e r n s , 1967: M ich ig an ( 2 l ) , d a t a was recorded on a c o u n t y b y - c o u n t y b a s i s abou t th e t o t a l number o f m a n u f a c t u r i n g p l a n t s and t h e number o f p l a n t s in each o f t h e f o u r e m p lo y m e n t - s iz e categ ories. T h i s d a t a was added up a c c o r d i n g to t h e same s e c t o r a l , s t a t e w i d e and s u b s t a t e r e g i o n a l c l a s s i f i c a t i o n scheme di sc us s e d above in P a r t D. 2 . Step 2 . — Record i n f o r m a t i o n from M ic hi ga n sources on t o t a l number o f employees. C l a s s i f y i n f o r m a t i o n as was done in P a r t D. Source and General P r o c e d u r e s . - - V i s i t s were made to the D e t r o i t O f f i c e o f th e M ic h ig a n Employment S e c u r i t y Commission t o re co rd u n p u bl is he d d a t a on a c o u n t y - b y - c o u n t y b a s i s about t h e t o t a l number o f m a n u f a c t u r i n g employees in 1968. [Use was made o f r e f e r e n c e s (1 *0 and \ l U ) . ] T h i s d a t a was added up a c c o r d in g t o the same s e c t o r a l , s t a t e w i d e and s u b s t a t e r e g i o n a l c l a s s i f i c a t i o n scheme disc uss ed in P a r t D. F. P a r t F . - - E s t i m a t i o n o f the e x t e n t o f t h e d i r e c t r e g u l a t o r y con­ t r o l o f th e Wate r Resources Commission by comparing t h e number o f p l a n t s in each e m p lo y m e n t - s iz e c a t e g o r y t h a t were d i r e c t l y c o n t r o l l e d by th e commission w i t h the t o t a l number o f p l a n t s in each e m p lo y m e n t - s iz e c a t e g o r y . 1. Step 1 . — C a l c u l a t i o n o f p e r c e n t a g e f i g u r e s w h i c h , in e f f e c t , d i v i d e th e f i g u r e s on t o t a l number o f p l a n t s mentioned In Step I , P a r t E, O b j e c t i v e I by t h e c o r r e s p o n d e n t f i g u r e s on t h e number o f d i r e c t l y - c o n t r o l l e d p l a n t s mentioned in Steps 1 and 2 , P a r t D, O b j e c t i v e 1. General P r o c e d u r e s . — The e x t e n t o f th e d i r e c t r e g u l a t o r y con­ t r o l o f t h e commission o v e r m a n u f a c t u r i n g p l a n t s in d i f f e r e n t e m p lo y m e n t -s iz e c a t e g o r i e s was e s t i m a t e d thr ough t h e f o l l o w i n g p e r c e n t a g e co m par iso ns. C a l c u l a t i o n s were made o f th e p e r c e n t o f th e t o t a l number o f p l a n t s in each e m p lo y m e n t - s iz e c a t e g o r y t h a t were comprised by p l a n t s w i t h d i s c h a r g e s t h a t were d i r e c t l y c o n t r o l l e d by t h e commission. These p e r c e n t a g e s were a r r i v e d a t by d i v i d i n g f i g u r e s on th e t o t a l number o f p l a n t s o b t a i n e d from c a r r y i n g out Step 1, P a r t E, O b j e c t i v e I I n t o t h e f i g u r e s on t h e number o f p l a n t s w i t h d i r e c t l y - c o n t r o l l e d d i s c h a r g e s o b t a i n e d from c a r r y i n g o u t Steps 1 and 2 , P a r t D, O bjective I . P e r c e n t s o f d i r e c t l y - c o n t r o l l e d p l a n t s to t o t a l p l a n t s were c a l c u l a t e d f o r each i n d u s t r i a l c l a s s i f i c a t i o n (S (C ) and f o r each group o f i n d u s t r i a l c l a s s i f i c a t i o n s . This was done f o r I n d u s t r i a l c l a s s i f i c a t i o n s a t t h e s t a t e w i d e and s u b s t a t e r e g i o n a l l e v e l and f o r m e t r o p o l i t a n and nonmetro­ p o l i t a n groups o f c o u n t i e s . 388 G. P a r t G. — E s t i m a t i o n o f t h e e x t e n t o f t h e d i r e c t r e g u l a t o r y con­ t r o l o f t h e Wa ter Resources Commission by com paring t h e number o f employees in d i r e c t l y - c o n t r o l l e d p l a n t s w i t h d i f f e r e n t a d e q u a c y - o f - w a s t e t r e a t i n g r a t i n g s w i t h t h e t o t a l number o f employees in t h e t o t a l number o f p l a n t s . 1. St e p I . — Summation o f t o t a l number o f employees in d i r e c t l y c o n tro lle d p lan ts w ith d i f f e r e n t adequacy-of-waste treatm ent ratings. Gene ral P r o c e d u r e s . — Employment f i g u r e s f o r a l l d i r e c t l y c o n t r o l l e d p l a n t s w i t h t h e same a d e q u a c y - o f - w a s t e - t r e a t m e n t r a t i n g s were added t o g e t h e r in o r d e r t o a r r i v e a t a f i g u r e f o r t h e t o t a l employment in p l a n t s w i t h each r a t i n g . At th e s t a t e l e v e l , the s e t o t a l employment f i g u r e s we re o b t a i n e d f o r each i n d u s t r i a l c l a s s i f i c a t i o n and f o r each group o f in d u s ­ tr ia l c la s s ific a tio n s . A breakdown o f t h e s e s t a t e - l e v e l f i g u r e s was made t o a r r i v e a t t h e t o t a l employment w i t h i n d i f f e r e n t r a t i n g s and c l a s s i f i c a t i o n s o f i n d u s t r i e s a t t h e s u b s t a t e r e g i o n a l , m e t r o p o l i t a n , and n o n m e t r o p o l i t a n l e v e l s o f aggregation. 2. S t e p 2 . — C a l c u l a t i o n o f p e r c e n t a g e f i g u r e s w h ic h d i v i d e t h e t o t a l number o f employees in t h e t o t a l number o f p l a n t s by t h e number o f employees in d i r e c t l y - c o n t r o l l e d p l a n t s w i t h each d i f f e r e n t a d e q u a c y - o f - w a s t e - t r e a t m e n t r a t i n g . General P r o c e d u r e s . — The e x t e n t o f t h e d i r e c t r e g u l a t o r y c o n t r o l o f t h e commission o v e r employment in d i r e c t l y c o n t r o l l e d p l a n t s w i t h each d i f f e r e n t a d e q u a c y - o f - w a s t e t r e a t m e n t r a t i n g was e s t i m a t e d t hr ou g h t h e f o l l o w i n g p e r c e n t ­ age c o m p a r is o n s . C a l c u l a t i o n s we re made o f t h e p e r c e n t o f t o t a l number o f employees in th e t o t a l number o f p l a n t s t h a t we re comprised by t h e number o f employees in d i r e c t l y c o n t r o l l e d p l a n t s w i t h each d i f f e r e n t a d e q u a c y - o f - w a s t e treatm ent r a tin g . These p e r c e n t a g e s were a r r i v e d a t by d i v i d i n g f i g u r e s on t h e t o t a l employment in a l l p l a n t s o b t a i n e d from c a r r y i n g o u t Step 2 , P a r t E, O b j e c t i v e 1 by t h e f i g u r e s on employment in d i r e c t l y - c o n t r o l l e d p l a n t s w i t h t h e same r a t i n g o b t a i n e d from c a r r y i n g o u t Ste p I o f this p a rt. P e r c e n t s were c a l c u l a t e d f o r each I n d u s t r i a l c l a s s i f i c a t i o n and f o r each group o f i n d u s t r i a l c l a s s i f i ­ cations. T h i s was done f o r i n d u s t r i a l c l a s s i f i c a t i o n s a t t h e s t a t e w i d e and s u b s t a t e r e g i o n a l l e v e l and f o r m e t r o p o l i t a n and n o n m e t r o p o l i t a n groups o f c o u n t i e s . h- P a r t H. — A n a l y s i s o f p e r c e n t a g e com par ison s o b t a i n e d by P a r t s and G o f t h i s o b j e c t i v e . 1. F Ste p 1 . - - A n a i y s i s o f p e r c e n t a g e comparisons r e g a r d i n g number o f p l a n t s in d i f f e r e n t s i z e c a t e g o r i e s o b t a i n e d by P a r t F. 389 General P r o c e d u r e s . — Pe rc e nt a ge f i g u r e s o b t a i n e d by p r o ­ cedures summarized in P a r t F have been used in t h i s study t o g a i n a g e n e r a l a p p r e c i a t i o n o f t h e p e r c e n t o f a l l manu­ f a c t u r i n g p l a n t s in v a r i o u s S I C ' s , e m p lo y m e n t - s iz e c a t e g o r i e s , and d i f f e r e n t l o c a t i o n s thro ug ho u t th e s t a t e t h a t were d i r e c t l y c o n t r o l l e d by t h e commission in 1968. These p e r ­ c e n t s g i v e o n l y a vague idea o f t h e e x t e n t and d i r e c t i o n o f the com mission's d i r e c t c o n t r o l ov e r m a n u f a c t u r in g i n d u s t r i e s . Hence, t h e y g i v e o n l y a g e n e r a l n o t i o n o f t h e i n c i d e n c e o f adv ers e e f f e c t s t h a t m ig h t have been w i t n e s s e d in th e l a t e 1960s had th e d i r e c t c o n t r o l s o f t h e commission been s t r i c t l y and im m e d ia t e ly e n f o r c e d . But the se were not th e main p u r ­ poses in c a l c u l a t i n g p e r c e n t a g e s o f th e t o t a l number o f p l a n t s tn each e m p lo y m e n t - s iz e c a t e g o r y t h a t were d i r e c t l y c o n t r o l l e d by th e commission in 1968. R a t h e r , t h e main use o f th e s e p e r c e n t a g e f i g u r e s - - a s w i l l be e x p l a i n e d in P a r t A o f O b j e c t i v e 2 — was to a p p r o x im a t e the e x t e n t t o which d i f ­ f e r e n t c l a s s i f i c a t i o n s , s i z e s , and l o c a t i o n s o f m a n u f a c t u r i n g p l a n t s in Michi gan make use o f p u b l i c w a s te w a te r t r e a t m e n t f a c i 1 i t ie s .^ 2. Step 2 . — A n a l y s i s o f p e r c e n t a g e comparisons r e g a r d i n g employ­ ment in p l a n t s w i t h d i f f e r e n t a d e q u a c y - o f - w a s t e - t r e a t m e n t r a t i n g s o b t a i n e d from P a r t G. General P r o c e d u r e s . — An a n a l y s i s o f p e r c en ta g e comparisons r e s u l t a n t from P a r t G p r o v id e d the b a s i c means f o r e s t i ­ m ati ng th e p o t e n t i a l in c i d e n c e o f a d v e r s e e f f e c t s t h a t mig ht have r e s u l t e d from enforcement o f commission r e g u l a t i o n s in e f f e c t in th e l a t e 1960s. These p e r c e n t a g e f i g u r e s a llo w e d the " w o r s t - p o s s i b l e " employment impacts t o be c o n j e c t u r e d by p r o v i d i n g answers to the f o l l o w i n g h y p o t h e t i c a l q u e s t i o n s . H y p o t h e t i c a l q u e s t i o n on s e c t o r a l employment im p a c t s . — I f th e d i r e c t r e g u l a t o r y c o n t r o l s a d m i n i s t e r e d by t h e M i c h i ­ gan Water Resources Commission in 1968 were s t r i c t l y and im m e di a te ly e n f o r c e d a g a i n s t m a n u f a c t u r i n g d i s c h a r g e r s , what might be th e maximum p o t e n t i a l impact on employment in s p e c i f i c i n d u s t r i e s and groups o f s i m i l a r i n d u s t r i e s i f p l a n t s w i t h 1e s s - t h a n - a d e q u a t e w a s t e - t r e a t m e n t r a t i n g s were th e ones f o r c e d o u t o f business by c o s t s needed t o a t t a i n a dequate t r e a tm e n t ? H y p o t h e t i c a l q u e s t i o n on s t a t e w i d e and r e g i o n a l employ­ ment i m p a c t s . - - I f t h e d i r e c t r e g u l a t o r y c o n t r o l s a d m i n i s t e r e d by th e M ich ig an Water Resources Commission In 1968 were s t r i c t l y and im m e d ia te ly e n f o r c e d a g a i n s t m a n u f a c t u r in g The r e v i e w o f methods p r o v id e d by Ch apt er VI o n l y r e f e r s to the use o f s u b j e c t p e r c en ta g e f i g u r e s to a p p r o x im a t e the e x t e n t to which d i f f e r e n t types o f m a n u f a c t u r i n g p l a n t s u t i l i z e p u b l i c f a c i l i t i e s . t 390 p l a n t s , what mig ht be th e maximum p o t e n t i a l impact on employment In t h e e n t i r e s t a t e , in w a t e r sh ed r e g i o n s , and in m e t r o p o l i t a n and n o n m e t r o p o t i t a n groups o f c o u n t i e s i f p l a n t s w i t h 1e s s - t h a n - a d e q u a t e w a s t e - t r e a t m e n t r a t i n g s w e re t h e ones f o r c e d o u t o f business by c o s t s needed to a t t a i n a d e qu a te treatment? O b j e c t i v e 1 was a t t a i n e d by a n s w e r in g t h e s e two q u e s t i o n s . II. O b j e c t i v e 2 . — To i d e n t i f y which Standard I n d u s t r i a l C l a s s i f i c a t i o n s , e m p lo y m e n t - s iz e c a t e g o r i e s , and l o c a t i o n s o f m a n u f a c t u r i n g p l a n t s in M ic h i g a n have been most a b l e to r e c e i v e b e n e f i c i a l e f f e c t s from v a r i o u s s u b s id y programs which h e l p pay the c o s t s o f b u i l d i n g p u b l i c water p o llu tio n control f a c i l i t i e s . A. P a r t A . - - I d e n t i f i c a t i o n o f Standard I n d u s t r i a l C l a s s i f i c a t i o n s , e m p lo y m e n t - s iz e c a t e g o r i e s , and l o c a t i o n s o f m a n u f a c t u r i n g p l a n t s t h a t , on a p i a n t - b y - p l a n t b a s i s , make th e most f r e q u e n t use o f p u b l i c w a t e r p o l l u t i o n c o n t r o l f a c i l i t i e s . I. Step 1 . - - U t i 1 i z e complements o f p e r c e n t a g e f i g u r e s o b t a i n e d thr ough procedu res summarized in P a r t F, O b j e c t i v e 1, to e s t i m a t e the p e r c e n t o f m a n u f a c t u r i n g p l a n t s o f d i f f e r e n t c l a s s e s , s i z e s , and l o c a t i o n s t h a t a r e i n d i r e c t l y c o n t r o l l e d by th e commission, i . e . , t h a t use m u n i c i p a l w a s t e t r e a t m e n t works. General P r o c e d u r e s . — As mentioned in Step 1, P a r t H o f O b j e c t i v e I , two purposes a r e se rv e d by p e r c e n t a g e f i g u r e s which show t h e t o t a l number o f p l a n t s in each employments i z e c a t e g o r y t h a t were d i r e c t l y c o n t r o l l e d by t h e commission in 1968. To r e v i e w , one purpose th e s e p e r c e n t a g e s s e rv e is t o p r o v i d e a g e n e r a l n o t i o n o f th e c l a s s e s , s i z e s , and l o c a ­ t i o n s o f m a n u f a c t u r i n g p l a n t s t h a t sent a t l e a s t p a r t o f t h e i r w a s t e w a t e r s d i r e c t l y t o p u b l i c w a t e r s in 1968 and thus were d i r e c t l y c o n t r o l l e d by t h e commission. But th e main purpose the s e p e r c e n t a g e s s e r v e is t o a p p r o x i m a t e t h e e x t e n t t o which m a n u f a c t u r i n g p l a n t s o f d i f f e r e n t c l a s s e s , s i z e s ' ] and l o c a t i o n s u t i l i z e , on a p l a n t - b y - p l a n t b a s i s , p u b l i c water p o llu tio n control f a c i l i t i e s . To a c c o m p li s h t h i s l a t ­ t e r purp ose , complements o f p e r c e n t a g e f i g u r e s o b t a i n e d th r o u g h procedu res summarized in P a r t F, O b j e c t i v e 1, wer e used t o e s t i m a t e th e usage o f p u b l i c f a c i l i t i e s . This p r o ­ ce dure i n h e r e n t l y a b s t r a c t s from r e a l i t y by assuming t h a t p l a n t s which a r e no t d i r e c t l y c o n t r o l l e d by t h e commission must then be under t h e i n d i r e c t c o n t r o l s o f t h e commission. Of c o u r s e , in r e a l i t y t h i s dichotomous c l a s s i f i c a t i o n does not e x i s t . In r e a l i t y , a s i n g l e p l a n t may send some o f i t s e f f l u e n t d i s c h a r g e s t o p u b l i c w a t e r s (and thus be d i r e c t l y c o n t r o l l e d ) w h ile o th e r discharges a r e sent to p u b lic f a c i l i ­ t i e s (and thus be i n d i r e c t l y c o n t r o l l e d ) . But r e s e a r c h 391 r e v e a l e d t h a t t h e number o f p l a n t s In M ic h i g a n which send was te s t o b o th p u b l i c w a t e r s and p u b l i c f a c i l i t i e s , w h i l e not p r e c i s e l y known, is a r e l a t i v e l y small number o f p l a n t s . A no th e r l i m i t a t i o n t o t h e t w o - p a r t c l a s s i f i c a t i o n is t h a t some v e r y small m a n u f a c t u r i n g p l a n t s w i t h o r g a n i c type s o f d i s c h a r g e s may use s e p t i c t a n k s . These small p l a n t s would no t t hen be e i t h e r d i r e c t l y o r i n d i r e c t l y c o n t r o l l e d by t h e commission. N o t w i t h s t a n d i n g th e s e a b s t r a c t i o n s and t h e i r r e s u l t a n t l i m i t a t i o n s , use o f th e complements o f p e r c e n t a g e f i g u r e s o b t a i n e d in P a r t F , O b j e c t i v e 1, p r o v i d e d a c l o s e approximation o f thepercent o f m anufacturing p la n ts o f d i f ­ f e r e n t c l a s s e s , s i z e s , and l o c a t i o n s t h a t u t i l i z e d p u b l i c f a c 1 1 i t l e s In 1968. B. P a r t B. - - I d e n t i f i c a t i o n , c l a s s i f i c a t i o n , and l o c a t i o n o f p u b l i c w a s t e w a t e r t r e a t m e n t f a c i l i t i e s t h a t were in o p e r a t i o n in 1968. 1. S te p I . — I d e n t i f i c a t i o n o f each t r e a t m e n t f a c i l i t y . Source and General P r o c e d u r e s . — The names o f a l l m u n i c i p a l i ­ t i e s t h a t had a w a s t e w a t e r t r e a t m e n t f a c i l i t y in o p e r a t i o n in 1968 we re o b t a i n e d from MD i r e c t o r y o f Was tewa ter T r e a t m e n t Works In M ic h i g a n as o f F e b r u a r y , 1968" ( 1 3 ) . This d i r e c t o r y is p r e p a r e d a n n u a l l y by t h e D i v i s i o n o f E n g i n e e r i n g o f t h e M ic h ig a n Dep artme nt o f H e a l t h . 2. St e p 2 . — C l a s s i f i c a t i o n o f each t r e a t m e n t f a c i l i t y to s iz e o f p o p u la tio n served. according Source and General P r o c e d u r e s . — The d i r e c t o r y o f t r e a t m e n t works f o r 1968 ( 1 3 ) e s t i m a t e s the number o f persons served by each w as te t r e a t m e n t f a c i l i t y in t h e s t a t e . The e s t i m a t e d number o f persons served by each f a c i l i t y was r e c o r d e d . Each f a c i l i t y was then a s sig ned to one o f f i v e p o p u l a t l o n - s i z e categ ories. The range o f t h e s e c a t e g o r i e s was made t o c on­ form w i t h ranges used by th e U . S . Bureau o f th e Census in t h e Census o f P o p u l a t i o n ( 2 0 ) . 3. Ste p 3 . — L o c a t i o n o f each f a c i l i t y s u b s t a t e wa te rs h ed r e g i o n . a c c o r d i n g to c o u n t y and Source and General P r o c e d u r e s . — A highway map f o r M ic hi ga n was used t o l o c a t e each m u n i c i p a l w a s t e w a t e r t r e a t m e n t f a c i l i t y by c oun ty and by t h e seven w a t e r s h e d r e g io n s used in t h i s s t u d y . C. P a r t C. — C o l l e c t i o n o f d a t a on t h e amounts o f g r a n t s o r loans r e c e i v e d from each s u b s id y program p r i o r to Septe mb er, 1969, t h a t helped pay c o s t s o f c o n s t r u c t i n g t r e a t m e n t w o r k s , i n t e r ­ c e p t o r se wer s, o r c o l l e c t i o n sewers. 392 1. S te p 1 . — C o l l e c t i o n o f d a t a on s u b s i d i e s g r a n t e d f o r ment works o r i n t e r c e p t o r se wers. treat­ Sources and Gene ra l P r o c e d u r e s . — S e v e r a l sourc es p r o v i d e d i n f o r m a t i o n on t h e amounts o f g r a n t s and loan s a f f o r d e d to M ic h i g a n com munities wh ich he lp ed pay th e c o s t s o f b u i l d i n g t r e a t m e n t works and i n t e r c e p t o r se wer s. These sources in c l u d e d p u b l i s h e d s e co nda ry sourc es (22 and 23 ) , memoranda p r e p a r e d by t h e Water Resources Commission ( 1 5 and 1 7 ) , and p e r s o n a l c o r r e s p o n d e n c e and an i n t e r v i e w w i t h per sonnel w o r k in g f o r f e d e r a l a g e n c i e s which a d m i n i s t e r s t u d i e d programs (6 and 1 0 ) . Data o b t a i n e d from t h e s e sources i d e n t i f i e d each m u n i c i p a l w a s t e t r e a t m e n t f a c i l i t y w h ic h had r e c e i v e d a s u b s id y p r i o r to Se pte m be r, 1969, and t h e amount o f g r a n t or loan p r o v i d e d t o e a ch . 2. S te p 2 . - - C o l l e c t i o n o f d a t a on s u b s i d i e s g r a n t e d t i o n sew ers . for c o lle c ­ Sources and General P r o c e d u r e s . - - S e v e r a 1 sources p r o v i d e d i n f o r m a t i o n on t h e amounts o f g r a n t s and loans a f f o r d e d t o M ic h i g a n com m unit ies which he lp ed pay t h e c o s t s o f b u i l d i n g c o l l e c t i o n s e we rs . These sourc es in c l u d e d a p u b l i s h e d secondary s ou r c e ( 2 2 ) , a memorandum p r e p a r e d by t h e Wat er Resources Commission ( 1 6 ) , and p e r s o n a l c or re s p o n d e n c e and an i n t e r v i e w w i t h pe r s o n n e l w o r k in g f o r f e d e r a l a g e n c ie s w hi ch a d m i n i s t e r s t u d i e d programs ( 6 , 9 , and 1 0 ) , Data o b t a i n e d from t h e s e sourc es i d e n t i f i e d each community which had r e c e i v e d a s u b s id y p r i o r t o Septe mbe r, 1 9 69 , and the amount o f g r a n t or loan p r o v i d e d to e a c h . Not a l l communi­ t i e s wh ich r e c e i v e s u b s i d i e s f o r c o l l e c t i o n sewers o p e r a t e t h e i r own t r e a t m e n t w o rk s . T h e r e f o r e , such comm unities a r e no t l i s t e d by t h e d i r e c t o r y o f w a s t e w a t e r t r e a t m e n t works (13). As a r e s u l t , t h e d i r e c t o r y cou ld no t be c o n s u l t e d f o r th e e s t i m a t e d p o p u l a t i o n served by t h e s e p l a n t s . Oth er sources had to be c o n s u l t e d f o r t h i s p u rp o s e . These i n c l u d e d t h e se condary s ou r c e and p e r s o n a l c o r r es po nd e nc e r e f e r r e d to e a r l i e r in t h i s s t e p (9 and 2 2 ) . For a few c o m m u n it i e s , e s t i m a t e s o f p o p u l a t i o n serv ed had to be made by r e f e r r i n g to P r e l i m i n a r y P o p u l a t i o n P r o j e c t i o n s f o r Small A rea s in M ic h I g a n ( 1 2 ) . P r o j e c t i o n s o f p o p u l a t i o n f o r t h e y e a r 1965 were used t o e s t i m a t e t h e p o p u l a t i o n - s i z e c l a s s f o r those com mun ities f o r wh ich a p o p u l a t i o n - s e r v e d e s t i m a t e c o u l d not o t h e r w i s e be o b t a i n e d . D. P a r t D. - - S t a t e w i d e and r e g i o n a l summation o f i n f o r m a t i o n o b t a i n e d in P a r t s 6 and C. Summation done by p o p u l a t i o n - s i z e c a t e g o r i e s . 1. Step 1 . — Summation o f I n f o r m a t i o n o b t a i n e d by P a r t B on t h e number o f t r e a t m e n t f a c i l i t i e s . 393 General P r o c e d u r e s . — I n f o r m a t i o n was o b t a i n e d by Steps I and 2 , P a r t B, O b j e c t i v e 2 , on t h e t o t a l number o f m u n i c i p a l t r e a t m e n t works in M ic h ig a n in 1968 and t h e p o p u l a t i o n - s i z e c a t e g o r y o f each w o rk . T h i s i n f o r m a t i o n was summed to y i e l d th e number o f t r e a t m e n t works in each o f t h e seven p o p u l a t i o n s i z e c a t e g o r i e s used in t h i s s t u d y . Th er e by o b t a i n e d was th e number o f t r e a t m e n t works in each s i z e c a t e g o r y f o r t h e e n t i r e s t a t e and f o r each o f th e seven wa te rs h ed r e g i o n s . T h i s summation was p o s s i b l e s i n c e Step 3 o f P a r t B l o c a t e d each t r e a t m e n t f a c i l i t y by c ou n ty and by wa te rs h ed r e g i o n . 2- Step 2 . — Summation o f i n f o r m a t i o n o b t a i n e d by P a r t C on t h e number o f t r e a t m e n t f a c i l i t i e s t h a t had r e c e i v e d a subsid y f o r the f a c i l i t i e s themselves o r f o r i n t e r c e p t o r sewers. General P r o c e d u r e s . — I n f o r m a t i o n was o b t a i n e d by Step 1, P a r t Cf O b j e c t i v e 2 f on t h e number o f m u n i c i p a l t r e a t m e n t p l a n t s in th e s t a t e t h a t had r e c e i v e d a g r a n t o r loan which helped pay t h e c o s t s t o c o n s t r u c t t r e a t m e n t works o r i n t e r ­ c e p t o r sewers. The popuI a t i o n - s i z e c a t e g o r y o f each t r e a t ­ ment p l a n t which r e c e i v e d such a s u b s id y was p r e v i o u s l y known from t h e r e s u l t s o f Steps 1 and 2 o f P a r t B. There­ f o r e , a summation cou ld be made which y i e l d e d t h e number o f t r e a t m e n t works in each o f t h e seven p o p u l a t i o n - s i z e c a t e ­ g o r i e s which had r e c e i v e d a s u b s i d y . T h i s summation was done on a s t a t e w i d e and a s u b s t a t e r e g i o n a l b a s i s . It in cl ud e d s u b t o t a l s f o r t h e number o f t r e a t m e n t works t h a t had been a s s i s t e d by funds r e c e i v e d from each o f t h e s t u d i e d programs t h a t p r o v i d e s u b s i d i e s to t r e a t m e n t works o r i n t e r ­ c e p t o r sewers. E. P a r t E . — A n a l y s i s o f i n f o r m a t i o n ga in ed from p r e v i o u s p a r t s o f O b je c tiv e 2 to determine the d i r e c t incidence o f b e n e f i c i a l e f f e c t s t h a t had r e s u l t e d from t h e a l l o c a t i o n o f s u b s i d i e s from v a r i o u s programs p r i o r to September, 1969. I. Step I . - - A n a l y s i s o f p e r c e n t a g e s d i s c u s s e d under Step 1, P a r t A, O b j e c t i v e 2. General P r o c e d u r e s . — P e r c e n t a g e f i g u r e s d is c u s s e d in St e p 1, P a r t A, O b j e c t i v e 2 , i n d i c a t e the a p p r o x i m a t e e x t e n t to which m a n u f a c t u r i n g p l a n t s w i t h d i f f e r e n t c l a s s i f i c a t i o n s , s i z e s , and l o c a t i o n s u t i l i z e , on a p l a n t - b y - p l a n t b a s i s , public water p o llu t i o n control f a c i l i t i e s . These p e r c e n t a g e s were a n a ly z e d t o d e t e r m i n e what types and l o c a t i o n s o f p l a n t s made t h e most use o f p u b l i c f a c i l i t i e s in t h e f a t e 1960s and t h e r e b y have been a b l e to r e c e i v e a s s i s t a n c e from s t u d i e d sub sid y programs. I n d i c a t i o n s gl ean ed from t h e l i t e r a t u r e and i n t e r v i e w s revi ewe d in C h a p te rs I I I and IV were t h a t smal l e r - t h a n - a . v e r a g e p l a n t s , p l a n t s w i t h l e s s e r - t h a n - a v e r a g e amounts o f t o x i c w a s te l o a d s , p l a n t s l o c a t e d w i t h i n 39^ m e t r o p o l »tan a r e a s , and c e r t a i n o t h e r ty pe s o f p l a n t s would be a b l e t o o b t a i n b e n e f i c i a l e f f e c t s most r e a d i l y s i n c e t h e y make t h e most use o f p u b l i c t r e a t m e n t wo rks . Analysis o f t h e a f o r e m e n t i o n e d p e r c e n t a g e s p r o v id e d e m p i r i c a l s up po rt t o p r e v i o u s l y re c o g n iz e d o b s e r v a t i o n s about t h e i n c i d e n c e o f b e n e f i c i a l e f f e c t s from sub sid y programs. 2. Step 2 . — A n a l y s i s o f p e r c e n t a g e s o f m u n i c i p a l w a s t e w a t e r t r e a t m e n t f a c i l i t i e s in d i f f e r e n t p o p u l a t i o n - s i z e c a t e g o r i e s t h a t had r e c e i v e d a g r a n t o r loan from a t l e a s t one o f t h e s t u d i e d sub sid y programs which h e l p pay t h e c o s t s o f t r e a t ­ ment works and i n t e r c e p t o r sewers. General P r o c e d u r e s . — Chapt ers I I I and IV summarize t h e l i t e r a t u r e revi ewe d and i n t e r v i e w s conducted f o r t h i s study which led to t h e c o n c l u s i o n t h a t t h e g r e a t e r t h e amount o f g r a n t s and loans t h a t were r e c e i v e d by l a r g e r p u b l i c t r e a t ­ ment works then t h e more i n d i r e c t a s s i s t a n c e m a n u f a c t u r i n g p l a n t s cou ld be e x pe ct e d t o r e c e i v e . A b a s i c reason e x i s t s f o r t h i s d i r e c t c o r r e l a t i o n between t h e amount o f s u b s i d i e s a l l o c a t e d t o l a r g e r t r e a t m e n t works and t h e amount o f i n d i ­ r e c t a s s i s t a n c e a f f o r d e d t o m a n u f a c t u r i n g p l a n t s t h a t use pu blic f a c i l i t i e s . T h i s reason is t h a t t h e l a r g e r p u b l i c t r e a t m e n t f a c i l i t i e s have been observed to r e c e i v e a much g r e a t e r p r o p o r t i o n o f t h e i r incoming w a s t e w a t e r s from indus­ t r i a l sources. Hence, i t stands t o reason t h a t m a n u f a c t u r i n g and o t h e r i n d u s t r i a l d i s c h a r g e r s to p u b l i c sewers would r e c e i v e more i n d i r e c t a s s i s t a n c e as th e p r o p o r t i o n o f g r a n t s and loans a l l o c a t e d to t h e l a r g e r m u n i c i p a l f a c i l i t i e s was increased. This s te p , t h e r e f o r e , analyzed the s iz e o f m u nictpal t r e a t m e n t works t h a t had r e c e i v e d g r a n t s and l o a n s . The above r e l a t i o n s h i p and h y p o t h e s i s were in mind when c a l c u l a ­ t i o n s were made o f th e p e r c e n t o f a i l m u n i c i p a l f a c i l i t i e s in each p o p u l a t i o n - s i z e c a t e g o r y t h a t had r e c e i v e d a g r a n t o r a loan from a t l e a s t one o f th e s t u d i e d su bs id y programs which h e l p pay t h e c o s t s o f t r e a t m e n t works and i n t e r c e p t o r sewers. These p e r c e n t s were a r r i v e d a t by d i v i d i n g f i g u r e s on t h e t o t a l number o f o p e r a t i n g t r e a t m e n t f a c i l i t i e s o b t a i n e d from c a r r y i n g o u t Step I , P a r t D, O b j e c t i v e 2 , i n t o f i g u r e s on t h e number o f t r e a t m e n t works which had r e c e i v e d a s ub s id y . These l a t t e r f i g u r e s were o b t a i n e d from c a r r y ­ ing o u t Step 2 , P a r t D, O b j e c t i v e 2 . The a f o r e m e n ti o n e d p e r c e n t s were c a l c u l a t e d f o r each popu1a t i o n - s i z e c a t e g o r y . Th is was done f o r s i z e c a t e g o r i e s a t t h e s t a t e w i d e and sub­ s t a te regional le v e ls . A n a l y s i s o f the se p e r c e n t s a l l o w e d knowledge t o be ga in ed about w h et h er o r no t any p a r t i c u l a r p o p u l a t i o n - s i z e c l a s s e s o f p u b l i c f a c i l i t i e s had not r e c e i v e d g r a n t s o r l o a n s , on a f a c i I i t y - b y - f a c i 1 i t y b a s i s . as f r e q u e n t l y as o t h e r s i z e c l a s s e s . 395 III. O b j e c t i v e 3 . — To I d e n t i f y which Standard I n d u s t r i a l C l a s s i f i c a t i o n s , e m p lo y m e n t - s Iz e c a t e g o r i e s , and l o c a t i o n s o f m a n u f a c t u r in g p l a n t s in M ic h ig a n have r e c e i v e d th e g r e a t e r b e n e f i c i a l e f f e c t s o f t a x exemptions from th e s t a t e ' s program. A. P a r t A . — I d e n t i f i c a t i o n , c l a s s i f i c a t i o n , and l o c a t i o n o f manu­ f a c t u r i n g p l a n t s t h a t had r e c e i v e d a t a x exemption p r i o r t o September, 1969. 1. Step 1 . - - I d e n t i f i c a t i o n o f each m a n u f a c t u r in g p l a n t had r e c e i v e d a t a x e xem pti on. that Sources and General P r o c e d u r e s . — The names o f a l l manufac­ t u r i n g p l a n t s t h a t had r e c e i v e d a t a x exemption from M i c h i g a n ' s program p r i o r to September, 1969, were o b t a i n e d from a memorandum pr epared by Mr. F r a n c i s B. F r o s t ( 1 ) and from Mr. F r o s t ' s per sonal f i l e s ( 8 ) . At t h e ti m e o f t h i s s t u d y , Mr. F r o s t was th e C h i e f o f th e Water Q u a l i t y C o n t r o l D i v i s i o n o f th e M ich ig an Water Resources Commission. One o f h i s r e s p o n s i b i l i t i e s was t o r e v i e w th e a p p l i c a t i o n s and in sp ec t the was te t r e a t m e n t f a c i l i t i e s o f i n d u s t r i a l e s t a b ­ l is h m e n ts t h a t had a p p l i e d to th e S t a t e Tax Commission f o r a t a x exemption from M i c h i g a n ' s program. 2. Step 2 . - - C l a s s i f i c a t i o n and l o c a t i o n o f each d i r e c t l y - or I n d i r e c t l y - c o n t r o l l e d p l a n t t h a t had r e c e i v e d a t a x e xem pti on. Sources and General P r o c e d u r e s . — Mr, F r o s t ' s memorandum and per sonal f i l e s r e v e a l e d t h a t t a x exemptions had been r e c e i v e d by m a n u f a c t u r in g p l a n t s t h a t were both d i r e c t l y and i n d i r e c t l y c o n t r o l l e d by th e commission. The c l a s s i f i c a t i o n s and l o c a ­ t i o n s o f d i r e c t l y - c o n t r o l l e d p l a n t s had a l r e a d y been de te rm in ed by c a r r y i n g ou t Steps 2 and 3 , P a r t A, O b j e c t i v e I . The c l a s s i f i c a t i o n s and l o c a t i o n s o f i n d i r e c t l y - c o n t r o l l e d p l a n t s t h a t had r e c e i v e d a t a x exemption were d e te r m in e d by usin g th e same sources and ge ner a) procedures p r e v i o u s l y r e p o r t e d in Steps 2 and 3 , P a r t A, O b j e c t i v e 1. Only a few m a n u f a c t u r i n g p l a n t s t h a t were i n d i r e c t l y c o n t r o l l e d by the commission had r e c e i v e d a ta x exemption from M i c h i g a n ' s p r o ­ gram p r i o r to September, 1969. C o n s e q u e n t l y , a t t e n t i o n was focused in th e re maining p a r t s o f O b j e c t i v e 3 upon th e i n c i ­ dence o f d i r e c t b e n e f i c i a l impacts o f t a x exemptions upon d i f f e r e n t c l a s s i f i c a t i o n s , s i z e s , and l o c a t i o n s o f d i r e c t 1y controlled plants, B. P a r t B. - - D e t e r m i n a t i o n o f the e m p lo y m e n t - s iz e c a t e g o r y o f each d i r e c t l y - c o n t r o l l e d p l a n t t h a t bad r e c e i v e d a t a x e xem pti on. 1. Step 1. - - D e t e r m i n a t i o n o f th e e m p lo y m e n t - s iz e c a t e g o r y o f each p l a n t . 396 General P r o c e d u r e s . — The a p p r o x i m a t e number o f employees and th e e m p lo y m e n t -s Iz e c a t e g o r y o f m a n u f a c t u r i n g p l a n t s t h a t were d i r e c t l y c o n t r o l l e d by the commission had been d e t e r ­ mined by c o n d u c t in g Steps 1 and 2 , P a r t B, O b j e c t i v e 1. Consequently, the employment-size c a te g o r ie s o f d i r e c t l y c o n t r o l l e d p l a n t s t h a t had r e c e i v e d a t a x exemption cou ld be found by r e f e r r i n g t o th e r e s u l t s o f Step 2 , P a r t B, O b je c t ive 1. C. P a r t C . - - S e c t o r a l , s t a t e w i d e , and s u b s t a t e r e g i o n a l summation o f i n f o r m a t i o n on t a x exemptions r e c e i v e d by d i r e c t l y - c o n t r o l l e d plants. 1. Step 1 . — S e c t o r a l , s t a t e w i d e , and s u b s t a t e r e g i o n a l tion o f inform ation. summa­ General P r o c e d u r e s . - - I n f o r m a t ion p r e v i o u s l y o b t a i n e d on t a x exemptions r e c e i v e d by d i r e c t l y - c o n t r o l l e d p l a n t s c o n s i s t e d o f t h e t o t a l number o f p l a n t s t h a t had r e c e i v e d an exemption p r i o r t o September, 1969, and th e number o f th e s e p l a n t s includ ed in each e m p l o y m e n t - s i z e c a t e g o r y . This inform ation was summarized a c c o r d i n g t o th e same s e c t o r a l , s t a t e w i d e and s u b s t a t e r e g i o n a l scheme p r e v i o u s l y e s t a b l i s h e d by Steps 1 and 2 , P a r t 0 , O b j e c t i v e I . Thus, th e t o t a l number o f d i r e c t l y - c o n t r o l l e d p l a n t s t h a t had r e c e i v e d a t a x exemption and th e t o t a l number o f t h e s e p l a n t s in each employments i z e c a t e g o r y was d e t e r m i n e d f o r ( I ) t h e e n t i r e s t a t e , (2) each wa te rs h ed r e g i o n , and ( 3 ) m e t r o p o l i t a n and nonmetro­ p o l i t a n groups o f c o u n t i e s . For each o f th e s e t h r e e l e v e l s o f a g g r e g a t i o n , t o t a l s were a r r i v e d a t on th e number o f p l a n t s in each i n d u s t r y and each g e n e r a l group o f i n d u s t r i e s t h a t a r e r e f e r r e d t o in Ste p I , P a r t D, O b j e c t i v e 1. D. P a r t D. - - A n a l y s i s o f th e i n c i d e n c e o f d i r e c t b e n e f i c i a l e f f e c t s r e c e i v e d from t a x exemptions by s t a t i s t i c a l l y comparing t h e t o t a l number o f p l a n t s d i r e c t l y c o n t r o l l e d by t h e commission w i t h th e t o t a l number o f p l a n t s t h a t had r e c e i v e d a t a x exemp­ tio n . 1. Step 1 . — Conduct o f c h i - s q u a r e a n a l y s e s to t e s t hypotheses about th e i n c i d e n c e o f b e n e f i c i a l e f f e c t s from t a x e x e m p ti o n s . General P r o c e d u r e s . - - C h a p t e r s I I I and IV r e v i e w l i t e r a t u r e and i n t e r v i e w s from which s e v e r a l hypotheses were de ve lop ed about the i n c i d e n c e o f b e n e f i c i a l e f f e c t s from M i c h i g a n ' s t a x exemption program. C h i - s q u a r e a n a l y s e s were used to t e s t t h e s e hy po the ses . The d e s c r i p t i o n o f the s e a n a l y s e s is p r o v id e d in C h a p t e rs VI and and IX. ( C h a p te r IX a l s o d e s c r i b e s c e r t a i n n o n s t a t i s t i c a i p r o c e d u r e s used t o s u p p l e ­ ment t h e formal s t a t i s t i c a l a n a l y s e s . ) 397 A l p h a b e t i z e d L i s t o f Complete C i t a t i o n s 1. " A p p l i c a t i o n s f o r Tax Exemptions, A ct 2 2 2 , P u b l i c A c t s o f 1966, Water P o l l u t i o n C o n t r o l F a c i l i t i e s , 6 / 6 8 - 2 2 , " Memorandum from the per sonal f i l e s o f Mr. F r a n c i s F r o s t , C h i e f , Water Q u a l i t y C o n t r o l D i v i s i o n , M ich ig an Water Resources Commission. 2. The D i r e c t o r y o f M ich ig an M a n u f a c t u r e r s , 1967 e d . ( D e t r o i t : f a c t u r i n g P u blishing C o., 1967)• 1965 (New Yo rk : Manu- 3- Dunn and B r a d s t r e e t M e t a l w o r k in g D i r e c t o r y , and B r a d s t r e e t , 1 9 6 5 ) . h. Dunn and B r a d s t r e e t Ref er enc e Book, J u l y , and B r a d s t r e e t , 1 9 6 8 ) . 5. F i l e f o l d e r s ke pt by the working s t a f f o f t h e Wat er Resources Com­ m is s io n on each p l a n t which e m i t t e d d i s c h a r g e s t h a t were d i r e c t l y c o n t r o l l e d by t h e commission. 6. I n t e r v i e w w i t h Mr. Robert A b b o t t , Farmers Home A d m i n i s t r a t i o n , M ich ig an O f f i c e , September 2 2 , 1969. 1968 (New Yo rk : Dunn Dunn 7. " O f f e r s o f S t a t e Grants f o r Sewage T r e a t m e n t Works under A c t 3 2 9 , P u b l i c Acts o f 1966, June 2 6 , 1 9 6 8 , " Memorandum from th e personal f i l e s o f Mr. A r t Co rco ran , Grants C o o r d i n a t o r , M ic h ig a n Water Resources Commission. 8. Personal f i l e s o f Mr. F r a n c i s B. F r o s t , C h i e f , Water Q u a l i t y Con­ t r o l D i v i s i o n , M ich ig an Water Resources Commission. 9. Personal l e t t e r from Mr. Edward B r u d e r , A s s i s t a n t Regional A dm in is ­ t r a t o r f o r M e t r o p o l i t a n Development, U .S . Department o f Housing and Urban Development, Region IV , Chicago, I l l i n o i s , date d September 2 9 , 1969. 10. Personal l e t t e r from Mr. John E. S t e w a r t , F i e l d E n g i n e e r , U .S . Department o f Commerce, Economic Development A d m i n i s t r a t i o n , D e t r o i t O f f i c e , dated November 3 , 1969. 11. Po s tc a rd q u e s t i o n n a i r e sen t to m a n u f a c t u r in g p l a n t s in c l u d e d on r e f e r e n c e 18 f o r which employment i n f o r m a t i o n coul d no t be o b t a i n e d from r e f e r e n c e s 2 , 3 , ** o r 5. 12. S t a t e o f M ic h i g a n , Department o f Commerce, O f f i c e o f Economic Expansion, P r e l i m i n a r y P o p u l a t i o n P r o j e c t i o n s f o r Small Areas in M i c h i g a n , Working Paper No. 9, S t a t e Resource P la n n in g Program (Lans i n g : M ich ig an Department o f Commerce, 1966 ) , by Donald E. B a i l e y and A l l a n H. Schmidt. 13- S t a t e o f M i c h i g a n , Department o f P u b l i c H e a l t h , D i v i s i o n o f E n g i n e e r i n g , " D i r e c t o r y o f Wastewater Tr e a t m e n t Works in M ic hi ga n as o f F e b r u a r y , I 968 . " (Mimeographed.) 398 14. S t a t e o f M i c h i g a n , Employment S e c u r i t y Commission, " L a b o r Force and Employment E s t i m a t e s , " MESC Form 3 2 2 1 , Rev. 1 2 / 6 2 ( f o r 1 9 6 8 ) . 15- S t a t e o f M i c h i g a n , Water Resources Commission, " A p p l i c a n t s E l i g i b l e f o r A d d i t i o n a l Gr an t Funds Under S e c t i o n 3 . ( 1 ) o f A ct 3 2 9 , P u b l i c A ct s o f 1966, as Amended," June 2 3 , 1969 . (M im e o g r a p h e d . ) 16. S ta te o f Michigan, Water Resources Commission, " C o l l e c t i n g Sewer P r o j e c t s E l i g i b l e f o r S t a t e G r a n t s in Or der o f P r i o r i t y and Recommended f o r Funding in t h e 1969 C a l e n d a r Y e a r , " September 1, 1969. (Mim eog ra phe d. ) 17* S t a t e o f M i c h i g a n , Water Resources Commission, " P r o j e c t s from June 2 7 , 1968 P r i o r i t y L i s t f o r which A p p l i c a n t s Have P r o v id e d Assurance o f t h e i r I n t e n t i o n s t o Award C o n s t r u c t i o n C o n t r a c t s b e f o r e Demcember 3 1 , 1 9 6 9 . " June 2 3 , 1969. (M im e o g r a p h e d . ) 18. S ta te o f M ichigan, Status ( I n d u s t r i a l ographed.) 19- T a b l e pre pa re d by Mr. Ti m o th y H i l t z on S t a n d a r d I n d u s t r i a l C l a s s i ­ f i c a t i o n s , volume o f e f f l u e n t s , number o f f i r m s , and ra nge o f e f f l u e n t d i s c h a r g e s o f i n d u s t r i a l f i r m s l i s t e d in t h e f i l e s o f t h e M ic h ig a n Water Resources Commission in 1968. ( M im e og ra ph e d. ) 20. U . S . , Department o f Commerce, Bureau o f t h e Census, 1970 Census o f Population: Advance R e p o r t , M i c h i g a n , P C ( V 2 - 2 4 , Gene ra l P o p u l a t i o n C h a r a c t e r i s t i c s (W a s hi n gt on , D . C . : Government Pr in t i ng O f f i c e , 1971). 21. U . S . , Department o f Commerce, Bureau o f t h e Census, County Business P a t t e r n s , 1967: M i c h i g a n , CBP-67“ 24 ( W a s h in g t o n , D . C . : Government P r i n t i n g 6 'f f i c e , 19 6 8 ) . 2 2. U . S . , Department o f Commerce, Economic Development A d m i n i s t r a t i o n , Pr ogr es s Report o f t h e Economic Development A d m i n i s t r a t i o n , 1968 ( W as hin gto n, D . C . : Government P r i n t i n g O f f i c e , 19 6 8 ) . 23. U . S . , Department o f t h e I n t e r i o r , F e d e r a l Wat er P o l l u t i o n C o n t r o l A d m i n i s t r a t i o n , P r o j e c t R e g i s t e r , December 3 1 . 1968 (W a s h in g t o n , D .C .: Government P r i n t i n g O f f i c e , 1 9 6 9 ) . 24. U . S . , Department o f L a b o r , Bureau o f Employment S e c u r i t y , ES-21 9F , M ic h ig a n R e p r i n t ( 1 2 - 6 7 ) , " ( f o r 1968 ) . 25. U . S . , E x e c u t i v e O f f i c e o f th e P r e s i d e n t , Bureau o f t h e Bu dg e t, Standard I n d u s t r i a l C l a s s i f i c a t i o n M a n u a l , 1967 ( W a s h in g to n , D . C . : Government P r i n t i n g O f f i c e , 1967 ) . Water Resources Commission, "Waste Wat er C o n t r o l and Commercial) as o f A p r i l 1, 1 9 6 8 . " (Mime- "Form APPENDIX F THE CLASSIFICATION OF MANUFACTURING INDUSTRIES 399 APPENDIX F THE CLASSIFICATION OF MANUFACTURING INDUSTRIES In tro d u ctio n Some 23 m a n u f a c t u r i n g i n d u s t r i e s have been b a s i c r e s e a r c h framework o f t h i s s t u d y . * tors ta ken system. i n t o acco unt when a r r i v i n g a t In a d d i t i o n , were p la c e d category, i t describes i n t o t h r e e broad included w i t h i n the T h i s app end ix d i s c u s s e s f a c ­ the 23- i n d u s t r y c l a s s i f i c a t i o n t h e means by which th e s e in d u s tria l in d u stries groups — th e M in o r Wa ter Users the W a t e r - U s i n g Nondurables c a t e g o r y , and th e W a t e r - U s i n g D ur ab les c a t e g o r y . S e l e c t i o n o f 23 A ll 23 in dustries w ith in l e a s t one p l a n t w h i c h , Industries t h e r e s e a r c h framework in 19 68, e m i t t e d include a t in to p u b lic waters discharges which were d i r e c t l y c o n t r o l l e d by t h e M ic h ig a n Wa ter Resources Commis­ sion. Except f o r pr od uc ts en tire subclassificatio ns w ith in in d u s try , data tw o -d igit incorporated in dustries. o f th e food p r o c e s s i n g th e food and k in d r e d i n t o th e framework a p p l i e s to In o t h e r words, w i t h th e s o l e e x c e p t i o n i n d u s t r y , d a t a w h ic h p e r t a i n s to plan ts w ith *As T a b l e 2 in Cha pte r VI r e v e a l s , e i g h t e e n o f th e s e i n d u s t r i e s a r e t w o - d i g i t Standard I n d u s t r i a l C l a s s i f i c a t i o n s ( S I C ' s ) , f o u r a r e t h r e e - d i g i t S I C ' s , and one is a f o u r - d i g i t S IC . A ll th re e - or fo u r­ d i g i t i n d u s t r i e s a r e s u b c l a s s i f i c a t i o n s w i t h i n t h e t w o - d i g i t food products i n d u s t r y . One o f th e t h r e e - d i g i t food i n d u s t r i e s , h e r e i n c a l l e d t h e " m i s c e l l a n e o u s food p r o d u c t s i n d u s t r y , " a c t u a l l y i n c l u d e s plants w ith in three separate t h r e e - d i g i t S IC 's . 400 401 d i r e c t l y - c o n t r o l l e d d i s c h a r g e s as w e l l as d a t a which r e f e r s p l a n t s w i t h i n an e n t i r e f o r broad t w o - d i g i t industry, i n d u s t r y have o n l y been added up t o and r e p o r t e d in d u strial however, was to a l l c la s s ific a tio n s . s u b d iv id e d because o f The food p ro c e s si ng two b a s i c reasons. D i s t i n c t d i f f e r e n c e s e x i s t among t h e p r o d u c t i o n processes o f v a r i o u s food p l a n t s , and a wi de range o f w a s t e lo a d s resu lts F u r t h e r m o r e , d u r i n g t h e e a r l y stages o f t h i s study, P o l l u t i o n C o n t r o l A d m i n i s t r a t i o n was p u b l i s h i n g from these processes* th e Fed e ra l Water r e p o r t s which included n a t i o n w i d e e s t i m a t e s o f d i r e c t c o s t s f o r c a n n e r i e s , meat p ro c e s si ng p l a n t s , and d a i r i e s . ^ lead o f t h e f e d e r a l The a u t h o r d e c i d e d , agency and p r o v i d e therefore, to f o l l o w th e i n f o r m a t i o n on the d i s t i n c t kinds o f food p r o c e s si n g p l a n t s which e m i t t e d d i r e c t l y - c o n t r o l l e d discharges in 1968 . Placement o f I n d u s t r i e s Broad C a t e g o r i e s P r i m a r i l y based upon th e small d ire c tly -c o n tro lle d discharges number o f p l a n t s which e m i t t e d in 1968, i n t o t h e Minor Water Users c a t e g o r y . p l a n t s , w i t h the ordnance and t e x t i l e s Into four i n d u s t r i e s were grouped T h is c a t e g o r y in c l u d e s o n l y s i x i n d u s t r i e s c l a i m i n g one each and the f u r n i t u r e and p r i n t i n g and p u b l i s h i n g i n d u s t r i e s c l a i m i n g two e a c h .^ ^These r e p o r t s a r e r e f e r r e d t o h e r e i n as t h e " c o s t - o f - c 1eanw a t e r s e r i e s " which is c i t e d in Chapters I I I and IV. 2 The t i t l e " M in o r Water User s" has been s e l e c t e d to i n d i c a t e t h a t i n d i v i d u a l i n d u s t r i e s w i t h i n t h i s c a t e g o r y , when compared w i t h most I n d u s t r i e s w i t h i n the o t h e r two c a t e g o r i e s , do not use l a r g e amounts o f w a t e r w i t h i n M ich ig an o r i n c l u d e many p l a n t s which e m it t h e ir e f f l u e n t s into M ichigan's pu blic w aters. **02 B esi des t h e f u r n i t u r e and p r i n t i n g and p u b l i s h i n g one o t h e r In dustry, t h e p r e c i s i o n equipment two p l a n t s which se nt d i r e c t l y - c o n t r o l l e d p u blic waters. This in dustry, Using D u r a b le s c a t e g o r y r a t h e r discharges in dustries in to M ichigan's t h e Watei— than t h e Minor W a t e r U sers c a t e g o r y . plants w ith in from SIC 33 t o SIC 39 w i t h i n W i t h a few e x c e p t i o n s , a l l included o n ly however, was p l a c e d w i t h i n Such pl ace m ent was done in o r d e r to keep a l l tw o -d ig it industry, in d u stries, plants w ith in t h e seven t h e same c a t e g o r y . th e s e seven S I C ' s w h ic h had d i r e c t l y - c o n t r o l l e d d i s c h a r g e s e m i t t e d e f f l u e n t s whose w a s t e l o a d s a r o s e from some k in d o f m e t a l w o r k i n g o p e r a t i o n . ^ Most p r o d u c t s p r o - duced from such o p e r a t i o n s a r e c o n s i d e r e d d u r a b l e goods. The o r i g i n s o f w a s t e l o a d s e m i t t e d w ith in in dustries d iv e rs ifie d category. facto r is e v i d e n t in p u t s used by th e s e p l a n t s . 3 in t h e e f f l u e n t s o f plants in th e Watei—Using N on du ra b le s c a t e g o r y a r e much more than th os e o f w a s t e l o a d s This 2 in t h e W a t e r - U s i n g D u r a b l e s from the w i d e a r r a y o f raw m a t e r i a l s and in t h e p r o c e s s i n g and m a n u f a c t u r e o f goods produced Most o f t h e s e p r o d u c t s a r e n o n d u r a b l e , and a l l but The a u t h o r has w r i t t e n an u n r e p o r t e d m a n u s c r i p t o f t h e l o c a ­ t i o n w i t h i n M ic h i g a n o f p l a n t s w h ic h e m i t t e d d i r e c t l y - c o n t r o l l e d d i s ­ charges in 1968. T h i s m a n u s c r i p t Is w r i t t e n on an i n d u s t r y - b y - i n d u s t r y basis. From t h e m a n u s c r i p t , which is based upon a r e v i e w o f l i t e r a t u r e and i n f o r m a t i o n o b t a i n e d d u r i n g i n t e r v i e w s , t h e a u t h o r l e a r n e d about the o r ig in s of w asteloads. 2 D u r a b l e goods a r e d e f i n e d f o r purposes o f f e d e r a l censuses and s t a t i s t i c a l s e r i e s as . , items w i t h a normal l i f e e x p e c t a n c y o f three years o r m ore." N on d u ra b le goods a r e c o n s i d e r e d t o be " . . . items which g e n e r a l l y l a s t f o r o n l y a s h o r t t im e ( t h r e e y e a r s o r l e s s ) . " [ U . S . , Department o f Commerce, O f f i c e o f t h e A s s i s t a n t S e c r e t a r y f o r Economic A f f a i r s , D i c t i o n a r y o f Economic and S t a t i s t i c a l Terms (Washing­ ton, D .C .: Government Pr i n t i n g O f f i c e , 1 9 6 9 ) , p. I 5 - ] 3 The a u t h o r l e a r n e d o f t h e s e m a t t e r s from t h e l i t e r a t u r e and i n t e r v i e w s w h ic h have been r e f e r r e d t o in t h e u n r e p o r t e d m a n u s c r i p t mentioned above in f o o t n o t e 1. *103 one I n d u s t r y w i t h i n industry. t h is category is c o n s id e r e d a n o nd ur a bl e goods For purposes o f t h i s s t u d y , s t o n e , c l a y , and g l a s s however, th is i n d u s t r y — has been grouped Using Nondurabtes c a t e g o r y . i n d u s t r y — the into the W ater- T h i s has been done t o keep t h e W a t e r - Ustng Du rables c a t e g o r y comprised p r i m a r i l y o f p l a n t s whose w a s t e lo a d s a r i s e m o s t l y from m e ta l w o r k in g o p e r a t i o n s . ^ In de ed , th e t i t l e s o f th e W a t e r - U s i n g Nondurables c a t e g o r y and t h e W a t e r - U s in g D u r a b le s c a t e g o r y could have been th e " W a t e r - U s i n g Nonmetalworking" c a t e g o r y and th e " W a t e r - U s i n g M e t a l w o r k i n g " c a t e g o r y . The term " w a t e r - u s l n g " w i t h i n th e t i t l e s o f th e s e two c a t e g o r i e s has been s e l e c t e d to i n d i c a t e t h a t most o f the i n d u s t r i e s w i t h i n these c a t e g o r i e s , when compared t o i n d u s t r i e s w i t h i n t h e Min or Water Users c a t e g o r y , use l a r g e amounts o f w a t e r w i t h i n M ic h ig a n and in c l u d e numerous p l a n t s which em it t h e i r e f f l u e n t s i n t o M i c h i g a n ' s p u b l i c waters. The a u t h o r has c o l l e c t e d i n f o r m a t i o n about i n d u s t r i a l wate r use and e f f l u e n t d i s p o s a l w i t h i n M i c h i g a n . T h i s i n f o r m a t i o n comes from f e d e r a l and M ich ig an s o u r c e s , and has been summarized in u n r e ­ po rte d m a n u s c ri p ts o f i n d u s t r i a l w a t e r use and w a s t e w a t e r t r e a t m e n t needs which v a r i o u s i n d u s t r i e s had d u r i n g th e l a t e 1960s and e a r l y 1970s. APPENDIX G ASSUMPTIONS AND LIMITATIONS OF METHODS USED TO STUDY THE INCIDENCE OF ADVERSE EFFECTS FROM REGULATORY POLICIES AND OF BENEFICIAL EFFECTS FROM SUBSIDIES 40* APPENDIX G ASSUMPTIONS AND LIMITATIONS OF METHODS USED TO STUDY THE INCIDENCE OF ADVERSE EFFECTS FROM REGULATORY POLICIES AND OF BENEFICIAL EFFECTS FROM SUBSIDIES I n t r o d u c t ion The t i t l e t h e a p p e n d ix o f t h i s appe nd ix a p t l y d e s c r i b e s is amply in t ro d u c e d in C hap te rs V I I i t s c o n t e n t , and and V I I I . T h is a ppe nd ix proceeds by f i r s t d i s c u s s i n g assumptions and l i m i t a t i o n s w i t h respect to to T a b l e s 3 th ro ug h 5* in terp re ta tio n of the in c i d e n c e o f a d v e rs e e f f e c t s prec ede those p e r t i n e n t t o fic ia t effects Assumptions and l i m i t a t i o n s i n t e r p r e t a t i o n o f the in C h a p t e r V I I I . assumptions and l i m i t a t i o n s employment e f f e c t s in in Ch apt er V I I i n c i d e n c e o f bene- A separate section in v o lv e d pertinent then di sc u s s e s in te rp re tin g w orst-possible from T a b l e s 6 thr ough 15* Remarks About In terpreting I n t e r p r e t i n g T a b l e s 3 Through 5 th e I n c i d e n c e o f Adverse E f f e c t s C o n s id e r t h e v a r i o u s sources o f e r r o r s involved in c a l c u l a t i n g t h e p e r c e n t a g e s o f T a b l e s 3 t hr oug h 5 and th e p r o b a b l e e f f e c t o f t h e s e e r r o r s on t h e a c c u r a c y o f p e r c e n t a g e f i g u r e s . the a u th o r in d e p e n d e n t l y c l a s s i f i e d the c omm issio n's s t a t u s f o u r - d i g i t Standard lis t for In d u s tria l For one t h i n g , each o f t h e 1*38 p l a n t s named on 1968 i n t o a s i n g l e t w o - , C la s sific a tio n . th r e e -, or His means o f c l a s s i f y i n g **05 4 406 certain p l a n t s no doubt r e s u l t e d in some p l a n t s b e in g c l a s s i f i e d f e r e n t l y from th e c l a s s i f i c a t i o n done by t h e Bureau o f Most d i f f e r e n c e s o f t h i s i.e ., establishm ents in c lu d e d w i t h i n t h e W a t e r - U s i n g D u r a b le s c a t e g o r y . c la s s ific a tio n . to place lis t in to a s in g le They sometimes m a n u f a c t u r e s e v e r a l o f p r o d u c t s which a r e c h a r a c t e r i s t i c o f d i f f e r e n t ondly, t h e Census. ty p e a p p l y t o m e t a l w o r k i n g e s t a b l i s h m e n t s , These e s t a b l i s h m e n t s were t h e most d i f f i c u l t in d u strial t h e a u t h o r ' s assignment o f some p l a n t s in d u stries. lines Sec­ in c l u d e d on t h e s t a t u s i n t o a s i n g l e e m p lo y m e n t - s iz e c a t e g o r y m i g h t have d i f f e r e d t h e assig nme nt done by t h e Bureau o f were most v a riab le th e Census. Errors o f l i k e l y a p p l i c a b l e t o food p r o c e s s i n g p l a n t s w i t h seasonal d if­ l e v e l s o f e m pl oy m e nt .' F in a lly , c ertain from this kind th e ir percentage f i g u r e s were bound to be u n d e r e s t i m a t e s because no e m p l o y m e n t - s i z e c a t e g o r i e s could be d e te r m i n e d f o r 29 p l a n t s lis t for 1968. centage f i g u r e s i n c l u d e d on t h e s t a t u s Such u n d e r e s t i m a t e s p r i m a r i l y a p p l y to th os e p e r ­ reported in T a b l e s k and 5 f o r th e s m a l l e s t m e n t - s i z e c a t e g o r i e s o f t h e food and t h e f a b r i c a t e d m e t a l s two em ploy in d u stries. 2 The County Business P a t t e r n s r e p o r t s employment d a t a f o r th e mid-March pay p e r i o d , a p e r i o d in th e o f f - s e a s o n f o r food p r o c e s s i n g plants. T h e r e f o r e , t h e lower ( o f f - s e a s o n ) employment f i g u r e s c o l l e c t e d f o r t h e s e p l a n t s were r e f e r r e d to when s e p a r a t e p l a n t s wer e p la c e d i n t o an e m p lo y m e n t - s Iz e c a t e g o r y . Any e r r o r s from t h i s method would o n l y a f f e c t p e r c e n t a g e f i g u r e s w i t h i n t h o s e rows o f T a b l e s 3 t h r o u g h 5 wh ich a p p l y to t h e f o u r s e p a r a t e s i z e c a t e g o r i e s . Percentage f ig u r e s w i t h in t h e rows f o r t o t a l e s t a b l i s h m e n t s , however, would n o t be so a f f e c t e d . 2 T w e n t y - t h r e e o f th e s e 29 e s t a b l i s h m e n t s were known t o be e i t h e r small food p r o c e s s i n g p l a n t s o r small p l a t i n g w o r k s . The o n l y p e r c e n t a g e f i g u r e s t h a t would be u n d e r e s t i m a t e s because o f unknown employment l e v e l s a r e those w i t h i n rows a p p l i c a b l e to each o f t h e four employment-size c a t e g o r ie s . **07 The g r e a t e s t o f adverse e f f e c t s lim ita tio n to the i n t e r p r e t a t i o n o f the from T a b l e s 3 th ro ug h 5 p r o b a b l y does not r e l a t e to t h e a f o r e s t a t e d problems enc ou n te re d when t r y i n g comparable s e t s o f d a t a f o r use Rather, In th e a u t h o r ' s ju d g m e n t , two the g r e a te s t lim itatio n in o r d e r to resu lts from in fe r that a r e l a t i o n s h i p e x i s t s between t h e m agn itu de o f p e r c e n t a g e f i g u r e s and t h e i n c i d e n c e o f a d v e rs e e f f e c t s . assumptions is t h a t fa c ilitie s , One o f t h e r e q u i r e d u n d e r l y i n g those e s t a b l i s h m e n t s as compared w i t h e s t a b l i s h m e n t s t h a t pal to a r r i v e a t In th e c o m p u t a t io n o f p e r c e n t a g e s . t h e f o l l o w i n g assumptions t h a t a r e r e q u i r e d direct in c i d e n c e in cl ud e d on the s t a t u s lis t, s e nt t h e i r w a s t e w a t e r s t o m u n i c i ­ would have t o pay t h e g r e a t e r d i r e c t c o s t s o f c o n t r o l l i n g water p o l lu t i o n . A second b a s ic assumption then f o l l o w s t h a t payment o f th e s e g r e a t e r d i r e c t c o s t s would cause r e l a t i v e l y g r e a t a d v e rs e effects lis t. then to f a l l If It i n c i d e n t upon those e s t a b l i s h m e n t s named on th e s t a t u s the s e two assumptions a r e not lo g ic a lly th e g r e a t e r follow s that those proportions o f p lan ts too f a r impact groups and subgroups w i t h in c lu d e d on th e s t a t u s a l s o be s u b j e c t t o t h e br u n t o f th e p o t e n t i a l effects removed from a c t u a l i t y , l i s t would in c i d e n c e o f a d v e r s e from e nf or c e m e nt o f r e g u l a t o r y c o n t r o l s a d m i n i s t e r e d by the M ic h ig a n Wat er Resources Commission, enfor ce men t o f t h e d i r e c t in dustrial T h i s s t a te m e n t r e g u l a t o r y c o n t r o l s o f t h e commission upon d i s c h a r g e s would p o t e n t i a l l y e f f e c t s upon v a r i o u s im plies th a t have caused g r e a t e r a d v e rs e impact groups and subgroups than would have enforcement o f t h e c om m iss io n's charges to p u b l i c u t i l i t y i n d i r e c t c o n t r o l s upon i n d u s t r i a l sewers. dis­ *108 These two u n d e r l y i n g assumptions and t h e i r examined In l i g h t o f th e f i n d i n g s o f e x p l o r a t o r y r e s e a r c h . refe re nc e to these fin d in g s allows c e r t a i n tion i m p l i c a t i o n s can be B rief l i m i t a t i o n s o f each assump­ to be i d e n t i f i e d . It seems most l i k e l y above is s u b j e c t to few er plants fo r th e ir the f i r s t lim itatio n s e x p lo r a t o r y research revealed factu ring that b a s i c assumption s t a t e d than th e second. t h a t as a r u l e s e lf-co n tro l Findings of the d i r e c t c o s ts t o manu­ o f wa s te w a t e rs could a c t u a l l y be expected to be g r e a t e r than the d i r e c t c o s t s o f p r e t r e a t m e n t plus the c o s t s r e q u i r e d t o pay sewer s e r v i c e c h a r g e s . f i n d i n g s d i d not lead to t h e c o n c l u s i o n c os ts were n e c e s s a r i l y minor and o f however, that that To be s u r e , th e l a t t e r lim ited e f f e c t . th e g r e a t e s t share o f d i r e c t c o s t s to would have been brought about by th e s t r i c t and the se kind s o f I t was found, industry th a t immediate enforcement o f stream s ta nd a rd s and o t h e r r e g u l a t i o n s would have been r e q u i r e d o f m a n u f a c t u r in g p l a n t s w i t h d i s c h a r g e s sent d i r e c t l y into p u b lic w a te r s .' T h is d i s c u s s i o n in c l u d e s an i m p l i c i t assumption t h a t each m a n u f a c t u r in g e s t a b l i s h m e n t lo ca te d in M ich ig an in 1968 d is c h a r g e d a i l o f i t s i n d u s t r i a l wa s t e w a t e rs e i t h e r d i r e c t l y i n t o p u b l i c w a t e r s or d i r e c t l y i n t o p u b l i c u t i l i t y sewers. E x p lo ra to ry research re ve a le d , however, a few in s t a n c e s o f p l a n t s which sent one p o r t i o n o f t h e i r w a s te w a te rs to p u b l i c w a t e r s w h i l e o t h e r p o r t i o n s were d is c h a r g e d to c o l l e c t i o n sewers. Because o f th e s e a p p a r e n t l y few i n s t a n c e s , an undetermined number o f e s t a b l i s h m e n t s In cl ud e d on th e s t a t u s l i s t f o r I 968 e m i t t e d m u l t i p l e d i s c h a r g e s which were e i t h e r s u b j e c t to the d i r e c t or the i n d i r e c t r e g u l a t o r y c o n t r o l o f the commission. In s o f a r as such m u l t i p l e d i s c h a r g e s d i d e x i s t , some o f th e pe rc en ta g e f i g u r e s r e p o r t e d in the t a b l e s o f t h i s s e c t i o n coul d be s l i g h t o v e r ­ e s t i m a t e s o f th e i n c i d e n c e o f d i r e c t c o s t s to p a r t i c u l a r impact groups and subgroups. Throughout the d i s c u s s i o n o f Chapters V I I and V I I I , r e f e r e n c e to i n d u s t r i a l w a s t e w a t e rs Is intended to a p p l y o n l y t o those w a s t e ­ w a te rs which emanate f o r t h from i n d u s t r i a l types o f o p e r a t i o n s . In 409 The second b a s ic assumption mentioned above cannot be sup­ po rt e d as s t r o n g l y as t h e f i r s t . to th e second a ssu mp tio n. result in Thus, more s e ve re These l i m i t a t i o n s li m i t a t i o n s apply r e s u l t from f a c t o r s which i n d i r e c t and o t h e r e f f e c t s b e s id e s j u s t d i r e c t e f f e c t s . ^ Quite p l a i n l y , the se kind s o f f a c t o r s would no t be rea s on ab le t o p r e d i c t lead to th e c o n c l u s i o n t h a t t h a t those it impact groups and sub­ groups which were expected to s ho u ld e r the g r e a t e r d i r e c t c o s t s o f p o llu tio n control would be t h e same ones which would f i n a l l y be a r in g th e g r e a t e r magnitude o f t o t a l control. Lim itations adv ers e e f f e c t s end up from p o l l u t i o n to the second assumption seem s e v e r e enough to b r in g about s u b s t a n t i a l s h ifts in the f i n a l e f f e c t s away from t h e p a t t e r n s o f in c i d e n c e o f pe rc ent age s shown by T a bl es 3 through 5 . p o s s i b l e employment e f f e c t s a r e r e l i e d i n c i d e n c e o f ad v e rs e i n d i c a t e d by th e magnitudes Consequently, w o rs t- upon more than these per c en ta g es in Chapter V I I . Above comments w a r r a n t the c o n c lu s io n t h a t the p e r c en t ag e f i g u r e s o f T a bl es 3 through 5 p r o b a b ly p r o v i d e a good a p p r o x i m a t i o n o f those impact groups and subgroups t h a t would have had to pay r e l a ­ t i v e l y g r e a t shares o f th e d i r e c t co s ts to con trol in du strial o n ly a general wastewaters. n o t i o n o f which r e q u i r e d by a c on c e r t e d e f f o r t But thes e same p e r c en t ag es a l l o w impact groups and subgroups would have o t h e r words, r e f e r e n c e is no t made to those wa s t e w a t e rs t h a t r e s u l t from the s a n i t a r y use o f w a t e r by w o rk e r s in m a n u f a c t u r in g p l a n t s . These s a n i t a r y w a s te w a te rs a r e o f t e n sent t o m u n i c i p a l works f o r t r e a t ­ ment. in a d d i t i o n , small m a n u f a c t u r in g p l a n t s in p a r t i c u l a r may d i s ­ pose o f t h e i r domestic types o f w a s te w a te rs i n t o s e p t i c t a n k s . ^These f a c t o r s a r e t h o r o u g h l y d isc us se d s c r i p t s r e f e r r e d t o in Appendix A. in unpu bl ish ed manu­ 410 had t o f i n a l l y bear r e l a t i v e l y g r e a t sha res o f t h a t th e s e d i r e c t c o s t s were o n l y In terpreting the the t o t a l in itia to rs o f. In c i d e n c e o f B e n e f i c i a l E ffects To th e e x t e n t t h a t some m a n u f a c t u r i n g p l a n t s com mission's s t a t u s l i s t u tility sewers as w e l l for a d v e rs e e f f e c t s in cl ud e d on t h e 1968 d is c h a r g e d w a s t e w a t e r s as p u b l i c w a t e r s , into pu blic some complements o f th e p e r ­ c e n t a g e f i g u r e s o f T a b l e s 3 through 5 a r e no doubt u n d e r e s t i m a t e s o f t he p r o p o r t i o n s o f p l a n t s w i t h i n c e r t a i n which made use o f m u n i c i p a l grams. Th ere is, impact groups and subgroups f a c i l i t i e s and b e n e f i t e d from su bs id y p r o ­ however, no way to e s t i m a t e e i t h e r any such u n d e r e s t i m a t e s o r t h e th e magnitude o f impact groups and subgroups t o which th e u n d e r e s t i m a t e s a p p l y . A second assumption is a l s o r e q u i r e d the i n c i d e n c e o f both a d v e rs e and b e n e f i c i a l centages. in o r d e r to effects in terpret from s u b j e c t p e r ­ An assumption must be made t h a t p e r c e n t a g e f i g u r e s a r e r e a s o n a b le a p p r o x i m a t i o n s o f t h e p r o p o r t ions o f e s t a b l i s h m e n t s which discharged t h e i r wastewaters to p u b lic waters a n o t h e r manner, an assumption in 1968. is r e q u i r e d t h a t Or, stated in th e u n r e p o r t e d comple­ ments o f r e p o r t e d p e r c e n t a g e s c l o s e l y e s t i m a t e t h e p r o p o r t i o n s o f p l a n t s which sent t h e i r w a s te w a te rs to p u b l i c u t i l i t y In both o f That is, sewers in 1 968 . i t s f o r m s , t h i s assumption seems t o r e p r e s e n t a c t u a l i t y . s u b j e c t p e r c e n t a g e f i g u r e s a r e p r o b a b l y as c l o s e as any a p p r o x i m a t i o n s cou ld be to t h e a c t u a l which sent d i s c h a r g e s e i t h e r shares o f m a n u f a c t u r i n g p l a n t s to p u b l i c w a t e r s o r t o p u b l i c works. N e v e r t h e l e s s , c e r t a i n d i f f i c u l t i e s mentioned above were encou nter ed in the c l a s s i f i c a t i o n of statu s-1ist p l a n t s and in th e placement o f A) 1 these p la n ts i n t o an e m p l o y m e n t - s i z e c a t e g o r y . These d i f f i c u l t i e s ke pt the p e r c e n t a g e s from bei n g a n y t h i n g o t h e r than e s t i m a t e s o f the a f o r e stated p ro p o rtio n s. A t h i r d , and f i n a l , in terpretation of programs. the from r e a l i t y , is s o l e l y a p p l i c a b l e incidence o f b e n e f ic i a l T h i s assumption component p a r t s . assumption effects to th e from subsidy is bes t thought o f as having two r e l a t e d To t h e e x t e n t t h a t th e s e two components a r e removed th e y cause t h e p e r c e n t a g e f i g u r e s o f T a b l e s 3 thr ough 5 to be o v e r e s t i m a t e s o f th e p r o p o r t i o n s o f m a n u f a c t u r i n g p t a n t s which used p u b l i c f a c i l i t i e s and ga in ed b e n e f i t s from s u b s i d i e s . The t w o - p a r t assumption hereby r e f e r r e d order to is r e q u i r e d in f o r u n r e p o r t e d complements t o r e p o r t e d p e r c e n t a g e s t o s e rv e as i n d i c a t o r s o f t h e p r o p o r t i o n s o f e s t a b l i s h m e n t s which sent w a s t e ­ waters to p u b lic u t i l i t y sewers and which t h e r e b y paid a r t i f i c i a l l y low sewer s e r v i c e c h a r g e s . In o t h e r words, use o f complements to t h e aforementioned percentage f ig u r e s fic ia l effects from sub s id y programs m a n u f a c t u r in g e s t a b l i s h m e n t to p u b l i c to fa c ilitie s in 1968 i n d i c a t e th e in c i d e n c e o f be ne - i n h e r e n t l y assumes t h a t e v e r y In Michi gan which d i s c h a r g e d w a s t e w a t e r s in d ire c tly r e c e iv e d from s u b s i d i e s t h a t had been d i r e c t l y a l l o c a t e d fin an cial benefits to m u n icip ali t i e s . The two p a r t s o f t h i s ne c e s s a r y assumption must then m a i n t a i n t h a t c e rta in u n ifo rm itie s existed to m u n i c i p a l i t i e s and m uni cip al fa c ilitie s in both th e d i r e c t a l l o c a t i o n o f s u b s i d i e s in th e a b i l i t y o f m a n u f a c t u r i n g customers o f to i n d i r e c t l y b e n e f i t from t h e s e a l l o c a t i o n s . These u n i f o r m i t i e s can be e s t a b l i s h e d c o n c e p t u a l l y by assuming t h a t e v e r y M ic h ig a n m u n i c i p a l i t y t h a t took in in dustrial wastewaters p r i o r 412 t o Septe mb er, 19&9, had r e c e i v e d f e d e r a l o r s t a t e s u b s i d i e s which he lped pay t h e c o s t s t o c o n s t r u c t t h e i r w a t e r p o l l u t i o n c o n t r o l w o rk s . T h i s assu mpt ion must c o n t i n u e by a s s e r t i n g t h a t e v e r y one o f th e s e m u n icip a litie s b en efits then passed a lo n g f i n a n c i a l customers o f t h e i r f a c i l i t i e s . c o u r s e , coul d o n l y t a k e p l a c e levied to in d u strial Such pa ss ing a lo n g o f b e n e f i t s , o f if a ll the aforementioned m u n i c i p a l i t i e s sewer s e r v i c e charges which o n l y r e co ve r e d t h a t p o r t i o n o f c on­ s t r u c t i o n c o s t s which had to be borne l o c a l l y . To t h e e x t e n t t h a t one o r bo th components o f t h i s assumption d i d no t hold t r u e in a c t u a l i t y , then la tte r in terp retatio n s of th e complements o f r e p o r t e d p e r c e n t a g e s were bound to r e s u l t statements o f the prop o rtio n s o f c e r t a i n fa c tu rin g plants in o v e r ­ kind s and l o c a t i o n s o f manu­ t h a t were a b l e to r e c e i v e b e n e f i t s from s t u d i e d subsid y programs. I n f o r m a t i o n p r o v id e d in th e s e c t i o n o f C h a p t e r V I I I e n t i t l e d An I n d i c a t i o n o f th e Degree o f U n i f o r m i t y in th e A l l o c a t i o n o f S u b s i d i e s a l l o w s judgments t o be made about th e e x t e n t t o which the firs t p a r t o f t h i s assumption d e v i a t e s from r e a l i t y . This d e s c r i b e s t h e p a t t e r n s whereby s u b s i d i e s had been a l l o c a t e d M ich ig an among d i f f e r e n t wa te rsh ed r e g i o n s . inform ation t h ro ug ho u t s i z e s o f m u n i c i p a l i t i e s and among v a r i o u s By exam ining th e s e p a t t e r n s , a check is p r o v id e d about t h e de g r e e to which t h e i r assumed u n i f o r m i t y a c t u a l l y d i d e x i s t in r e a l i t y . No such e m p i r i c a l l y based e x a m i n a t i o n and c h e c k , has been made w i t h r e s p e c t as sumption. Th at however, t o t h e second p a r t o f t h e a f o r e s t a t e d I s , d a t a was not c o l l e c t e d and a n a ly z e d a bo u t th e p r o p o r t i o n s o f d i f f e r e n t s i z e s and l o c a t i o n s o f M ic h ig a n m u n i c i p a l i t i e s which a c t u a l l y d i d c a r r y o u t th e assumed p r a c t i c e o f levying 413 a rtific ia lly low sewer s e r v i c e c h a r g e s . a bo u t r a t e - s e t t i n g The l a c k o f Inform atio n p r a c t i c e s o b t a i n e d from a su rv ey o f m u n i c i p a l i t i e s . however, does n o t p r o h i b i t c o n c l u s i o n s about th e u n i f o r m i t y o f t h e s e practices sourc es t o be drawn from knowledge ga in ed from o t h e r s o u r c e s . include the f i e l d litera tu re referred to i n t e r v i e w s , case s t u d i e s , and r e v i e w o f in o t h e r p a r t s o f t h i s w o rk . From t h e s e s o u r c e s , the a u t h o r was led t o c o n c lu de t h a t f e w , o r v i r t u a l l y m u n icip alities Such none, o f t h e in M ic hi ga n which had r e c e i v e d a s u b s id y l e v i e d sewer s e r v i c e c ha r ge s t h a t were s e t high enough to r e c o v e r t h e t o t a l costs o f c o n s t r u c t i n g w a s t e w a t e r c o l l e c t i o n and t r e a t m e n t wo rks. m os t, if no t v i r t u a l l y a l l , o f t h e s e m u n i c i p a l i t i e s appeared to f o l l o w the assumed u n i f o r m p r a c t i c e o f s e t t i n g to recover the lo cal such charg es o n l y hi g h enough share o f c o n s t r u c t i o n c o s t s . c o n c l u s i o n has n o t been backed up by d a t a c o l l e c t e d p a litie s late To be s u r e , from a l l in t h e s t a t e wh ich o p e r a t e d p o l l u t i o n c o n t r o l 1960s. effective But no f e d e r a l Rather, o r M ich ig an m unici­ works laws o r r e g u l a t i o n s in the t h a t were up t o and t hro ug h t h e 1960s r e q u i r e d m u n i c i p a l i t i e s r e c o v e r th e f u l l costs o f b u ild in g such f a c i l i t i e s . e x i s t e n c e and e n f o r c e m e n t o f any w r i t t e n p r e s s u r e s upon l o c a l a u th o ritie s legal to W i th o u t the requirem ents, seemed s u f f i c i e n t this no o t h e r t o m o t i v a t e many o f them t o r e c o v e r and r e pa y t h e s u b s i d i z e d p o r t i o n o f s u b j e c t con­ stru ction CO 5 1 S . Remarks About General I n t e r p r e t i n g T a b l e s 6 Through 15 Kinds o f Assumptions and L i m i t a t i o n s I n t e r p r e t a t i o n o f T a b l e s 6 th ro ug h 15 depends upon t h e b a s i c assumption t h a t a d i r e c t r e l a t i o n s h i p e x i s t s between t h e p r o p o r t i o n o f ti 14 employment in s t a t u s - 1 i s t p l a n t s w i t h d i s c h a r g e s a s s ig n e d l e s s - t h a n - ade qu a te w a s t e w a t e r - c o n t r o l w o rst-po ssib le ratings, p a r t i c u l a r l y E r a t i n g s , and the in c i d e n c e o f employment lo ss e s t h a t mig ht have o c c u r r e d from e n f o r c i n g t h e c om m is si on 's d i r e c t o t h e r as sumptions a r e c o r o l l a r y each o t h e r in a l o g i c a l regulatory c o n tro ls . t o t h i s b a s i c as su mp tio n, and f o l l o w sequence. The f i r s t o f t h e s e c o r o l l a r y assumptions holds t h a t statu s-1ist those p l a n t s w i t h d i s c h a r g e s a s si gn e d 1e s s - t h a n - a d e q u a t e r a t i n g s would have had g r e a t e r - t h a n - a v e r a g e needs t o p r o v i d e o f wastewater disch a rg es . tio n Several Next in th e in- hous e c o n t r o l l i n e o f re a s o n in g t h a t the p la n ts w it h g r e a t e r wastewater c o n tro l is the assump­ needs would have a l s o had t o pay g r e a t e r - t h a n - a v e r a g e d i r e c t c o s t s o f meet in g commission regulations lows t h a t in e f f e c t d u r i n g 1968. From t h i s , an assumption then f o l ­ those p l a n t s fa ced w i t h th e a b o v e - a v e r a g e t r e a t m e n t needs and d i r e c t c o s t s would be th e s e lf s a m e p l a n t s which would have to s u f f e r r e l a t i v e l y g r e a t adverse e f f e c t s m issio n 's d i r e c t from s t r i c t regulatory co n tro ls. enfor ce men t o f th e com­ In the c o n t e x t o f Ch apter V I I , the se a d v e r s e e f f e c t s a r e assumed to t a k e th e form o f complete c l o s u r e s of s ta tu s -1 is t discharges p l a n t s which e m i t t e d in to p u b lic waters 1e s s - t h a n - a d e q u a t e l y c o n t r o l l e d in 1968. Such c l o s u r e s a r e assumed to t a k e p l a c e because o f t h e r e q u i r e d payment o f costs r e fe r r e d ment e f f e c t s lis t t o above . Stated o th e rw is e , th e a b o v e - a v e r a g e d i r e c t th e w o r s t - p o s s i b l e employ­ a r e assumed to have been p o t e n t i a l l y p lan ts w ith E -ra te d discharges pay the d i r e c t c o s t s r e q u i r e d to an A, o r a d e q u a t e , ra tin g . the r e s u lt o f s ta tu s - in p a r t i c u l a r not being a b l e to t o upgrade t h e i r c o n t r o l o f w a s te w a te rs 415 T h e r e a r e , o f c o u r s e , many l i m i t a t i o n s t o th e assumptions s e t f o r t h above In s e q u e n t i a l o r d e r . L i m i t a t i o n s t o th os e a s s u m p t io n s , however, a r e n o t t h e o n l y ones which now need t o be c o n s i d e r e d . Rather, other li m i t a t i o n s also r e s u lt th e p e r c e n t a g e f i g u r e s shown by T a b l e s 6 th ro ug h 15 a r e r e as on ab le a p p r o x im a ti o n s o f t h e a c t u a l in d i f f e r e n t lis t prop o rtio n s o f the t o t a l number o f workers impact groups and subgroups t h a t were employed p l a n t s w i t h d i s c h a r g e s a s s ig n e d v a r i o u s Keeping of from an i m p l i c i t assumption t h a t lim itations several kinds i n t e r p r e t a t i o n o f w o r s t - p o s s i b l e employment e f f e c t s from T a b l e s 6 through 15 can be c a t e g o r i z e d . those k in d s o f r a t i n g s o f adequacy. in mind t h e above k in d s o f a s su m p tio ns , to in s t a t u s - l i m i t a t i o n s which r e s u l t in vol ve d These c a t e g o r i e s in c l u d e from: 1. problems p lan ts, in t h e c l a s s i f i c a t i o n o f s t a t u s - l i s t 2. d i f f i c u l t i e s in o b t a i n i n g comparable and c o m pl e te s e ts o f d a t a on employment, 3. reference to adequacy-of-wastewater c o n tro l r a tin g s which were a s sig ned t o s t a t u s - l i s t p l a n t s b e f o r e stream stan dar ds were f o r m a l l y adopted in M i c h i g a n , 4. the method o f a s s i g n i n g the e n t i r e employment o f s t a t u s 1 i s t p l a n t s which had m u l t i p l e d i s c h a r g e s to th e lowest a l p h a b e t i c a l a d e q u a c y - o f - c o n t r o l r a t i n g o f any s e p a r a t e d i scharge, 5. th e re c o g n iz e d unre as ona bl ene ss o f assuming t h a t t h e b r u n t o f a d v e rs e e f f e c t s upon i n d u s t r i a l employment would f a l l i n c i d e n t p r i m a r i l y upon those s t a t u s - l i s t p l a n t s w i t h d i s ­ charges assigned a 1e s s - t h a n - a d e q u a t e r a t i n g , p a r t i c u l a r l y an E r a t i n g , in 1968, and 6. t h e o b v i o u s l y s t ro n g assumption t h a t a l l s t a t u s - l i s t p l a n t s which e m i t t e d d i s c h a r g e s assigned these I e s s - t h a n - a d e q u a t e r a t i n g s would have been fo r c e d c o m p l e t e l y ou t o f business by d i r e c t c o s t s r e q u i r e d to meet commission e n fo r c e m e n t s . *»I6 Some P o s s i b l e E f f e c t s o f L i m i t a t i o n s P r e s e n t purposes a r e se rv e d by p o i n t i n g o u t , b le, how t h e above k i n d s o f lim itatio n s m a g n it u d e o f employment f i g u r e s q u en tly, lim itatio n s fiv e of have p o s s i b l y a f f e c t e d s ta tu s -lis t t h e m a g n it u d e o f p e r c e n t a g e f i g u r e s t h r o u g h 15- resu lt for From t h e f o l l o w i n g comments, re s u lt p la n ts and, reported it w ill in t h e o v e r e s t i m a t i o n o f in t h e i r u n d e r e s t i m a t i o n . t o have r e s u l t e d in enforced r e g u la tio n s would have b e e n . con s e ­ in T a b l e s 6 these f i g u r e s w h ile o th e r s But t h e combined e f f e c t o f the s ix th categ ory o f lim itatio n s in d icatio n s of p o te n tia l the f i r s t Standing a l o n e , is no dou bt s u f f i c i e n t employment l o s s e s due t o t h a t a r e much g r e a t e r than such lo ss e s p r o b a b l y Yet, t h e r e a r e some d e f i n i t e reasons f o r c a l c u l a t i n g t h e w o r s t - p o s s i b l e a d v e r s e employment e f f e c t s and f o r a c c e p t i n g l i m i t a t i o n s which must accompany t h e i r As men tion ed e a r l i e r plants w ith in by t h e a u t h o r d iffe re n t from Bureau o f t h e Census sio n ). affected in t h i s t h e meta 1w o r k in g been c l a s s i f i e d th e be seen t h a t c e r t a i n th e above l i m i t a t i o n s c a n n o t be d e t e r m i n e d . however, j u s t i n s o f a r as p o s s i ­ in dustries appendix, some few s t a t u s - l i s t in p a r t i c u l a r m i g h t have tw o -d ig it in d u stries t h a t were t h e same p l a n t s were c l a s s i f i e d (and a l s o Such d i f f e r e n c e s in terp re ta tio n . in dustries into th e i n t o by t h e th e M i c h i g a n Employment S e c u r i t y Commis­ in c l a s s i f i c a t i o n p r i m a r i l y would have t h e a c c u r a c y o f employment and p e r c e n t a g e f i g u r e s g i v e n f o r separate metalworking in d u stries. I t c a n n o t be s a i d , t h e employment and p e r c e n t a g e f i g u r e s o f any g i v e n overestim ated o r underestim ated. ho we ver , w h e th e r in d u stry a re thereby 417 The de gr e e o f a c c u r a c y o f t h e employment and p e r c e n t a g e f i g u r e s in clu ded In T a b l e s 6 th ro ug h 15 is no doubt o f w o rk e r s in some s t a t u s - l i s t p l a n t s l i m i t e d because t h e number r e p o r t e d by i n d u s t r i a l were not e x a c t l y t h e same as th e number o f w o rk e r s in cl ud e d d ire cto ries in employ­ ment r e p o r t s o b t a i n e d by th e M ic h ig a n Employment S e c u r i t y Commission f o r March, 1968. Here a g a i n , it is no t p o s s i b l e to e s t i m a t e t h e degre e to which any p e r c e n t a g e f i g u r e s a r e u n d e r e s t i m a t e d o r o v e r e s t i m a t e d by such l a c k o f c o m p a r a b i l i t y between t h e two s e t s o f employment d a t a . Y e t , among th e d i f f i c u l t i e s in o b t a i n i n g employment problem o f not be in g a b l e t o o b t a i n p l a n t s has no doubt r e s u l t e d i n f o r m a t i o n on 29 s t a t u s - l i s t Me ntio n has been made e a r l i e r appendix t h a t most o f th e s e p l a n t s were e i t h e r figures p l a t i n g wo rks. small th e f i g u r e s adequacy-of-wastewater-control lis t. food p ro c e s si ng In d u s trie s are t h a t have t h e r e b y been u n d e r e s t i m a t e d . When p r e p a r i n g T a b l e s 6 thr oug h 15, sion s t a t u s In t h i s T h e r e f o r e , employment and p e r c e n t a g e f o r th e food p r o c e s s i n g and f a b r i c a t e d m e t a l s most l i k e l y th e in some u n d e r e s t i m a t i o n o f c e r t a i n employ­ ment and p e r c e n t a g e f i g u r e s . p l a n t s or metal inform atio n, r a tin g s obtained Because o f t h e d a t e o f w o rst-po ssib le p o te n tia l r e f e r e n c e was made to employment losses this from th e 1968 commis­ lis t, magnitudes o f i n d i c a t e d by t h e t a b l e s a r e no t t h e same as those l o s s e s which would have been i n d i c a t e d r e f e r e n c e could have been made t o r a t i n g s fo r a year In th e e a r l y 1970s a f t e r have t h e i r influence f e l t . r e s t r i c t i o n s and e f f l u e n t It r e p o r t e d by a s t a t u s lis t stream s t a n d a r d s had begun to Is t o be e x pec te d t h a t th e e f f l u e n t s t a n d a r d s faced by s t a t u s - l i s t p l a n t s 1968 would have been more s t r i n g e n t if if in stream st a n d a r d s had then been 418 completely in e f f e c t . cen ta ge f i g u r e s lis t In o t h e r words, t h e employment l e v e l s and p e r ­ shown by t h e t e n t a b l e s f o r c a t e g o r i e s o f plants w ith less-than-adequate control o f discharges are than what t h e y would have been if p e r c en ta g e F i g u r e s g iv e n le ss stream s t a n d a r d s had a l r e a d y been in th e e nfo rc em ent st a ge by 1968. From t h i s s t a n d p o i n t , in th e t a b l e s do no t then, the in d ic a te the p o te n tia l in c i d e n c e o f w o r s t - p o s s i b l e e f f e c t s upon employment t h a t and statu s- in terstate i n t r a s t a t e w a t e r q u a l i t y s t a n d a r d s might have brought a b o u t . Rather, thes e p e r c e n t a g e s in d ic a te the p o t e n t ia l effects t h a t might have been caused enforcement o f a i 1 t h e d i r e c t An ot he r l i m i t a t i o n employment in c e r t a i n thes e r a t i n g s . in 1968 by s t r i c t and regulatory controls resu lts assigned to any s e p a r a t e one o f the same r a t i n g . The e n t i r e number o f w o rke rs i n t o t h e lowe st a l p h a b e t i c a l the m u l t i p l e d i s c h a r g e s . T h i s method, purpose o f the t a b l e s t o possible p o te n tia l los s e s i n d i c a t e th e is r a t i n g a s si g n e d T h is method no doubt in t h e however, less-than-adequate in ke eping w i t h incidence o f the the w o rs t- in employment. A t t e n t i o n has been c a l l e d e a r l i e r in t h i s a p pe nd ix t o ob vio us l i m i t a t i o n s which r e s u l t from any assumption t h a t o f the g r e a t e r t o t a l a d v e r s e e f f e c t s same as the t o a r e those which i n t o p u b l i c w a t e r s and t h e s e d i s c h a r g e s served t o o v e r s t a t e t h e number o f employees categories o f ra tin g s . in e x i s t e n c e . from t h e method o f a s s i g n i n g The kinds o f p l a n t s hereby r e f e r r e d in such p l a n t s was placed overall then immediate s t a t u s - ! i s t p l a n t s to a p a r t i c u l a r c a t e g o r y o f emitted m u l t i p l e discharges were not a l l i n c i d e n c e o f such from e n f o r c e d inci de nc e o f t h e g r e a t e r d i r e c t c o s t s the f i n a l in c i d e n c e regulations is th e r e q u i r e d by such k \s e nf or c e m e nt . In o r d e r t o r e p o r t a n y t h i n g a t a l l in cid en ce o f a d v e rs e e f f e c t s has had to be made. about the p o t e n t i a l in t h i s s t u d y , however, such an assumption The a u t h o r knows o f no p ro c e du re s whereby a l l r a m i f i c a t i o n s which lead t o t h e f i n a l the i n c i d e n c e o f s u b j e c t ad v e rs e e f f e c t s can be e s t i m a t e d w i t h r e s p e c t t o t h e r e g i o n a l and i n d u s t r i a l impact groups and subgroups s e l e c t e d f o r t h i s s t u d y . Among t h e g e n e r a l this categories of lim ita tio n s listed e a rlie r s e c t i o n , o n l y th e f o u r t h and s i x t h coul d have been a v o i d e d . i s , o n l y these two kinds o f in h e r e n t lim itatio n s resulted The o t h e r f o u r k in d s o f lim ita tio n s , because o f assumptions r e q u i r e d t o cope w i t h e i t h e r o f the r e a l world, problems encountered in however, e x i s t th e c o m p l e x i t i e s in o b t a i n i n g d a t a and a r r i v i n g a t methods needed t o d e p i c t th e s e c o m p l e x i t i e s , o r timing o f th is That from assumptions in the methods used t o a r r i v e a t p e r c e n t a g e f i g u r e s g i v e n the ten t a b l e s . * in in th e inopportune study. L i m i t a t i o n s o f th e f o u r t h type c o u l d have been a voi ded by p r o r a t i n g t h e number o f workers in each s t a t u s - 1 i s t p l a n t which e m i t t e d m u l t i p l e d i s c h a r g e s assig ned more than one a l p h a b e t i c a l r a t i n g . Such a p r o r a t i o n could have d i v i d e d th e t o t a l number o f workers in each such p l a n t e q u a l l y among those c a t e g o r i e s o f r a t i n g s t h a t wer e assig ned to its m u ltip le discharges. T h is method would have reduced th e t o t a l number o f worke rs t h a t were placed i n t o th e lower a l p h a b e t i c a l r a t i n g s o f many i n d u s t r i a l impact groups and subgroups a t both th e s t a t e and s u b s ta te r e g i o n a l l e v e l . Wi th r e s p e c t t o th e s i x t h c a t e g o r y o f l i m i t a t i o n s , th e pr ocedure o f c a l c u l a t i n g pe rc ent age s coul d have e a s i l y proceeded under the assumption t h a t o n l y a f r a c t i o n o f those s t a t u s - 1 i s t p l a n t s which e m i t t e d d i s c h a r g e s w i t h l e s s - t h a n - a d e q u a t e r a t i n g s would have been f or c e d c o m p l e t e l y ou t o f business by th e d i r e c t c o s t s o f w a t e r p o l l u ­ tion c o n tr o l. Indeed, a range o f such reduced p e rc en ta g es coul d have been c a l c u l a t e d based upon a range o f assumptions about th e p r o p o r t i o n o f p l a n t s which would have, a c t u a l l y had to shut down o p e r a t i o n s . '* •2 0 The combined e f f e c t o f t h e f o u r t h and s i x t h c a t e g o r i e s o f lim itatio n s has r e s u l t e d in c a l c u l a t i o n o f p e r c e n t a g e f i g u r e s include d in t h e t e n t a b l e s on t h e b a s i s t h a t e v e r y s t a t u s - ! I s t p l a n t which e m i t t e d an y d i s c h a r g e a s s ig n e d a l e s s - t h a n - a d e q u a t e w a s t e w a t e r c o n t r o l rating in 1968 , bu t p a r t i c u l a r l y an E r a t i n g , would have been f o r c e d c o m p l e t e l y o u t o f busine ss by d i r e c t c o s t s r e q u i r e d control o f such d i s c h a r g e s t o an a d e q u a t e , o r A, a s s u m p t io n , and i t s a s s o c i a t e d lim itatio n s, m a jo r caus es f o r c o n c l u d i n g t h a t have c o n s i d e r a b l y o v e r e s t i m a t e d t h a t m ig h t have o c c u r r e d and to upgrade t h e i r rating . no doubt r e p r e s e n t th e p e r c e n t a g e f i g u r e s o f th e p o t e n t i a l in th e l a t e T h is b a s i c lo ss e s the t a b l e s in employment 1960s as a r e s u l t o f t h e s t r i c t immediate en fo rc e m e nt o f t h e com m is si on 's d i r e c t l y c o n t r o l in d u strial discharges. ' It is over im p o rt a n t to no te t h a t both th e f o u r t h and s i x t h c a t e g o r i e s o f lim it a t io n s contributed of po ten tial losses. employment the Furthermore, to th is overestim ation it t h a t t h i s c o n s i s t e n t o v e r e s t i m a t i o n was p u r p o s e l y needs t o be r e c o g n iz e d intended t o r e s u l t I t is d i f f i c u l t to imagine any s e t o f c ir c u m s t a n c e s in which g e n e r a l economic c o n d i t i o n s would be so poor t h a t the d i r e c t c o s t s o f m eet in g w a t e r p o l l u t i o n c o n t r o l r e g u l a t i o n s would be s u f f i c i e n t to f o r c e a l l p l a n t s w i t h in ad eq ua te c o n t r o l o f w a s t e w a t e r s c o m p l e t e l y out o f business. And even i f such poor economic c o n d i t i o n s were to e x i s t , s o c i e t y would p r o b a b l y no t stand f o r such r i g i d enfor ce men t o f laws t o c o n t r o l w a t e r p o l l u t i o n . O r , a l t e r n a t i v e l y , s o c i e t y would then see t o i t t h a t t e c h n i c a l and economic a s s i s t a n c e t o i n d u s t r y p r o h i b i t e d such tremendous a d v e r s e e f f e c t s on t h e i n d u s t r i a l s e c t o r . The w o r s t - p o s s i b l e a d v e r s e e f f e c t s on employment seem r e a l i s t i c o n l y in t h e u n l i k e l y case in which b o th economic and e c o l o g i c c o n d i t i o n s were in a s t a t e o f em ergency. T h e n , e c o l o g i c c o n d i t i o n s would r e q u i r e t h e s t r i c t e nf or c e m e nt o f p o l l u t i o n c o n t r o l laws. T h e n , economic c o n d i t i o n s would cause th e c l o s u r e o f p l a n t s because o f meet in g t h e s t r i c t l y e n f o r c e d la w s . Th en , economic c o n d i t i o n s would no t a l l o w th e p r o v i s i o n o f a s s i s t a n c e in o r d e r t o less en th e a d v e r s e e f f e c t s o f t h e s t r i c t l y e n f o r c e d la w s . from methods used when c a l c u l a t i n g autho r's the percentage f i g u r e s . p r i m a r y purpose was to a r r i v e a t t h a t would in d ic a t e the p o t e n t i a l p o s s i b l e employment in o p e r a t i o n d ire c t For t h e sets o f percentage f ig u r e s incidence o f the w o rs t- lo ss e s from enf or ce me nt o f c o n t r o l s which were in 1 9 6 8 . ^ Recommendations f o r f u t u r e r e s e a r c h o f f e r e d in C h a p t e r XI I p e r t a i n t o t h e need t o reduce w o r s t - p o s s i b l e e s t i m a t e s t o more r e a l i s t i c estim ates. Such a r e d u c t i o n should be p o s s i b l e now t h a t s e v e r a l more year s e x p e r i e n c e has been g a in e d in th e en fo rc e m e nt o f stream s t a n d a r d s and r e l a t e d r e g u l a t o r y p o l i c i e s . APPENDIX H SOME CASE STUDIES ABOUT THE INCREASED USE OF PUBLIC WORKS BY MANUFACTURING PLANTS 422 APPENDIX H SOME CASE STUDIES ABOUT THE INCREASED USE OF PUBLIC WORKS BY MANUFACTURING PLANTS I n t r o d u c t ion During e a r l y stages o f t h i s s t u d y , fa c tu ring plants treatment i t was found t h a t manu­ in M ic hi ga n whose w a s te w a te rs were amenable to in p u b l i c works were a c t i n g sim ilarly to p l a n t s in o t h e r p a r t s o f th e c o u n t r y by sending g r e a t e r volumes o f t h e i r e f f l u e n t s p u b l i c works. T h i s observed t r e n d had an im p o rt a n t s e l e c t i o n o f study O b j e c t i v e s I and 2 . i n f l u e n c e upon t h e By making more use o f p u b l i c f a c i l i t i e s , m a n u f a c t u r e r s wer e a b l e to escape th e d i r e c t c o n t r o l s a d m i n i s t e r e d by s t a t e and f e d e r a l a g e n c ie s . fits At th e same t i m e , from an i n c r e a s i n g title s t u d i e s about the in M i c h i g a n . th e y were a b l e to r e c e i v e monetary bene­ f lo w o f s u b s i d i e s g i v e n r e vi ew g i v e n national in dicates, to l o c a l III and some case p u b l i c works by m a n u f a c t u r in g p t a n t s t h i s appendix adds a s t a t e - l e v e l in Chapters communities systems. t h i s app en di x p r e s e n t s in creased use o f Thus, regulatory water p o llu tio n control fo r c onstruction o f water p o llu tio n control As i t s to IV o f dimension to the l i t e r a t u r e which d e p i c t s the t r e n d f o r m a n u f a c t u r e r s t o make g r e a t e r use o f p u b l i c w a s t e ­ water t r e a t m e n t works. Case s t u d i e s p re s en te d tio n received during in t h i s appendix a r e based upon in f o r m a ­ interview s. Mention *123 is made o f most a l l o f the U2k Instances revealed e ith e r by i n t e r v i e w s in wh ich e x i s t i n g m a n u f a c t u r i n g p l a n t s had a l r e a d y s h i f t e d o r had plans e f f l u e n t d i s c h a r g e s from p u b l i c w a t e r s examples o f t h e e m is s i o n o f to p u b li c u t i l i t y le a r n e d abo ut d u r i n g Summary o f the t i m e o f e x p l o r a t o r y Interview s e i t h e r o p e ra to rs o f m unicipal obtained during treated supervised. these plants in r e s e a r c h b u t wer e 1968 t h e a u t h o r h e ld in s o u t h e r n M i c h i g a n as wastewater treatm en t c o m m is s i o n e r s . Table H -l plants, c ity summarizes engi­ Inform atio n i n t e r v i e w a b o u t volumes and o r i g i n s o f w a s t e ­ by t h e f a c i l i t i e s which t h e s e persons o p e r a t e d o r The f o l l o w i n g d i s c u s s i o n s t r u c t u r e a summary o f Other in Seven Communities i n t e r v i e w s w i t h seven men o r women who worked n e e rs , o r county d r a i n th e ir in terv ie w s . As A pp end ix C r e v e a l s , d u r i n g November o f waters s e w e rs . in c r e a s e d use o f p u b l i c works by m a n u f a c t u r i n g M i c h i g a n no dou bt e x i s t e d a t not to s h i f t refers I n t e r v i e w s co nducted to T a b l e H - l in o r d e r to in seven s o u t h e r n M i c h i g a n commun i t i e s . Join t m u n ic ip a l-in d u s tria l s tru c te d d u rin g the At th e t i m e f i e l d jo in t treatm ent 1960s f i r s t a t treatm ent fa c ilitie s ^ B a t t l e C re e k and then a t i n t e r v i e w s were be in g conducted system w e r e con­ Kalamazoo. in 1368 a t h i r d in M ic h i g a n was bei n g b u i l t a t Monroe. Table H -l *As t h e term is used h e r e i n , j o i n t m u n i c i p a l - i n d u s t r i a I t r e a t ­ ment f a c i l i t i e s a r e th o s e p l a n n e d , c o n s t r u c t e d , and o p e r a t e d under l o n g - t e r m c o o p e r a t i v e agr e em e nt s between m u n i c i p a l and i n d u s t r i a l o ffic ia ls . O t h e r m u n i c i p a l f a c i l i t i e s a r e o n l y pl an ne d and c o n s t r u c t e d by t h e p u b l i c s e c t o r , w i t h i n d u s t r i a l c ust om ers d e c i d i n g t o use t h e f a c i l i t i e s a f t e r co n stru ctio n . These o t h e r f a c i l i t i e s a r e n o t j o i n t m u n i c i p a l - i n d u s t r t a l works even though t h e y t a k e in t h e w a s t e w a t e r s from i n d u s t r i a l c u s t o m e r s . TABLE H - l . — Percentages o f average d a ily volumes o f wastewaters tre a te d in 1968 by the f a c i l i t i e s o f seven Southern Michigan m u n ic ip a litie s th a t o rig in a te d from in d iv id u a lly metered discharges from manufacturing e stab lish m e n ts .3 M u n ic ip a lity Estimated P opulation Served by Treatment Faci 1 Itie s * 1 Average D a ily Volume o f Wastes Treated (MGD)C Average D a ily V o l. o f Wastes from Metered Mfg. Dischgs.^ (HGD) Average D a ily V o l. o f Wastes from o th e r Sourcese (MGD) Percent o f Total Wastes O rig in a tin g from Metered Mfg. Discharges ( P e t.) (1) (2) (3) (M (3 )/(2 ) 2 ,90 0,00 0 D e tro it 7 50.0 MOD (Not known (Not known) 10.0 MGD 3 5 .0 HGD 22.2% (Not known) Grand Rapids 220,300 4 5 .0 FI in t 211,000 3 0 .0 3 .5 2 6 .5 11 -7 Kalamazoo 84,200 2 5 .6 15.8 9 .0 6 1 .7 B a ttle Creek 40,700 17.0 6 .8 10.2 4o.o Monroe® 25,600 4 .6 Wyomi ng 20,000 6.3 o ffic ia ls (Not known) 2 .5 (Not known) 3-8 (Not known) 3 9.7 Based upon inform ation obtained in in terview s w ith e ith e r municipal wastewater treatm en t p la n t operators o r o th e r in charge o f such p u b lic works. ^Some population estim ates taken from S ta te o f H ichigan , Department o f P u b lic H e a lth , D iv is io n o f Engineering, "D ire c to ry o f Wastewater Treatment Works in Hichigan as o f February, 1968." (Mimeographed.) cM il)io n g allo n s per day. ^ In d iv id u a l records were kept on the d a ily in flo w o f wastewaters from establishm ents w ith metered d ischarges. establishm ents were g e n e ra lly large p lants which used g re a te r than 20 m illio n g allo n s o f water per y e a r. These e0 th e r sources p rim a rily include wastewaters from small m anufacturing p la n ts , commercial estab lish m ents, and domestic users. Ho records were kept by m unicipal o f f i c i a l s about the o rig in s o f incoming wastewaters in to the D e tro it and Monroe treatm ent works. ®At the time o f in te rv ie w s , a new wastewater treatm ent p la n t was being b u ilt a t Monroe. The exact average d a ily volume o f wastes to be tre a te d in th is new p la n t was not yet known. P re lim in a ry estim ates h e ld , however, th a t about 70 p er­ cent o f wastewaters to be received in the new p la n t would o r ig in a te from th re e paper m i l l s th a t were scheduled to jo in the Monroe system. Jb- M vn 42 6 shows t h a t a bo u t 40 p e r c e n t and 62 p e r c e n t o f o f wastewaters tr e a t e d by t h e B a t t l e C ree k and Kalamazoo p l a n t s , re s p e c tiv e ly , orig in ated discharges. from l a r g e m a n u f a c t u r i n g p l a n t s w i t h m ete re d A fo o tn o te to t h is ta b le also be in g b u i l t a t Monroe was scheduled its incoming discharges. t h e a v e r a g e d a i l y volumes in dicates to t a k e t h a t t h e system in a b o u t 7 0 p e r c e n t o f w a s t e w a t e r s from l a r g e m a n u f a c t u r i n g p l a n t s w i t h m e te re d In terview s revealed t h a t each o f t h e s e a f o r e m e n t i o n e d p r o p o r t i o n s o f t r e a t e d w a s t e w a t e r s which were made up by m a n u f a c t u r i n g discharges represented s u b s ta n tia l which were in e f f e c t j u s t In t h e p r e s e n t c o n t e x t , m u n icip a litie s p rio r it is in c r e a s e s o v e r to t h e c o n s t r u c t i o n o f i m p o r t a n t t o n o t e t h a t each o f th e And, in each instance, charges o n l y r e co ve r e d those p o r t i o n s o f borne by e i t h e r B a t t l e C r e e k , local Kalamazoo, o r Monroe. paper m i l l s a t Monroe were a b l e to b e n e f i t t h a t were d i r e c t l y a l l o c a t e d Table H-l C re e k , refers As a r e s u 11 , a treatm ent f a c i l i t i e s none o f t h e s e o t h e r examples of and t e c h n i c a l fin an cin g , Kalamazoo, and in d ire c tly from to the m u n i c i p a l i t i e s . in d u s tria l use o f p u b l i c e i t h e r had been made o r was in t h e o f f i n g . be s u r e , a u th o ritie s several t o o t h e r M ic h i g a n com mun ities b e s i d e s B a t t l e Kalamzoo, and Monroe where g r e a t e r legal three t h e c o s t s which had to be and two food p r o c e s s i n g p l a n t s a t B a t t l e C r e e k , th e s u b s i d i e s wo rks. sewer s e r v i c e paper m i l l s and a m a n u f a c t u r e r o f p h a r m a c e u t i c a l s a t several the j o i n t r e c e i v e d s u b s i d i e s which p a i d p a r t o f t h e c o n s t r u c t i o n costs o f t h e i r works. paper m i l l th o s e p r o p o r t i o n s involved a r ra n g e m e n t s between To t h e t h o r o u g h g o in g kind s in d u strial and m u n i c i p a l t h a t a r e n e c e s s a r i l y p a r t o f t h e pr oc e s s o f p l a n n i n g , b u i l d i n g , and o p e r a t i n g j o i n t m u n i c i p a I - 1 n d u s t r i a I fa c ilitie s . 427 N evertheless, th e s e o t h e r examples p o i n t e d o u t t h a t a s i z a b l e number o f manufacturing establishm ents begun t o , o r were p l a n n i n g t o , sewers in s te a d o f d i s c h a r g i n g Consider, for located in s e v e r a l e m it t h e i r w a s t e w a t e r s them d i r e c t l y treatment in th e l a t e to p u b l i c u t i l i t y into p u b lic w a te rs. i n s t a n c e , what happened a buts the sou th wes te rn p a r t o f Grand R a p id s . incorporated com munities had in Wyoming, a town which A fter being 1950s, Wyoming b u i l t c o l l e c t i o n p l a n t which began to r e c e i v e w a s t e w a t e r s le g a lly sewers and a in 1964. By 1968, m a n u f a c t u r i n g customers o f th e new Wyoming system were th e s our ce o f about 40 p e r c e n t o f th e w a s t e w a t e r s Somewhat s i m i l a r public f a c i l i t i e s R apid s. r e c e i v e d and t r e a t e d d a i l y . i n s t a n c e s o f g r e a t e r use o f new o r expanded seemed t o be in th e o f f i n g a t Both o f t h e s e c i t i e s lo c a litie s it D e t r o i t and Grand had pl an s t o j o i n w i t h n e i g h b o r i n g in t h e c o n s t r u c t i o n o f m e t r o p o l i t a n c o l l e c t i o n works. Interview s r e v e a l e d t h a t many o f located in the suburban a r c which ex te n ds around D e t r o i t ^ be a b l e to send t h e i r w a s t e w a t e r s late 1960s the m etalworking p la n ts into c o ll e c t i o n from the m e t r o p o l i t a n system proposed f o r that area. in w a s t e w a t e r s m i l l s and m e ta l w o r k in g e s t a b l i s h m e n t s as w e l l shoe m a n u f a c t u r i n g p l a n t located a t would p r o b a b l y sewers r a d i a t i n g ou t Also, i t appeared t h a t an expanded system planned f o r Rapids a r e a would be a b l e to t a k e and t r e a t m e n t in the th e Grand from s e v e r a l paper as th e l a r g e t a n n e r y and R oc kfo rd. The l o c a t i o n o f t h i s a r c , which ex te n ds from the s o u t h w e s t e r n to th e n o r t h e a s t e r n e x t r e m i t i e s o f the D e t r o i t St and ar d M e t r o p o l i t a n S t a t i s t i c a l A r e a , has been d e s c r i b e d by th e a u t h o r in u n r e p o r t e d manu­ s c r i p t s which d e s c r i b e l o c a t i o n p a t t e r n s o f p l a n t s w i t h i n s t u d i e d industries. 428 Out o f t h e seven communities v i s i t e d d u r i n g in te rv ie w s , only F l i n t d i d n o t e i t h e r have a t r e a t m e n t f a c i l i t y which then took In substantial amounts o f i n d u s t r i a l w a s te w a te rs o r have p l a n s f o r f a c i l i t i e s which would t a k e waters F lin t's in t h e f u t u r e . fa c ilitie s in g r e a t e r amounts o f The r e l a t i v e l y has been r e f e r r e d lim ited to is d i sc u s s e d from t h e s t a n d p o i n t o f t h e of regulatory p o lic ie s . P a rtic u la rly p o r t a t i o n equipment p l a n t s t o e m it located in d u s t r ia l waste­ in d u strial use o f in Cha pter V I I when Region IIIA incidence o f adverse e f f e c t s th e l a r g e ma chinery and t r a n s ­ in o r nea r F l i n t have been found i n o r d i n a t e l y hi g h p r o p o r t i o n s o f t h e i r d i s c h a r g e s d i r e c t l y in to p u b lic w aters. Consequently, re la tiv e ly l a r g e shares o f thes e kind s o f p l a n t s a t F l i n t have had t h e i r d i s c h a r g e s s u b j e c t to th e direct regulatory controls o f And, c o n v e r s e l y , re la tiv e ly the M ich ig an Water Resources Commission. small F l i n t have been a b l e to r e c e i v e a l l o c a t e d by f e d e r a l i n d i r e c t a s s i s t a n c e from s u b s i d i e s give e v id e n c e t h a t s e v e r a l c la s s ific a tio n s of in southern M ic hi ga n were p a r t i c i p a t i n g t r e n d which was underway in o t h e r for thes e p l a n t s a t and M ich ig an programs. The above cases manufacturing p la n ts proportions o f in the i n d u s t r i a l i z e d a r e a s o f the c o u n t r y i n c r e a s i n g shares o f m a n u f a c t u r in g d i s c h a r g e s t o be sent t o p u b l i c u tility sewers. But th e s e cases a l s o r e ve a l m a n u f a c t u r i n g p l a n t s were t a k i n g p a r t trend. For instance, m u n Icip al-in du strial in and b e n e f i t i n g kinds o f from t h i s t h e c o n s t r u c t i o n and s u b s i d i z a t i o n o f j o i n t fa c ilitie s a t B a t t l e C re e k , p r i m a r i l y b e n e f i t e d numerous paper m i l l s , plants, t h a t no t a l l and an e s t a b l i s h m e n t engaged Kalamazoo, and Monroe two c e r e a l s p ro c e s si ng in t h e m a n u f a c t u r e o f p h ar m a ce u t ic al s. k2S Th en , too, actual constructed increases fa c ilitie s In t h e in d u s tria l use o f Wyoming's newly were p r i m a r i l y due t o t h e e m i s s i o n o f w a s t e ­ w a t e r s from th e t o w n ' s m e t a l w o r k i n g e s t a b l i s h m e n t s . The proposed m ajo r e x p a n s io n and m o d e r n i z a t i o n o f t h e D e t r o i t m e t r o p o l i t a n t i e s a l s o promised t o t a k e in a d d i t i o n a l in d u strial w h ic h would come p r i m a r i l y from m e t a l w o r k i n g p l a n t s . fa c ili­ wastewaters In dication s were t h a t c o n s t r u c t i o n o f a r e a w i d e c o l l e c t i o n and t r e a t m e n t works t h e v i c i n i t y o f Grand Rapids would p e r m i t m e t a l w o r k i n g p l a n t s , m ills , and a s i n g l e charges to p u b lic leatherw orking u tility s e we rs . plant to s t a r t in pa pe r sen di n g t h e i r d i s ­ APPENDIX I ALTERNATIVE FORMULATIONS (SENSITIVITY ANALYSES) OF CHI-SQUARE TESTS *♦30 APPENDIX I ALTERNATIVE FORMULATIONS (S EN SI TI VI TY ANALYSES) OF CHI-SQUARE TESTS Purpose A tten tion is c a l l e d in Cha pte r IX t o th e f a c t t h a t t h e p o pu la ­ t i o n o f each o f th e f o u r c h i - s q u a r e t e s t s d e p i c t e d by T a b l e s 22 is not p e r f e c t l y s u i t e d f o r these t e s t s . provid ed o f t h e n a t u r e o f t h i s p o p u l a t i o n , required in i t s use , and the p r o b a b le An e x a m i n a t i o n the 19 t hr oug h is now i m p l i c i t assumption i m p l i c a t i o n s o f t h a t as sum pt ion. I m p e r f e c t i o n s a s s o c i a t e d w i t h t h e p o p u l a t i o n o f ^38 p l a n t s a r e firs t id en tifie d . assumption Then, an e x p l i c i t t h a t has been r e q u i r e d the f o u r o r i g i n a l is g i v e n o f th e im p lic it in o r d e r to use t h i s p o p u l a t i o n chi-square te s ts . be a s s o c i a t e d w i t h the use o f statement Possible lim ita tio n s in t h a t might th is population are conceptualized. These l i m i t a t i o n s a r e then made m a n i f e s t by e s t i m a t i n g t h e range o f p l a n t s w i t h i n t h e p o p u l a t i o n o f A38 p l a n t s which m ig h t not have been suited f o r purposes served by th e o r i g i n a l a r e ta ken i n t o account tests. in r e f o r m u l a t e d v e r s i o n s , o r a n a l y s e s , o f each c h i - s q u a r e t e s t . d e t e r m i n a t i o n about what e f f e c t , These e s t i m a t e s s e n s itiv ity These r e f o r m u l a t i o n s a l l o w f o r a i f a ny , th e e s t i m a t e d range o f lim ita ­ t i o n s might have had upon t h e r e s u l t s o f each t e s t which a r e p r e s e n t e d in Ch apter IX. **31 ^32 Im perfections A ll been ^38 p l a n t s in th e P o p u l a t i o n o f *>38 P l a n t s in t h e p o p u l a t i o n , issued t a x exemption c e r t i f i c a t e s , waters d i r e c t l y into p u b lic w ate rs. t h e i r wastewaters But u n l i k e a l l in f i x e d t h e 50 which had were known to d i s c h a r g e w a s t e ­ which had r e c e i v e d an e x e m p t i o n , no t a l l to t r e a t including of t h e 50 p l a n t s o f t h e ^38 p l a n t s were known fa c ilitie s which q u a l i f i e d exemption under t h e p r o v i s i o n s o f M i c h i g a n ' s p r o g ra m . Consequently, th e p o p u l a t i o n used in each o f t h e f o u r c h i - s q u a r e t e s t s fectly suited been g i v e n to t h e purpose served by th e s e t e s t s . in C ha pt e r IX . B rie fly t i o n o f whet he r o r not any r e a l restated, four s p e c ific pairs o f th e u n d e r l i n e d phrase w i t h i n it is this to a p p l y f o r and r e c e i v e exemptions between t h e p r o p o r t i o n s f o r and r e c e i v e d exempti ons im p o r t a n t to examine t h e meaning r e s t a t e m e n t o f p u rp o s e . . . . p rim a rily for In o r d e r in ac cor dan ce w i t h M i c h i g a n ' s program p r i v a t e e n t i t i e s must o p e r a t e "any d i s p o s a l t r e a t m e n t works th e d e t e r m i n a ­ impact subgroups. In the p r e s e n t c o n t e x t , of is no t p e r ­ T h i s purpose has involves differences e x is t o f m a n u f a c t u r i n g p l a n t s which had a p p l i e d w ithin it for t h e purpose o f o r e l i m i n a t i n g w a t e r p o l l u t i o n caused by i n d u s t r i a l system . . . reducing, w aste."' o r any c o n tro llin g A ll of the 50 p l a n t s observed t o have r e c e i v e d exem ptio ns w e r e , o f c o u r s e , p l a n t s which d i d o p e r a t e f a c i l i t i e s which q u a l i f i e d I t would have been d e s i r a b l e to have been a b l e f o r e x e m p ti o n s . to r e f e r to a po p u latio n in which e v e r y p l a n t was a l s o known to have o p e r a t e d f a c i l i t i e s q u alifie d f o r e x em p t i o n s . 'sec. I . ( a ) , sec. 7 . 7 9 3 ( 5 1 ) . U n fortunately, Act 2 2 2 , which such a d e s i r a b l e p o p u l a t i o n P u b l i c A ct s o f 19 66, Mic h. S tats. Anno t. **33 cou ld no t be a r r i v e d a t . I n f o r m a t i o n was no t a v a i l a b l e that indicated which o f M i c h i g a n ’ s m a n u f a c t u r i n g p l a n t s w i t h d i r e c t l y - c o n t r o l l e d charges ( b e s i d e s t h o s e which had a l r e a d y been e i t h e r an ex em pt io n) o p e r a t e d f a c i l i t i e s Lac king such i n f o r m a t i o n , lis t for which q u a l i f i e d d is­ issued o r de n ie d f o r an e x e m p t i o n . t h e **38 p l a n t s named on t h e commission s t a t u s 1968 were s e l e c t e d as t h e n e x t b e s t r e p r e s e n t a t i v e o f th e p o p u l a t io n . An E x p l i c i t Sta te me nt o f t h e I m p l i c i t Assumption An assumption has i m p l i c i t l y been made in o r d e r t o use the a f o r e s a i d **38 p l a n t s as t h e p o p u l a t i o n o f each c h i - s q u a r e t e s t . assumption a p p l i e s to the p ro p o rtio n al T h is d i s t r i b u t i o n among s t u d i e d impact subgroups o f t h e unknown number o f p l a n t s which d i d no t q u a l i f y f o r an e x e m p t i o n . As in t ro d u c e d above and d e t a i l e d b e lo w , such p l a n t s i n c l u d e th o s e w h ic h e i t h e r d i d not o p e r a t e w a s t e w a t e r t r e a t m e n t works or which o p e r a t e d works o f a kind which d i d not q u a l i t y f o r an e x e m p t i o n . T h i s a s s u m p t io n , then, m aintains th a t those p l a n t s which d i d not q u a l i f y f o r an exemption were p r o p o r t i o n a l l y d i s t r i b u t e d subgroups o f t h e f o u r t e s t s tio nal d istrib u tio n of a ll in a manner which among t h e e i g h t impact is s i m i l a r t o t h e p r o p o r ­ t h e 388 p l a n t s which had n o t r e c e i v e d an exempt i o n . Subsequent comments t r y assumption t o i d e n t i f y t h e de gr e e t o which t h i s is a r e p r e s e n t a t i o n o f th e a c t u a l d i s t r i b u t i o n o f p l a n t s among impact subgroups. These comments a l s o o f f e r judgments abo ut wheth er o r no t t h e v a l i d i t y o f t h e r e s u l t s i n d i c a t e d by each c h i - s q u a r e t e s t m ig h t be a f f e c t e d by t h e e x t e n t t o which t h e assumption does not 434 hold t r u e by f i r s t In a c t u a l i t y . thinking The d i s c u s s i o n o f t h e s e t o p i c s th rou gh th o s e c ir c u m s t a n c e s is f a c i l i t a t e d in which knowledge about t h e d i v e r g e n c e o f t h i s as sump tion from r e a l i t y would be most cause r e s u l t s o f s e n s i t i v i t y a n a l y s e s t o d i f f e r lik e ly to from r e s u l t s o f o r i g i n a l chi-square te s ts . The L i k e l i h o o d o f E f f e c t s From th e Assumption In certain diverge ra th e r c a llin g circumstances, t h e a fo r e m e n t i o n e d assumption c o u l d s u b s t a n t i a l l y from r e a l i t y w i t h o u t c h a l l e n g i n g , or in to qu estion, the v a l i d i t y o f the r e s u lt s o f a t th e c h i - s q u a r e t e s t s g i v e n a bo v e . I f only a r e l a t i v e l y small l e a s t some o f T h i s would be th e c a s e , instance, number' o f th e 388 p l a n t s which had not r e c e i v e d an exemption were found to not have even q u a l i f i e d exemption p r i o r for t o September o f I 969 . Suppose t h a t f o r an t h i s small number o f p l a n t s were not p r o p o r t i o n a l l y d i s t r i b u t e d among impact subgroups t h e manner s t a t e d by t h e a s s u m p t io n . these p la n ts w e re , single in th e e x tr e m e impact subgroup. which d i d not q u a l i f y th e group o f 85 p l a n t s w ithin Suppose, r a t h e r , that a ll in of Instance, concentrated w it h in only a Furthermore, suppose t h a t a l l o f these p la n ts f o r an exemption were known to be in cl ud e d w i t h i n referred t o by T a b l e 21 which were l o c a t e d t h e n o r th e r n m o s t f o u r wa te rs h ed regions. These c i r c u m s t a n c e s could e x i s t w i t h o u t c a u s in g the r e s u l t s o f a r e f o r m u l a t e d v e r s i o n o f ^Throughout t h i s s e c t i o n , no e s t i m a t e s a r e o f f e r e d w i t h r e g a rd to t h e number o f p l a n t s t h a t would c o n s t i t u t e e i t h e r a " r e l a t i v e l y small number" o r a " r e l a t i v e l y l a r g e number" o f p l a n t s which had not r e c e i v e d an exemption and d i d no t even q u a l i f y f o r an exemption p r i o r to September o f 1969. The f o r t h c o m in g s e n s i t i v i t y a n a l y s e s , however, a l l o w something t o be said, about t h e range o f such e s t i m a t e s . ^3 5 T a b l e 21 t o d i f f e r from t h e o r i g i n a l r e s u lts o f Table 21. th e s e c ir c u m st a n c e s would cause an i n c r e a s e chi-square s t a t i s t i c computed from d a t a To be s u r e , In th e magnitude o f th e in clu ded in th e r e f o r m u l a t e d version o f Table 21. But th e computed v a l u e o f th e c h i - s q u a r e s t a ­ t i s t i c m ight, instance, in t h i s v a lu e o f 10 .8 3 a t the freedom. .001 s till remain l e s s than t h e c r i t i c a l s ign ificance level w i t h one de gre e o f Both t h e r e f o r m u l a t e d v e r s i o n and t h e o r i g i n a l the t e s t shown by T a b l e 21 w o ul d , hy po t h e s i s to be ac ce pt e d a t the t h e n , cause th e a p p l i c a b l e n u l l .001 a l p h a l e v e l . Now c o n s i d e r a second s e t o f c i r c u m s t a n c e s . re la tiv e ly l a r g e number o f th e 388 p l a n t s no t det er mi ne d t o have not q u a l i f i e d ever, suppose t h a t a l l of th is q u a l i f y f o r an exemption were referred cause t h e v a l u e o f in cl ud e d w i t h i n Once a g a i n , instance, th e c h i - s q u a r e s t a t i s t i c in t h i s the no rth er nm os t f o u r th is hy po t h e s i s a t th e .001 a lp h a second i n s t a n c e would computed from d a t a in m a g n it u d e . second instance, be l a r g e enough t o exceed th e c r i t i c a l r e f o r m u l a t e d v e r s i o n o f T a b l e 21 w o ul d , therefo re, level includ ed The computed however, value o f 10.83. The lead t o r e j e c t i o n whereas th e o r i g i n a l v e r s i o n o f t h a t t a b l e had led t o the a c ce p t a n c e o f t h a t n u l l a t th e .001 how­ the group o f 85 p l a n t s located w i t h in As in t h e f i r s t v a lu e o f th e c h i - s q u a r e s t a t i s t i c o f the n u l l issued an exemption were f o r an ex em pt io n. in the r e f o r m u l a t e d v e r s i o n to be in cre as ed might w e l l Suppose t h a t a l a r g e r number o f p l a n t s which d i d not to by T a b l e 21 as being watershed r e g i o n s . version of hypotheses le v e l. The two h y p o t h e t i c a l chosen to r e f e r to o r ig in a l i n s t a n c e s g i v e n above have been p u r p o s e l y and r e f o r m u l a t e d v e r s i o n s o f t h e c h i - s q u a r e 436 t e s t g i v e n by T a b l e 2 1 . in C h a p t e r this of test T h i s c h o i c e has been made b e c a us e , as I X , among t h e f o u r c h i - s q u a r e t e s t s resulted in t h e l e a s t d i f f e r e n c e 1 0 . 8 3 and t h e computed v a l u e o f c h i the o r ig in a l indicated version o f between t h e c r i t i c a l value square. The reason f o r making a c h o i c e on t h i s basis w i l l become e v i d e n t as th e p o s s i b l e r e s u l t s o f a t h i r d and a f o u r t h s e t o f h y p o t h e s i z e d c i r c u m s t a n c e s a r e s e t f o r t h be lo w . It w ill o f c i r c u m s t a n c e s once a g a i n p e r t a i n to re la tiv e ly small instances number o f a r e l a t i v e l y o f exemption. t h a t t h e s e two s e ts in which e i t h e r a l a r g e number o f t h e 388 p l a n t s were known t o have n o t o p e r a t e d f a c i l i t i e s tific a te be noted Furthermore, a l l which q u a l i f i e d of for a cer­ these r e l a t i v e l y small o r l a r g e numbers o f p l a n t s a r e once a g a i n sup po sed ly found w i t h i n a s i n g l e impact subgroup o f a s i n g l e ever, th is referred In t h e s e two f i n a l in t h e t e s t for the o r i g i n a l shown by T a b l e 19- v e r s i o n o f t h e t e s t g i v e n by T a b l e puted v a l u e o f c h i As a t h i r d follo w ing . It w ill how­ 19 r e s u l t e d value o f that tests in t h e 1 0 . 8 3 and t h e com­ set o f hy p o th e tic al c i r c u m s t a n c e s , c o n s i d e r th e Suppose t h a t t h e same a f o r e m e n t i o n e d small the group o f p l a n t s r e f e r r e d no more th an 249 p e r s o n s . then have t o s u b t r a c t (2) is square. which d i d no t q u a l i f y f o r an exem pti on w e r e , a t t o be w i t h i n become e v i d e n t t h i s c h o i c e has been t h a t among t h e f o u r o r i g i n a l g r e a t e s t d i f f e r e n c e between t h e c r i t i c a l 438 p l a n t s , instances, impact subgroup has p u r p o s e l y been chosen to be one t h a t to th e b a s i s te s t. number o f p l a n t s the extreme, a l l t o by T a b l e found 19 which employed The r e f o r m u l a t e d v e r s i o n o f T a b l e 19 would t h i s number o f p l a n t s from {1 ) t h e 388 p l a n t s ob se rv ed not the p o p u la tio n o f t o have r e c e i v e d an **37 e x e m p ti o n , and ( 3 ) t h e 259 p l a n t s t h a t employed 250 persons o r le s s which were obser ved no t to have r e c e i v e d an e x e m p t i o n . reform ulated Based upon t h e v a lu e s f o r th e p o p u l a t i o n and obser ved f r e q u e n c i e s , a new s e t o f expected v a l u e s would a l s o have t o be a r r i v e d a t . square s t a t i s t i c revised 2 x 2 computed from t h e obser ved and expe cted v a l u e s o f can be s a id w i t h c e r t a i n t y , computed from t h i s than t h e c r i t i c a l however, t h a t the c h i-s q u a r e s t a t i s t i c reform ulated versio n o f Table value o f 10.83. This version o f th is t a b le . la tte r 19 would n o t be le s s statement is based upon th e assumed r e s u l t s o f th e s e n s i t i v i t y a n a l y s i s conducted t o th e f i r s t this c o n t i n g e n c y t a b l e would n e c e s s a r i l y be o f s m a l t e r magni­ tude than t h e s t a t i s t i c computed from th e o r i g i n a l It The c h i - hypothetical ment f o l l o w s from th e f a c t s i t u a t i o n g i v e n above . that in response The f o r e g o i n g th e d i f f e r e n c e between th e c r i t i c a l value o f 1 0 .8 3 and the c h i - s q u a r e s t a t i s t i c T a b l e 21 is le s s than t h e d i f f e r e n c e between th e same c r i t i c a l and the c h i - s q u a r e s t a t i s t i c state­ computed from the o r i g i n a l computed from t h e o r i g i n a l value data o f T a b l e 19. Consider, fin a lly , a fourth hypothetical t h a t t h e same a f o r e m e n ti o n e d situ atio n . Suppose l a r g e number o f p l a n t s which d i d not q u a l i f y f o r an exemption w e r e , a t th e e x t r e m e , a l l known t o f a l l the group o f p l a n t s which employed no more than 250 p e r s on s . r e f o r m u l a t e d v e r s i o n o f th e 2 x 2 would t h e r e b y w ithin The c o n t i n g e n c y t a b l e g i v e n by T a b l e 19 i n c l u d e a new s e t o f ob served and e x pec te d f r e q u e n c i e s . The c h i - s q u a r e s t a t i s t i c computed from t h i s revised 2 x 2 contingency t a b l e would n e c e s s a r i l y be o f s m a l l e r ma gnitude than t h e s t a t i s t i c computed from the o r i g i n a l version o f t h is tab le. Furthermore, the 438 s t a t i s t i c computed from t h i s new t a b l e would a l s o n e c e s s a r i l y be o f s m a l l e r m a gn itu de than th e s t a t i s t i c computed from t h e 2 x 2 contingency t a b l e o f t h e p r e v i o u s s i t u a t i o n which made a d ju s t m e n ts f o r a s m a l l e r number o f p l a n t s . But th e s t a t i s t i c tab le o f th is fourth o f 10.83* Thus, computed from th e new c o n t i n g e n c y I n t a n c e mig ht n o t be s m a l l e r than t h e c r i t i c a l t h e r e s u l t s o f t h e s e n s i t i v i t y a n a l y s i s conducted w i t h respect to t h is f i n a l set o f c i r c u m s t a n c e s might be the same as the r e s u l t s o f bo th t h e o r i g i n a l t e s t shown by T a b l e 19 and th e s e n s i t i v i t y a n a l y s i s conducted w i t h r e s p e c t t o the t h i r d Both t h e o r i g i n a l s i t u a t i o n g i v e n above. and r e f o r m u l a t e d v e r s i o n s o f t h i s o t h e r w o rd s , end up w i t h a r e j e c t i o n o f th e n u l l to Table 19. of differences chi value te s t could, in hypothesis a p p lic a b le T h i s c o n c l u s i o n a g a i n f o l l o w s from th e r e l a t i v e magnitude reported in Chapter IX between t h e computed v a l u e s o f square f o r T a b l e s 19 and 21 and t h e c r i t i c a l The f o u r s i t u a t i o n s referred value o f t o above r e p r e s e n t 10 .83 * th e p o s s i b l e extremes o f s e n s i t i v i t y a n a l y s e s t h a t might be e nco un ter ed because t h e a f o r e m e n t i o n e d assumption has had t o be made about th e p o p u l a t i o n o f T a b l e s 19 t hr oug h 2 2 . c l u s i o n s can be c i t e d . From the se extreme instances, In c e r t a i n c i r c u m s t a n c e s , some g e n e r a l con­ t h e assumption coul d d i v e r g e r a t h e r s u b s t a n t i a l l y from r e a l i t y w i t h o u t a f f e c t i n g of at l e a s t some o f the f o u r o r i g i n a l t h e case chi-square te s ts . the r e s u l t s T h is would be i f one o r both o f two s i t u a t i o n s were found to e x i s t . such s i t u a t i o n would be when o n l y a r e l a t i v e l y small p l a n t s which had no t been an e x e m p t i o n . One number o f th e 388 issued an exemption d i d not even q u a l i t y f o r A no th e r such s i t u a t i o n would a p p l y when a g r e a t d i f f e r e n c e i 439 were to e x i s t between the c r i t i c a l v a lu e s o f c h i - s q u a r e s t a t i s t i c s value o f 1 0 .8 3 and t h e computed from th e o r i g i n a l tests. E s t i m a t e s o f t h e Range o f P l a n t s Which Did Not Q u a l i f y f o r an Exemption The f o u r e x tre m e h y p o t h e t i c a l have o n l y g e n e r a l l y r e f e r r e d s i t u a t i o n s c o n c e p t u a l i z e d above to numbers o f p l a n t s which m ig h t not have o p e r a t e d wa s t e w a t e r c o n t r o l works which q u a l i f i e d under M i c h i g a n ' s program. f o r a t a x exemption E s t i m a t e s a r e now made o f some r e a l values o f th e number o f such p l a n t s . B ef o re p r o c e e d i n g , mated r e a l i t needs t o be r e c o g n i z e d numbers o f p l a n t s have been incorporated a n a l y s e s , o r r e f o r m u l a t e d v e r s i o n s , o f th e o r i g i n a l Two such r e f o r m u l a t i o n s o f each o f have been conducted. th e f o u r o r i g i n a l that into s e n s i t i v i t y chi-squ are The f i r s t o f each o f th e s e f o u r p a i r s o f to have no t q u a l i f i e d Impact subgroups. f o r an exemption w i t h i n r e fo rm u ­ in th e o r i g i n a l reform ulations. from the f i r s t T h i s second round o f a d j u s t m e n t s maximum number o f p l a n t s e s t i m a t e d e xem ptio n. the re le v a n t The second round o f s e n s i t i v i t y a n a l y s e s then a d j u s t s th e observed f r e q u e n c i e s r e s u l t a n t round o f is based upon the to have no t q u a l i f i e d f o r an The second s e t o f s e n s i t i v i t y a n a l y s e s thus r e p r e s e n t s the end r e s u l t o f a t w o - s t a g e c u m u l a t i v e r e v i s i o n in the f o u r chi-square te s ts . Table various tests These a d ju s t m e n t s a r e based upon th e minimum numbers o f p l a n t s estimated o rig in al tests. chi-square l a t i o n s makes a d ju s tm e n t s to observed f r e q u e n c i e s g i v e n tests. th e s e e s t i ­ 1-1 r e p o r t s t h e e s t i m a t e d minimum number o f p l a n t s w i t h i n impact subgroups t h a t were r e f e r r e d t o when c o m p i l i n g t h e f i r s t 440 TABLE 1 - 1 . — Minimum number o f e s t a b l i s h m e n t s on commission s t a t u s l i s t f o r 1968 t h a t wer e i n c o r p o r a t e d i n t o r e f o r m u l a t i o n s o f o r i g i n a l c h i - s q u a r e t e s t s , by impact subgroups o f each te s t.3 Subgroups o f O r i g i n a l Table 19 T a b l e 20 Tests T a b l e 22 T a b l e 21 Types o f P l a n t s o t o which IA Reform ulations Refer — c CM o < — O 1/1 Q . i~ c ■M Z3 a) o a: <_> o c 1- 3 *-> o 0) o E c c. o <0 01 in C c V. Ul 4) C -e o 4J — 3 O Ol 4J u i cd 0) 1 •— U J3 4) ra ■M t(0 3 3 O A d ju s t m e n t s Made t o F r e q u e n c i e s Observed t o Have Received an Exemption P l a n t s w i t h an exemption pending .................................. 2 5 5 2 7 0 3 4 A d ju s t m e n ts Made to F r e q u e n c i e s Observed Hot t o Have Received an Exemption P l a n t s d e n i e d an e xem ption ............................. 3 1 1 3 4 0 3 1 P lan ts w i t h discharges given a C r a t i n g . . 0 5 4 1 5 0 3 2 3 6 5 4 9 0 6 3 . To ta 1 0 From sourc es l i s t e d at th e end o f Appendix E. M iI round o f r e f o r m u l a t e d v e r s i o n s o f T a b l e s 19 through 2 2 . ings t o t h i s table indicate that t h e s e minimum e s t i m a t e s not o n l y a p p l y t o th e number o f p l a n t s on th e commission s t a t u s no t q u a l i f y f o r an e x e m p t i o n . The row head­ Rather, lis t for 1968 which d i d t h e s e headings show t h a t T a b l e 1-1 a l s o r e f e r s t o p l a n t s which had t a x exemptions pending as o f September i , 1969. in t h e f i r s t round o f s e n s i t i v i t y a n a l y s e s , these p la n ts w ith pending exemptions have been used to a d j u s t up ward, o r frequencies o f p la n ts in v a r i o u s t o have r e c e i v e d an e x e m p t i o n . increase, the impact subgroups which were observed On t h e o t h e r hand, th e f r e q u e n c i e s o f p l a n t s which were observed no t to have r e c e iv e d an exemption have been a d j u s t e d downward, o r d e c r e a s e d , number o f p l a n t s w i t h i n by r e f e r r i n g p a rtic u la r t o e s t i m a t e s o f th e subgroups which d i d not q u a l i f y for an e xem pti on. The top row o f T a b l e i- 1 refers to th e seven e s t a b l i s h m e n t s w i t h pending ex em pt io ns . This which a r e included w i t h i n th e e i g h t to Tables 19 thr ough 2 2 . Each o f th e f r e q u e n c i e s o f p l a n t s w i t h i n this row i t e m i z e s the number o f t h e s e p l a n t s impact subgroups t h a t a r e r e l e v a n t row were added t o th e f r e q u e n c i e s f o r th e same r e s p e c t i v e impact subgroups which were obser ved to have r e c e i v e d an exemption p r i o r t o September o f a ll 1969. T h i s process o f a d d i t i o n seven p l a n t s w i t h pending exemptions would have s u b s e q u e n tl y received the exemptions t h e y had a p p l i e d f o r . p l a n t s a r e assumed t o be s u i t e d f o r been i m p l i c i t l y assumes t h a t in c l u d e d ) inclusion Thus, a l l (an d, in th e top rows o f both th e f i r s t reform ulated c h i-s q u a re t e s ts . seven o f thes e therefo re, have and second rounds o f kkz The bottom row o f T a b l e I-! refers to a t o t a l o f nine p la n t s . These p l a n t s c o u l d , w i t h a g r e a t amount o f c e r t a i n t y , as not b e in g q u a l i f i e d t o r e c e i v e an e x e m p t i o n . be i d e n t i f i e d Four o f th e s e p l a n t s di s c h a r g e d w a s t e w a t e r s t h a t were a s sig ned a C a d e q u a c y - o f - c o n t r o l rating. The o t h e r f i v e had a p p l i e d o f 1969 bu t t h e i r f o r an exemption p r i o r t o September r equ es t f o r an exemption had been d e n i e d . Because o f th e f o l l o w i n g reasons, most, i f no t a l l , a f o r e m e n t i o n e d n i n e p l a n t s p r o b a b ly d i d not q u a l i f y o f th e f o r an e xem pti on. P l a n t s w i t h d i s c h a r g e s a s sig ned a C r a t i n g were known t o have not p r o ­ v id e d any c o n t r o l o f t h e i r wastewaters in C ha pt e r VI and Appendix E, provid ed no c o n t r o l gi v e n l e v e l of o f control th is in e a r l y 1 9 6 8 . rating implies t h e i r wastewaters, As mentioned that establishm ents and t h a t th e need f o r any had not y e t been d e t e r m i n e d by f i e l d e n g i n e e r s on t h e s t a f f o f t h e M ic h ig a n Water Resources Commission. ratings thus p r o v i d e an e x c e l l e n t b a s i s f o r s t a t i n g p l a n t s d i d not o p e r a t e any f a c i l i t i e s , f o r an ex em pt io n. and , that These C th e f o u r t h e r e f o r e , d i d not q u a l i f y With a somewhat l e s s e r de gr ee o f c e r t a i n t y , th e f i v e p l a n t s which had been de ni ed a c e r t i f i c a t e o f exemption can a l s o be co ns id ere d as not having o p e r a t e d exempt i o n . To be s u r e , th e s e f i v e of control o f t h e i r wastewaters or f o r an exemption in t h e f i r s t fa c ilitie s place. which q u a l i f i e d f o r an p l a n t s p r o b a b l y p r o v id e d some k in d e l s e th e y would not have a p p l i e d But by having been d e n i e d a c e r t i f i c a t e o f exemption t h e s e p l a n t s a ppe ar to have o p e r a t e d one o f the f o l l o w i n g kind s o f f a c i l i t i e s . These f a c i l i t i e s o f t h e type t h a t were no t used Mp r i m a r i 1y f o r cou ld have been th e purpose o f r e d u c i n g , c o n t r o l l i n g o r e l i m i n a t i n g w a t e r p o l l u t i o n caused by ^3 in d u strial w a s t e . O r t h e y c o u l d have been f a c i l i t i e s the r e c o v e r y o f m a t e r i a l s o r t h e c r e a t i o n o f b y - p r o d u c t s w i t h economic v a l u e s t h a t exceeded t h a t p o r t i o n o f fa c ilitie s w h ic h a l l o w e d the t o t a l acq u is itio n w h ic h c o u l d have been exempted from p r o p e r t y , costs o f s a l e s , o r use taxes. The second s e t o f s e n s i t i v i t y a n a l y s e s o n l y made downward revisions in t h e 372 p l a n t s in c l u d e d wh ich had n o t r e c e i v e d an e x e m p t i o n . s u b t r a c t i n g an e s t i m a t e d set a s o b s e r v a t i o n s These d e c r e a s e s w e r e made by 50 p l a n t s which d i d n o t q u a l i f y exemption from t h e s e 372 p l a n t s . tiv e , in t h e f i r s t T h i s maximum a d d i t i o n a l , o r cumula­ e s t i m a t e was n o t , however, d i s t r i b u t e d among a l l subgroups. No i n f o r m a t i o n about t h e p a t t e r n indicated that f o r an was a v a i l a b l e this d is tr ib u tio n in t h e f o r e g o i n g h y p o t h e t i c a l e igh t impact upon wh ich to base judgments should t a k e . s itu a tio n s , 2 I n s t e a d , as t h i s maximum e s t i m a t e o f 50 p l a n t s was s u b t r a c t e d o n l y from t h e f r e q u e n c y o f plants w ith in a s ing le impact subgroup o f each t e s t . these subgroups was done so as to tis tic s th a t resu lted The c h o i c e o f lower t h e computed c h i - s q u a r e s t a ­ from t h e seco nd- ro un d a d j u s t m e n t s t o T a b l e s and 20 and t o ra i se t h e computed s t a t i s t i c s 19 from t h e second-round a d j u s t m e n t s t o T a b l e s 21 and 2 2 . The f o l l o w i n g at l o g i c and p r o c e d u r e s were c o n s i d e r e d when a r r i v i n g th e maximum e s t i m a t e ita lic s o f 50 a d d i t i o n a l e s t a b l i s h m e n t s which d i d not ^This q u o t a t i o n i s from A c t 2 2 2 , P u b l i c A ct s o f 1 9 66 , w i t h p r o v id e d by t h e a u t h o r . 2 T h e r e is no reason t o e x p e c t , however, t h a t t h i s d i s t r i b u t i o n would not p r o p o r t i o n a l l y a l l o c a t e the e s t i m a t e d 50 p l a n t s among the e i g h t d i f f e r e n t impact subgroups t h a t have been in cl u d e d in t h e c h i square a n a l y s e s . q u a l i f y f o r an ex em pt io n. I n f o r m a t i o n c o l l e c t e d about t h e t a x exemption program r e v e a l e d t h a t 55 m a n u f a c t u r i n g p l a n t s t h e commission s t a t u s for c e rtific a te . lis t 1968 had a p p l i e d f o r a t a x exemption F i v e o f th e s e 55 p l a n t s , o r 9.1 denied a c e r t i f i c a t e . include d on percent, had been The assumption was made t h a t a l l o f t h e 372 p l a n t s t h a t were observed not t o have r e c e iv e d an e x e m p t i o n ' o p e r a t e d some t y p e o f w a t e r p o l l u t i o n c o n t r o l o t h e r words, m a i n t a i n e d t h a t a l l the y so d e s i r e d , a p p l i e d a c tu a lly applied, e xem pti on. page. If If a ll in if o f thes e p l a n t s had some would no doubt have been d e n i e d an such d e n i a l s have been c i t e d on th e p r e v io u s t h e a fo r e m e n t i o n e d 9-1 p e r c e n t o f thes e p l a n t s had been denied a c e r t i f i c a t e o f e x e m pt io n, then some 3^ p l a n t s would have no t q u alified f o r an ex emp tion . situatio n in th e second round o f r e f o r m u l a t i o n s , For th e purpose o f d e p i c t i n g p l a n t s was in cre as ed to 50 p l a n t s . work w i t h T h i s as su m p tio n, o f th e s e 372 p l a n t s cou ld have, f o r an ex em pt io n. however, Reasons f o r fa c ilitie s . th e extreme t h i s e s t i m a t e o f 3^ The number 50 was a l s o easy to in the com puta tion o f c h i - s q u a r e s t a t i s t i c s from these r e f o r m u l a t ions. The R e s u lt s o f S e n s i t i v i t y Analyses R e s u l t s o f th e f i r s t and second rounds o f s e n s i t i v i t y a n a ly s e s a r e g i v e n below. results o f These r e s u l t s a r e r e p o r t e d the o r i g i n a l in the same manner as t e s t s have been pr es en ted in Chapter IX. The 372 p l a n t s hereby r e f e r r e d to were observed not to have re c e iv e d an exemption a f t e r th e f i r s t - r o u n d a d ju s t m e n t s had been made to th e o r i g i n a l c h i - s q u a r e t e s t s . 445 T a b l e 19 C ritic a l value Table 20 T a b l e 21 T a b l e 22 10.8 3 1 0 .8 3 10 . 8 3 10.83. 47-^0 24.79 2.96 1 .1 9 Minimum e s t i m a t e s 53.52 29.46 4.85 1. 56 Maximum e s t i m a t e s 41 .27 20.54 7-05 6.25 Computed v a l u e s : O rig inal tests R e s u lt s o f both t h e f i r s t and second rounds o f not change th e r e s u l t s o f o r i g i n a l c ritic a l value o f 6 .6 4 a t the th e computed v a l u e o f 7 - 0 5 f o r T h e re fo re , a t the .01 a lp h a .01 s e n s i t i v i t y analyses did chi-square te s ts . However, level o f s ig n ific a n c e is exceeded by th e second-round a d ju s t m e n t s level T a b l e 21 would have been r e j e c t e d . the n u ll the to Table 21. hypothesis a p p l i c a b l e to APPENDIX J SELECTED BACKGROUND INFORMATION REFERRED TO IN CHAPTER XI APPENDIX J SELECTED BACKGROUND INFORMATION REFERRED TO IN CHAPTER XI I n t r o d u c t ion To p l a c e c e r t a i n c o n c l u s i o n s been made in C ha pt e r XI into p e r s p e c tiv e , t o background inform ation in un pu bl is he d m a n u s c r i p t s ) ab ou t t h e t o p i c s r e f e r e n c e has (o r ig in a lly w ritte n in c l u d e d in t h i s a p p e n d i x . The Impo rta nce o f M a n u f a c t u r i n g t o M i c h i g a n ' s Economy S e v e r a l d i f f e r e n t economic th e f a c t t h a t the manufacturing s e cto r M i c h i g a n ' s economy. concluded t h a t From a r e v i e w o f is o f e x t r e m e these impo rta nce to in d icato rs, i t must be upon a s e c t o r segment o f t h a t economy. Hazard has e s t i m a t e d , in i 9 6 0 a l l can be used to d e p i c t t h i s s tu d y examines economic e f f e c t s which comprises a v i t a l through his in fere n tia l approach, that com mo dity-producing s e c t o r s o f t h e s t a t e had a combined p o s i t i v e n e t b a la n c e S I.5 b illio n .^ ever, in dicators If it ( v a l u e o f shipments le s s v a l u e o f had no t been f o r r e c e ip t s ) worth the m anufacturing s e c t o r , t h i s n e t t r a d e b a l a n c e would have been a n e g a t i v e on e. how­ For t h e ' j o h n L. H a z a r d , M i c h i g a n ' s Commerce and Commercial P o l i c y Study ( E a s t La ns in g: M ic hi ga n S t a t e U n i v e r s i t y , Gra dua te School o f Business A d m i n i s t r a t i o n , D i v i s i o n o f R e s e a r ch , I n s t i t u t e f o r I n t e r ­ n a t i o n a l Business Management S t u d i e s , I 965 ) . M a t e r i a l s in t h i s appendix a r e based upon pages 16 t hr ou g h 19 o f H a z a r d ' s wo rk. kkl 1 448 manufacturing s e cto r alone created $ 6 .8 b i l l i o n o f the t o t a l b i l l i o n w o rt h o f n e t shipments beyond th e s t a t e ' s s e c t o r accounted f o r o n l y $ 2 . 9 b i l l i o n o f net re c e ip ts during that y e ar. have r e v e a l e d t h a t trad e balance economy. o f the t o t a l surplus) in t h e i r e n t i r e t y , o f $3.9 b i l l i o n a ll to the s t a t e ' s o t h e r com m odit y- pr od uci ng sec ­ (or c a p it a l d e fic it) i n d i c a t o r s a r e a v a i l a b l e f o r a s i n g l e y e a r t o show imp ortance o f M i c h i g a n ' s m a n u f a c t u r i n g s e c t o r . model o f t h e s t a t e ' s found t h a t Hazard's estim ates in I 9 6 0 . Thre e o t h e r the of $5.6 b i l l i o n Stated o th e rw is e , t o r s accounted f o r a n e g a t i v e n e t t r a d e b a l a n c e o f $ 2 . 5 b i l 1 ion But t h i s in I 9 6 0 m a n u f a c t u r i n g a c t i v i t y added a p o s i t i v e n e t (or ca p ita l Taken borders. o f $7.0 An e c o n o m e tr ic economy deve lope d a t t h e U n i v e r s i t y o f M ich ig an In 1963 t h e m a n u f a c t u r i n g s e c t o r c o n t r i b u t e d 44 p e r c e n t o f the Gross S t a t e P r o d u c t , employed 33 p e r c e n t o f th e s t a t e ' s l a b o r f o r c e , and c r e a t e d 34 p e r c e n t o f t h e per s on a l total income earned in th e s t a t e . ^ The Importance o f S e p a r a t e I n d u s t r i e s and o f Broad I n d u s t r i a l C a t e g o r i e s Table J - l d i s a g g r e g a t e s two o f t h e a f o r e m e n t i o n e d t h e n e t t r a d e and employment i n d u s t r i e s and broad ta b le only re fe rs i n d i c a t o r s — to t h e l e v e l in dustrial c a t e g o r i e s used to those m a n u f a c t u r i n g about 2 0 , 0 0 0 persons o r more in March o f in d icato rs— o f the separate in t h i s study. T h is i n d u s t r i e s which employed 1968. For each o f th e s e ^ U n i v e r s i t y o f M i c h i g a n , Research Seminar in Q u a n t i t a t i v e Economics, Econo metr ic Model o f M i c h i g a n , S t a t e Resources P la n n in g Program, T e c h n i c a l Report No. 3 ( L a n s i n g : M ic h i g a n Department o f Commerce, 1 9 6 6 ) , pp. 4 2 , 4 8 , and 51 . TABLE. J - l . — R e la tiv e economic im p o rta n ce o f m a jo r w a te r- u s in g m a n u fa c tu rin g SIC Leading I n d u s tr ie s W ith in Broad C a te g o rie s Employment in March 1968“ Each In d u s try as a P e rce n t o f T o ta l M fg. Worlt Force in d u s t r ie s Net Trade in I960 ( in S I , 0 0 0 's ) c Shipm ents R e c e ip ts in H ic h ig a n . P e rc e n t o f T o ta l Net Trade by A l l M a n u fa c tu rin g In d u s tr ie s * 1 P e t. Shipm ents P e t. R e c e ip ts M inor Water Users 27 25 P r in t in g £ p u b lis h in g F u r n itu r e T o ta ld 79.531 22.171 2.6% 1.9% S 1)9,1)10 62.206 5-«i4 $ 1)9,1)10 51 ,59 5 1*6.815 27 .98 0 2*1,663 19,670 4 .5 * l) . I 2.1) 2 .2 1.7 s 105,500 1)1,170 177,662 15-54 S 3 98,105 176,387 133.873 97 ,20 6 1)6,909 31).84 15.1* 11-7 8 .5 li. l $5,369,31)8 1.267,811 873.751) 7 6 . iii $ 6 ,6 3 7 ,1 5 9 51 ,2 9 5 .6 3 5 9 7 -1 * A A .14 1.11)3.983 100.04 $ 6 .8 3 3 ,2 3 9 $ 2 ,9 3 5 ,3 9 2 1 0 0 .0 * 100.04 S <>.64 133.925 0 .7 4 $ 6 10,766 s 1)20,1)88 0 .7 4 2 0 .8 4 W a te r-U sin g N o n d urables 20 28 26 30 32 Food Chem icals Paper Rubber £ p la s . , ncc S to n e , c la y , £ g la s s T o t a le l< ).3% 1 .5 * 0 .6 11,6 2 .7 339,1)53 80 .15 6 11)6.670 $ 81)0,097 2 .I* 2 8 .6 4 W a te r-U sin q D u ra b le s 37 35 31) 33 36 T ra n s p o rt, equipm ent N o n -e le c . m a ch in e ry F a b ric a te d m e ta ls P rim a ry m e ta ls E le c t r ic a l m ach in e ry T o ta l9 T o t a l, E n tir e M fg. S e cto r*1 aFrom T a b le 6 . 7 8 .5 * 18.6 s NAf 3 16,815 NA 330.098 10.84 NA NA 11.2 ^ P e rce n ta g e fig u r e s c a lc u la te d by th e a u th o r , CFrom H azard, E x h ib it I - 5 , p . IS . ^Employment t o t a ls f o r th e e n t ir e c a te g o ry . in d u s t r y , f o r w h ich f ig u r e s a re n o t a v a ila b le . Net tra d e t o t a ls f o r th e e n t ir e c a te g o ry e x c e p t f o r th e ordnance £ Employment t o t a l s f o r th e e n t ir e c a te g o ry . Net tra d e t o t a ls f o r th e e n t ir e c a te g o ry e x c e p t f o r th e p e tro le u m and le a th e r in d u s t r ie s , f o r w h ich f ig u r e s a re n o t a v a ila b le . Net tra d e fig u r e s n o t a v a ila b le f o r th e p rim a ry m e ta ls in d u s t r y . ^Employment t o t a ls f o r th e e n t ir e c a te g o r y . m e ta ls in d u s tr y , th e Net tr a d e t o t a ls f o r th e e n t ir e c a te g o ry e x c e p t f o r th e p rim a ry ^Employment t o t a ls f o r th e e n t ir e m a n u fa c tu rin g s e c to r . Net tr a d e t o t a ls f o r th e e n t ir e s e c to r e x c e p t f o r in d u s tr ie s named in th e above n o te s and f o r th e to b a cco and lum ber in d u s t r ie s . 450 separate i n d u s t r i e s and f o r t h e e n t i r e c a t e g o r i e s o f table reports i n f o r m a t i o n about th e t o t a i and about t h e t o t a l The s a l i e n t t h r e e broad employment in March o f 1968 in I 9 6 0 . ' f e a t u r e s o f T a b l e J-1 a r e as f o l l o w s . Among t h e categories, it is q u i t e e v i d e n t Using D ur ab les category, is o f most economic p a rtic u la r a tten tio n th e v a l u e o f n e t shipments o r n e t r e c e i p t s industrial level o f a n a ly s is . in dustries, that th e W a t e r - importance a t th e s t a t e Hence, t h e f o l l o w i n g synopsis o f f i n d i n g s pays to th e c a t e g o r y and upon c e r t a i n in ci de nc e o f s t u d i e d e f f e c t s upon t h i s industries w ith in it. In March o f 1968, t h i s e n t i r e c a t e g o r y employed about t h r e e - f o u r t h s o f the t o t a l work f o r c e in m a n u f a c t u r i n g . In I 9 6 0 , net v a l u e o f shipments t h a t r e s u l t e d the s t a t e . it state c r e a t e d 97 p e rc en t o f the from m a n u f a c t u r in g a c t i v i t y in Yet t h e W a t e r- U s in g Du rables c a t e g o r y accounted f o r o n l y 44 p e r c e n t o f t h e combined v a l u e o f n e t r e c e i p t s t h a t were a t t r i b u t e d to a l l those m a n u f a c t u r i n g industries included in the study by Haza rd. T a b l e J - l r e f e r s to a l l o f the s e p a r a t e m a n u f a c t u r in g indus­ t r i e s t h a t were includ ed in th e study by Hazard which had a p o s i t i v e ne t v a l u e o f s h ip m e n t s . The t a b l e does n o t , however, r e f e r t o c e r t a i n i n d u s t r i e s w i t h i n each c a t e g o r y which were e s t i m a t e d t o have had a p o s i t iv e net vtue o f r e c e i p t s . These i n d u s t r i e s i n c l u d e th e t e x t i l e s , p r e c i s i o n equ ipment, and m i s c e l l a n e o u s m a n u f a c t u r e r s i n d u s t r i e s . The t o t a l v a l u e s o f n e t r e c e i p t s i n d i c a t e d f o r each c a t e g o r y and f o r t h e e n t i r e m a n u f a c t u r i n g s e c t o r do, however, in c l u d e the v a l u e o f n e t r e c e i p t s d e t e r m in e d f o r a l l o f th e s e p a r a t e i n d u s t r i e s d e a l t w i t h in H azard's study. The t o t a l v a lu e s f o r th e t h r e e broad c a t e g o r i e s do not in c l u d e v a l u e s f o r f o u r i n d u s t r i e s which were no t i n c l u d e d in H a z a r d ' s i n f e r e n t i a l approac h. Such i n d u s t r i e s in c l u d e th e o r d n a n c e , pe tr ol e um r e f i n i n g , l e a t h e r , and p r im a r y m e ta l s i n d u s t r i e s . F u r t h e r m o r e , the t o t a l v a l u e o f n e t r e c e i p t s f o r the e n t i r e m a n u f a c t u r in g s e c t o r does not in c l u d e v a l u e s f o r t h e tobacco and lumber i n d u s t r i e s f o r t h e y , t o o , were not d e a l t w i t h in H a z a r d ' s s tu d y . The t o t a l employment f i g u r e r e p o r t e d by T a b l e J - l f o r t h e e n t i r e m a n u f a c t u r i n g s e c t o r is not t h e summation o f t o t a l employment w i t h i n the t h r e e broad c a t e g o r i e s . T h is is because th e t oba cc o, a p p a r e l , and lumber i n d u s t r i e s have not been included in any o f th e t h r e e broad c a t e g o r i e s . j 451 t Both In terms o f employment and o f p o s i t i v e n e t t r a d e b a l a n c e s , th e t r a n s p o r t a t i o n equipment i n d u s t r y ranks f i r s t and t h e n o n - e l e c t r i c a l machinery i n d u s t r y ranks second economy. in economic importance to M i c h i g a n ' s These two d u r a b l e goods i n d u s t r i e s a l o n e c r e a t e d $ 6 . 6 b i l l i o n o f th e $ 6 . 8 b i l l i o n w o rt h o f n e t shipments from t h e manufac­ tu rin g sector in I 9 6 0 . thes e two i n d u s t r i e s F u rt h e r m o r e , t h e combined employment o f j u s t In March o f 1968 made up j u s t about o n e - h a l f o f the s t a t e ' s e n t i r e m a n u f a c t u r in g work f o r c e . Compared t o the t r a n s p o r t a t i o n equipment and n o n - e l e c t r i c a l machinery i n d u s t r i e s , t h e o t h e r m a n u f a c t u r in g as bein g c o n s i d e r a b l y le ss i n d u s t r i e s must be ranked im p o rt a n t to th e economy o f M i c h i g a n . f a b r i c a t e d m e ta l s I n d u s t r y employed j u s t over o n e - t e n t h o f a l l f a c t u r i n g workers In March o f 1968. s urp lu s o f th e s t a t e in I 9 6 0 . j u s t under o n e - t e n t h o f a l l U n f o r t u n a t e l y , no d a t a r e c e i p t s from t h i s Among t h e g o ry , But m a n u f a c tu r in g worke rs industry in March o f 1968. in I 9 6 0 . * the W a t e r - U s in g Nondurables c a t e ­ th e food pr oc es sin g and c he m ic a ls The paper i n d u s t r y employed Is a v a i l a b l e on the v a l u e o f shipments and i n d u s t r i e s stand o u t as the Of these two i n d u s t r i e s , however, o n l y th e c he m ic a ls in d u s t r y was a b l e to c r e a t e a r e l a t i v e l y small I960. manu­ I t di d no t add t o th e c a p i t a l The p r im a r y m e t a l s Industries w ith in g r e a t e r emp loye rs. The in d u s try — the t h ir d Wa ter-U sing Nondurables c a t e g o r y n e t t r a d e s u r p lu s l a r g e s t employer w i t h i n in 19 6 8 - - c o n s t i t u t e s in the th e o n l y o t h e r *The p r im a r y m e ta l s i n d u s t r y was grouped In th e study by Hazard In t o a c a t e g o r y which a l s o included t h e m e t a l l i c m ini ng i n d u s t r y . The i n f e r e n t i a l approach e s t i m a t e d t h a t t h i s combined c a t e g o r y had a n e t v a lu e o f r e c e i p t s which amounted to $812 m i l l i o n in I 9 6 0 . b5Z I n d u s t r y w i t h i n th e c a t e g o r y which had a v a l u e o f which exceeded t h e v a l u e o f is q u i t e s i m i l a r receip ts. The paper shipments in i9 6 0 i n d u s t r y o f M ic h i g a n in terms o f both employment and net v a l u e o f s h i p ­ ments to the f u r n i t u r e industry. T h is la tte r w i t h i n t h e Minor Water Users c a t e g o r y . persons than t h e p r i n t i n g and p u b l i s h i n g w ithin th a t category, industry A lt ho u gh p o s i t i v e n e t t r a d e ba la n c e in cl ud e d i t employed fe w e r industry, i t di d ac co un t f o r a small is another industry p o rtio n o f M ichigan's in I 9 6 0 . The P r o p o r t i o n o f D is c ha rg es I n t o P u b l i c Waters Which O r i g i n a t e d From M a n u f a c t u r i n g P l a n t s The economic v i t a l i t y imp o rta nt o f the manufacturing sector to t h e economic w e l l - b e i n g o f Michigan is e x t r e m e l y residents. And the m a n u f a c t u r in g s e c t o r is a l s o a ma jor source o f th e w a t e r b o r n e wastes which a r e d is c h a r g e d i n t o the p u b l i c w a t e r s o f t h e s t a t e . these two f a c t s have much r e l e v a n c e to t h i s Obviously, study and t o any f u t u r e s t u d i e s about th e e f f e c t s o f p u b l i c w a t e r p o l l u t i o n c o n t r o l measures upon the s t a t e ' s economy. Comparable and co m pl e te d a t a on t h e volume and makeup o f w a s t e ­ w a t e r s from v a r i o u s kind s o f p o i n t a v a i l a b l e d u r i n g t h e time o f t h i s p r o v i d e some i n f o r m a t i o n t h a t re la tiv e s tu d y . Table J - 2 , shows, a l b e i t sign ificance of d iffe r e n t w a t e r b o r n e waste d i s c h a r g e s . sources w e r e , u n f o r t u n a t e l y , not however, does in a g e n e r a l fashion, the kind s o f e n t i t i e s as sources o f Table J-2 re ports th a t Michigan Water Resources Commission e x e r t e d in e a r l y its direct 1968 t h e regulatory c o n t r o l s o v e r d is c h a r g e s sent t o p u b l i c w a t e r s by some 949 s e p a r a t e e n titie s . Out o f t h e s e 949 e n t i t i e s , 438 ( o r 46 p e r c e n t ) were **53 TABLE J - 2 . — Number o f e n t i t i e s w i t h d i s c h a r g e s i n t o p u b l i c w a t e r s o f M i c h i g a n , by t y p e s o f d i s c h a r g e s , 1968Number o f Ent i t i es Wi th Di s c h a r g e s a Type o f E n t i t y W i t h D isc har ges In d u strial D is c h a r g e s ^ M a n u f a c t u r i n g ....................................... M in in g ..................................................... E l e c t r i c power p l a n t s .................... Mi seel 1a n e o u s ....................................... Commercial Percentage o f Total **38 17 **6 . 2 % 1 .8 1.2 11 8 0. 8 198 20.9 , , 267 10 28.1 1.0 . 9**9 1 0 0 . 0% D i s c h a r g e s * " .................... Publ ic Wa s te wa te r T r e a t m e n t Works** Community6 ............................................ In s titu tio n a l^ .................................. T o ta l, A ll D is c h a r g e s . . . Some s e p a r a t e e n t i t i e s e m i t t e d more than one d i s c h a r g e . T h e r e f o r e , t h e number o f d i s c h a r g e s i n t o p u b l i c w a t e r s is g r e a t e r than th e number o f e n t I t i e s g i v e n in t h i s column. ^ I n d u s t r i a l d i s c h a r g e s a r e i d e n t i f i e d by S t a t e o f M i c h i g a n , Water Resources Commission, "Waste Water C o n t r o l S t a t u s ( I n d u s t r i a l and Commercial) as o f A p r i l 1, 1 9 6 8 , " (M im eog ra phe d. ) cL i s t e d in th e "Com me rci al" s e c t i o n o f Ib id . **Pub1 ic d i s c h a r g e s a r e l i s t e d by S t a t e o f M i c h i g a n , Department o f P u b l i c H e a l t h , D i v i s i o n o f E n g i n e e r i n g , " D i r e c t o r y o f Was tewa ter Tr e a t m e n t Works in M ic h i g a n as o f F e b r u a r y , 1 9 6 8 . " (Mim eo gra phe d. ) e ln c l u d e s p l a n t s under t h e c o n t r o l o f c o u n t i e s , m u n i c i p a l i t i e s , and s p e c i a l sewerage d i s t r i c t s . to w n s h ip s , ^ L i s t e d in " D i r e c t o r y o f .Wastewater T r e a t m e n t Works . . . " under t h e h e a d i n g , " P a r t i a l L i s t o f H o s p i t a l s and o t h e r I n s t i t u t i o n s . " k5k manufacturing p l a n t s . F u r t h e r m o r e , many o f t h e 267 m u n i c i p a l i t i e s w i t h wa s te wa te r t r e a t m e n t works in 1968 a l s o e m i t t e d e f f l u e n t s c o n t a i n i n g v a r y i n g amounts o f w a s t e w a t e r s t h a t o r i g i n a t e d plants. Jn a d d i t i o n to t h e a f o r e m e n t i o n e d p l a n t s and m u n i c i p a l i t i e s , wastes d i r e c t l y for 198 o f the se r e m a in in g u n i t s . m i s c e l l a n e o u s k in d s o f in d u strial t o g e t h e r made up a t o t a l total other e n t i t i e s into p u blic w a te rs . from m a n u f a c t u r i n g o f 705 m a n u f a c t u r i n g sent t h e i r waterborne Commercial e n t e r p r i s e s accounted M in e s , e l e c t r i c fa c ilitie s , o f **6 i n d i v i d u a l power p l a n t s , and p u b l i c in stitu tio n s sources o f e f f l u e n t s which were s u b j e c t to t h e c om m iss io n's r e g u l a t o r y a u t h o r i t y in 1968. LIST OF REFERENCES L I S T OF REFERENCES1 A rticles in J o u r n a l s and O t h e r P e r i o d i c a l s Canham, R o b e r t A. " S t a t u s o f F e d e r a l Water P o l l u t i o n C o n t r o l L e g i s l a ­ tio n ." 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" W a te r Q u a l i t y Standards: The F e d e r a l P e r s p e c t i v e - - P r o g r e s s t ow ard O b j e c t i v e s . J o u r n a l W at er P o l l u t i o n C o n t r o l F e d e r a t i o n , V o l . *t0, No. 9 ( S e p t . , 1968 J , 1 6 0 1 - 1 6 0 6 . Howe, C h a r l e s W. " W a t e r Resources and Reg iona l Economic Growth in t h e U n i t e d S t a t e s , 1950“ 1 9 6 0 . " S o u th e rn Economic J o u r n a l , V o l . 3*t, No. 4 ( A p r i l , 1 9 6 8 ) , *t77-*»89. H u f s c h m t d t , Maynard H. " E n v i r o n m e n t a l Q u a l i t y as a P o l i c y and P l a n n i n g O b je c tiv e ." J o u r n a l o f t h e American I n s t i t u t e o f P l a n n e r s , V o l . 3 7 , No. k ( J u l y , 1971) , 231-2*42. Kneese, A l l e n V. " S o c io - E c o n o m ic Asp ect s o f W a t e r Q u a l i t y Management." Journal Water P o l l u t i o n Control F e d e r a t i o n . V o l . 3 6 , No. 2 ( F e b . , 1 9 6 4 ) , 25*1-262. 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