Advocates Of Green-Themed Spending Program Say It Boosts Economy

Economists at the University of Michigan claim in a new study that the Great Lakes Restoration Initiative, a federal grant program that has spent some $2.5 billion between 2010 and 2016 on a broad array of projects related to environmental issues, is also giving an economic boost to the region.

The study claims that improved home values, increased employment in the tourism industry and other economic benefits in the coming years can be attributed to spending by the federal program. The authors write, “Every dollar of federal spending on projects funded under the GLRI from 2010–2016 will produce a total of $3.35 of additional economic output in the Great Lakes region through 2036.”

John Linc Stine, who chairs the Great Lakes Commission, touted the study in a press release. He said, “This study describes what we already know in facts and figures — cleaning up legacy pollution and restoring aquatic habitat on the Great Lakes isn’t only good for the environment, it creates jobs and fuels the regional economy. It’s a positive legacy that states and our partner organizations can leave for future generations.”

Many of the projects the Great Lakes Restoration Initiative funds have little to do with boosting the state’s economy. For example, in 2010, Michigan State University was given a $135,668 grant from the Environmental Protection Agency via the Great Lakes Restoration Initiative. The money was to be used to study the population of the Mitchell’s Satyr Butterfly and Hine’s Emerald Dragonfly in the Great Lakes region.

The Great Lakes Restoration Initiative gave $203,874 in 2014 for Indian reservations in Minnesota “to evaluate moose and deer use of habitat sites designed and managed for the benefit of moose.”

James Hohman, director of fiscal policy at the Mackinac Center for Public Policy, challenged the claims, suggesting that the cause-and-effect link is shaky.

“The authors do some clever things to try to determine the program’s effects,” he said. “But studying butterflies and dragonflies — among the projects funded through the program — has no direct impact on property values and questionable indirect influence.”

“It also falls into the same problems of other multiplier analyses,” Hohman continued. “It tries to measure how large of a splash the spending makes but doesn’t justify taking the money to begin with.”

Hohman said that the advocates frequently claim that their preferred government programs generate indirect but positive multiplier effects on the overall economy. Over the years, Hohman has tracked proponents who have used positive multiplier effects to get people to support more taxpayer funding. They have advocated things such as transit spending, the Earned Income Tax Credit, film tax subsidies, arts spending, historic preservation tax credits, early childhood education and tourism advertising.

Jason Hayes, director of environmental policy for the Mackinac Center, also raised questions about how grants from the GLRI and other Great Lakes clean water spending initiatives are spent.

“Much of the discussion around GLRI spending relies on a general fondness for the well-being of the Great Lakes and a near absolute ignorance about budget specifics,” Hayes said. “There is little to no oversight of the spending — no one really has a clear picture about where GLRI spending is going,” Hayes said.

He also pointed out that some of the money went to municipal and state infrastructure projects, not specifically on water quality improvements.

“Yet raising questions about those non-water-related spending is often attacked as being anti-environment,” Hayes continued. “Hundreds of millions are being spent on the GLRI and billions on the Great Lakes overall. But without proper budget oversight, the GLRI is deemed a success primarily on the basis of how many dollars are thrown into it. No one knows what the program is trying to achieve, other than some general idea of ‘clean water,’ so no one knows whether that spending has been effective.”