Legislature moves to combine DNR, DEQ, but Cherry’s streamlining agenda remains unclear

Lt. Gov. John Cherry at the Michigan International Speedway (Creative Commons photo by People for Cherry via Flickr)

Four months after Gov. Jennifer Granholm publicly tasked her No. 2, John Cherry, with leading an effort to streamline government, Michigan’s official unemployment rate has hit 14.1 percent, the state is undergoing the steepest decline in revenue in at least a half century, and the state legislature is moving ahead with plans to combine two departments, Natural Resources and Environmental Quality.

Cherry, the presumed Democratic nominee for governor in 2010, has embarked on a tour armed with a PowerPoint presentation asking basic questions about the purpose of state government. Questions like: “Is public safety a core function of state government?”

The lieutenant governor heads to Grand Rapids this evening as part of his streamlining tour in an effort Inside Michigan Politics editor Bill Ballenger bluntly described in an interview as “all show and no go.”

Gov. Jennifer Granholm with Lt. Gov. John Cherry during the governor's State of the State address in February. (Governor's office photo by Gary Shrewsbury)

“We must reform our government to meet the needs of our new economic realities long after the stimulus funds are gone,” Granholm said during her Feb. 3 State of the State address. “That is why I have asked Lt. Gov. Cherry to lead a comprehensive effort to dramatically change the shape and size of state government — reducing the number of our departments from 18 to eight, reforming our civil service system, creating public-private partnerships, and infusing technology everywhere. Because we won’t settle for 9-to-5 government in a 24-7 world.”

At the time, some saw the move as an opportunity for Cherry to step out from Granholm’s shadow in advance of the 2010 fight to keep the governorship in Democratic hands.

But the pace of the executive office streamlining effort now seems dwarfed by the pace at which Michigan’s economy is unraveling.

In May, the state’s tax revenue forecasts were revised to estimate a 23-percent one-year decline and the governor mandated furlough days for state employees. The legislature is now struggling to settle on a budget by Oct. 1. Environmental regulation is among the first targets for serious slicing and dicing.

Both branches of the legislature are working toward combining the DNR and DEQ, with House and Senate lawmakers recently passing appropriations measures slashing the budget of the new agency.

People of varying political outlooks seem to believe that combining the departments could be a reasonable move for efficiency. The DEQ, after all, was only split off from the DNR in 1995. In the rush to scale back, Republicans have mounted an attack on environmental regulation with Attorney General Mike Cox, who is running for governor, labeling the DEQ a “hostile occupational army.”

Cherry’s office did not return a call for comment about the streamlining efforts underway.

Megan Brown, a spokeswoman for Granholm’s office said: “… [W]e understand there is interest on the part of some to combine these departments. This is going to be part of ongoing discussion about the budget and look forward to working with both chambers of the legislature.”

Although the governor’s office is not taking a position on the departmental merger, Granholm’s approval is necessary.

The primary sponsor of the House bill to combine the DEQ and DNR, Hancock Democrat Mike Lahti, said that fusing the department’s facilities and administration could save the state up to $2 million a year.

Lahti said in an interview: “We wouldn’t be going through with this if we didn’t think the governor would approve it.”

The House appropriations bill that lays out the budget for the new combined department does not include funding for the DEQ’s wetland permitting program, which has been targeted for elimination by lawmakers and the governor, who want the federal government to step in to provide sole environmental oversight of Michigan’s wetlands. Lahti said that lawmakers are still hoping to find funding for that program.

In the Republican-controlled Senate, the appropriations bill for the combined DEQ-DNR agency features an 18-percent cut beyond what was requested in the governor’s budget.

Advocates of cutting the state wetlands program have focused not on the savings to the state but on the cost of the program to Michigan business.

And, while slashing the budget, the Senate also passed bills to require the department to spend staff time reviewing its business friendliness and privatizing permitting work.

James Clift, policy director for the Michigan Environmental Council issued this report on Tuesday:

The Senate passed the package of bills that will further hinder the work of state agencies trying to protect the Great Lakes and other natural resources. (See SB 13, 431, 434-436,438-439). The package defaults to federal standards, requires excessive paper work, privatizes services and includes unrealistic time lines for decision making. This package occurs at the same time that the budget for the department is being cut to an all-time low.

Warnings from the Engler administration

Russ Harding, who was the first DEQ director when it was formed in 1995 under then-Gov. John Engler, said that recombining the agencies will save far less than $2 million because it may only involve the elimination of a couple of top administrative positions.

Harding, who was one of three people that wrote the executive order the split the DNR and DEQ, said the division was intended to separate regulatory programs into a distinct department.

From a budgetary point of view, Harding, who now works for the Mackinaw Center free market public policy think tank, said that merging the departments is just “rearranging deck chairs.”

Harding said he’s been critical of plans to recombine the departments because of concerns that it could lead to increased hassles for those seeking permits.

Also, unlike the DEQ, the DNR is governed by an appointed board of volunteers which holds meetings just once a month.

Harding said that the six-member DNR board may not be prepared to oversee DEQ environmental regulations.

Keith Charters, chairman of the Natural Resources Commission, said that he has mixed emotions about plans to recombine the departments.

“I’ve told the governor and the lieutenant governor that we would not be a barrier and we’d be willing to help any way we can,” said Charters, who was first appointed by Engler in 1994.

Charters recalls the reasons for the formation of the DEQ this way: “There were many legislative mandates that were coming on the environmental side that were unfunded and it was gradually eating into some of the funding of the resources side. Charters said the move was designed to protect the ‘hook and bullet’ money from the costs of environmental mandates. If the departments were to recombine, he said, hunting and fishing money might again become vulnerable.

“I understand all the tugs and pulls,” Charters said. “Is it an economic savings, yes, but their problem is in billons not millions. If you combine the DEQ, DNR, the Department of Agriculture and [the Department of History, Arts and Libraries] you are still talking about saving less than one tenth of one percent of the total budget.”