A couple summer’s back we had the Animas River turn yellow because of materials stored on the edge of the river. A couple years before that, coal ash and the Charleston spill. Now the “red” river (but at in Russia)….So maybe legislators can help us understand why continuing to store this stuff on the edge of water supplies is ok? Or why we shouldn’t put a bunch of money toward removing this material so water supplies and ecosystem are less at risk?
The reliability of the assets within the area of interest starts with the design process in the asset management plan. Decision-making dictates how the assets will be maintained and effective means to assure the maximum return on investments. Through condition assessment, the probability of failure can be estimated. Assets can also fail due to a growing area that may contribute to exceeding its maximum capacity. Operation and maintenance of the assets are important in reassuring a longer life span as well as getting the most out of the money to be spent. Prioritizing the assets by a defined system will allow for the community to see what areas are most susceptible to vulnerability/failure, which assets need the most attention due to their condition, and where the critical assets are located in relation to major public areas (hospitals, schools, etc.) with a high population.
So what happens when conditions change? Let’s say sea levels are rising and your land is low. What would the potential costs be to address this? Better yet, what happens if it rains? We looked at one south Florida community and the flood stage for each based on 3 storm events: the 1:10 used by FDOT (Assumes 2.75 inches in 24 hours), the Florida Building Code event that includes a 5 in in one hour event (7 in in 24 hrs), and the 3 day 25 year event (9.5-11 inches).
Of no surprise is that the flooding increases as rainfall increases. Subsequent runs assumed revisions based on sea level rise. The current condition, 1, 2 and 3 ft sea level rise scenarios were run at the 99 percentile groundwater and tidal dates and levels. Tables 2-5 depict the flood stage results for each scenarios. The final task was designed to involve the development of scenarios whereby a toolbox options are utilized to address flooding in the community. Scenarios were to be developed to identify vulnerabilities and cost effectiveness as discussed previously.
The modeling results were then evaluated based of the accompanying infrastructure that is typically associated with same. A summary of the timelines and expected risk reductions were noted in the tables associated with storm and SLR scenarios. This task was to create the costs for the recommended improvements and a schedule for upgrading infrastructure will be developed in conjunction with staff. Two issues arise. First, the community needs to define which event they are planning to address and the timelines as the costs vary form an initial need of $30 million to over $300 million long-term. Figure 1 shows how these costs rise with respect to time. The long-term needs of $5 million per 100 acres matches with a prior effort in Palm Beach County.
Figure 1 Summary of Costs over the 3 ft of potential sea level Rise by 2011, under the 3 storm planning concepts.
You asked for more figures – so here you go Very cool stuff. All done by students.
My grandmother lost here summer cabin outside of Grayling, Michigan in the Great Crawford County fire on 1990. My grandfather had hauled the cabin and out buildings up to Grayling by rail from Detroit in the 1920s (some old houses my Great Grandmother had owned). It was one of many fires that year, but an early one caused by significantly less snow over the prior winter, high winds, and carelessness. The cabin was gone before anyone could react as it appears to have been in the dead center of the moving flames. I recall the story on CNN, but no one realized exactly where it was. My grandmother never recovered. She wasn’t the only one. 20 year later there are trees.
Forest fires happen with increasing frequency. Today in Southern California, the Sand Fire has set more than 35,000 acres of the Santa Clarita Valley ablaze. Difficulties fighting it are not limited to temperatures hitting 101 degrees in the area and dried brush from 5 years of drought conditions. The Soberanes Fire in Monterey County has burned 16,100 acres along the California coast between Carmel and Big Sur. The fire is bigger than the size of Manhattan. The 778 acre McHugh Fire located on the steep terrain south of Anchorage, Alaska. Looking at the map, it seems the west is on fire. A larger and larger portion of the US Forest Services’ budget gets spent on fire-fighting each year – 67% in 2016. Yet fires on Forest Service property account for only 20% of the total fire nationally (1.9 million acres or a total of over 10 million acres in 2015), but this total amount is increasing. Warmer weather in the west has increased the length of fire season, drought has increased the risk, budgets are stagnant so means to prevent fire intensity have been reduced, The only good news is that a University of Vermont study suggests that areas where pine beetle has killed trees is actually thinner and less at risk that heathier forests, if that is a “good” thing.
My friend Dr. Chi Ho Sham did some work on forest fires on watersheds a few year back. He found that forest fires have obvious impacts on people and our customers, but also our water supplies and our water supplies. The ash runs off into streams and is difficult to remove at water plants because it is so fine. Areas burned are far more subject to erosion after rain of snow melt thereby creating a need for more treatment at water plants. This will go on for some time after the rain until groundcover can re-establish itself. Fire retardant and water drops combat some fires although the retardant shows up in streams and water supplies with adverse impacts. Dams and reservoirs will need more frequent dredging due to buildup, and wildlife equilibrium will be disrupted. Forest fires make for interesting news, when they are far away, but few utilities think too much about what would happen if their watershed were impacts. No groundwater utility has thought about impacts on surficial groundwater although that might be an interesting study. But we should all have plans, should watch our watershed, and be cognizant that far away fires might give us the opportunity to study what could possibly go wrong at our utilities. Meanwhile, our thoughts are with those in the realm of the conflagrations. Be Safe!!
Current Fire map – July 2016 Sources; http://activefiremaps.fs.fed.us/
Satellite photo of fire outside San Francisco Source NASA Earth
FIre outside Santa Clarita CA July 2016Source CNN
I have a question – what was the impact of the 2008 economic crisis on water and sewer infrastructure funding? I have a hypothesis – the amount of monies transferred to non-water and sewer operations increased. Is the hypothesis true?
The next question to answer is that if transfer monies increased, did they decrease once property values started to come back? My hypothesis is no.
Finally what impact does this have on water and sewer infrastructure going forward? I suspect that the answer is that we underfund infrastructure or justify the lack of funding through actuarial means (I actually had a utility director tell me that his pipes were designed to last 250 years. Seriously. Of course that is nonsense, but it is a means to keep your need for replacement funding down).
I have a student and we are working on these issues now. We are going to gather data from several hundred utilities over the next six months, crunch 11 years of data and let’s find out. If you or your clients are interested in adding your data to the mix, please send it to me. I need 2005 -2015 expenditure info. Also some operational data like ADF, MDF, miles of pipe, customers, treatment type and CCR. We will be publishing the results. Should be interesting……
For those wondering what the big report was going yo say, interesting reading, and a lot like Walkerton – plenty of blame to go around.
And some related articles:
Speaking of water supply problems, welcome to Flint, Michigan. There have been a lot of coverage in the news about the troubles in Flint the last couple of months. However if you read between the lines you see two issues – first this is not new – it is several years old, going back to when the City’s water plant came back on line in May 2014. Second this was a political/financial issue not a public health issue. In fact, the political/financial goals appear to have been so overwhelming, that the public health aspects were scarcely considered. Let’s take a look at why.
Flint’s first water plant was constructed in 1917. The source was the Flint River. The second plant was constructed in 1952. Because of declining water quality in the Flint River, the city, in 1962, had plans to build a pipeline from Lake Huron to Flint, but a real estate scandal caused the city commission to abandon the pipeline project in 1964 and instead buy water from the City of Detroit (source: Lake Huron). Flint stopped treating its water in 1967, when a pipeline from Detroit was completed. The City was purchasing of almost 100 MGD. Detroit declared bankruptcy. The City of Flint was basically bankrupt. Both had appointed receivers. Both receivers were told to reduce costs (the finance/business decisions). The City of Flint has purchased water for years from Detroit as opposed to using their Flint River water plant constructed in 1952. The Flint WTP has been maintained as a backup to the DWSD system, operating approximately 20 days per year at 11 MGD.
The City of Flint joined the Karegnondi Water Authority (KWA) in 2010. The KWA consists of a group of local communities that decided to support and fund construction of a raw water pipeline to Lake Huron. The KWA was to provide the City of Flint Water Treatment Plant with source water from Lake Huron. An engineer’s report noted that a Genesee County Drain Commissioner stated that one of the main reasons for pursuing the KWA supply was the reliability of the Detroit supply given the 2003 power blackout that left Flint without water for several days. Another issue is that Flint no say in the rate increases issued to Flint by Detroit. Detroit’s bankruptcy may also have been a factor given the likelihood of increased prices. While discussion were ongoing for several years thereafter, the Detroit Free Press reported a 7-1 vote in favor of the KWA project by Flint’s elected officials in March, 2013. The actual agreement date was April 2013. The cost of the pipeline was estimated to be $272 million, with Flint’s portion estimated at $81 million.
The City of Detroit objected due to loss of revenues at a time when a receiver was trying to stabilize the city’s finances (in conjunction with the State Treasurer). In February 2013, the engineering consulting firm of Tucker, Young, Jackson, Tull, Inc. (TYJT), at the request of the State Treasurer, performed an analysis of the water supply options being considered by the City of Flint. The preliminary investigation evaluated the cost associated with the required improvements to the plant, plus the costs for annual operation and maintenance including labor, utilities, chemicals and residual management. They indicated that the pipeline cost was likely low and Flint’s obligation could be $25 million higher and that there was less redundancy in the KWA pipeline than in Detroit’s system. In 2013, the City of Detroit made a final offer to convince Flint to stay on Detroit water with certain concessions. Flint declined the final Detroit offer. Immediately after Flint declined the offer, Detroit gave Flint notice that their long-standing water agreement would terminate in twelve months, meaning that Flint’s water agreement with Detroit would end in April 2014 but construction of KWA was not expected to be completed until the end of 2016.
It should be noted that between 2011 and 2015, Flint’s finances were controlled by a series of receivers/emergency managers appointed by the Governor. Cutting costs was a major issue and clearly their directive from the Governor. Cost are the major issue addressed in the online reports about the issue. Public health was not.
An engineering firm was hired as the old Flint River plan underwent $7 million in renovations in 2014 to the filters to treat volumes of freshwater for the citizens. The project was designed to take water from the Flint River for a period of time until a Lake Huron water pipeline was completed. The City of Flint began using the Flint River as a water source in May of 2014 knowing that treatment would need to be closely watched since the Michigan Department of Environmental Quality in partnership with the U.S. Geological Survey, and the City of Flint Utilities Department conducted a source water assessment and determined the susceptibility of potential contamination as having a very high susceptibility to potential contaminant sources (take a look at this photo and see what you think).
Flows were designed for 16 MGD. Lime softening, sand filters and disinfection were in place. Everything sounded great. But it was not. Immediately, in May and August of 2014, TTHM samples violated the drinking water standards. This means two things – total organic carbon (TOC) in the water and additional chlorine being added to disinfect and probably reduce color caused by the TOC. Softening does not remove TOC. Filtration is not very effective either. High concentration usually needs granular activated carbon, ion exchange or membranes. The flint plant had none of these, so the carbon staying in the water. To address the TTHM issue, chlorine appears to have been reduced as the TTHM issue was in compliance by the next sampling event in Nov 2014. However, in the interim new violations included a total coliform and E. coli in August and September of 2014, and indication of inadequate disinfection. That means boil your water and lots of public outcry. The pH, salinity (salt) and other parameters were reported to be quite different than the Detroit water as well. A variable river system with upstream agriculture, industry and a high potential for contamination, is not nearly as easy to treat as cold lake water. These waters are very different as they City was to find. What this appears to indicate is that the chemistry profile and sampling prior to conversion and startup does not appear to have been fully performed to identify the potential for this to occur or this would have been discovered. This is now being suggested in the press.
The change in water quality and treatment created other water quality challenges that have resulted in water quality violations. Like most older northern cities, the water distribution system in almost 100 years old. As with many other municipalities at the time, all of the service lines from the cast iron water mains (with lead joints) to end users homes were constructed with lead goosenecks and copper lines. Utilities have addressed this with additive to prevent corrosion. In the early 1990s water systems were required to comply with the federal lead and copper rule. The concept was that on the first draw of water in the morning, the lead concentration should not exceed 0.015 mg/L and copper should not exceed 1.3 mg/L. Depending on the size of the utility, sampling was to be undertaken twice and a random set of hoses, with the number of samples dependent on the size of the system. The sampling was required to be performed twice, six months apart (note routine sampling has occurred since then to insure compliance). Residents were instructed on how to take the samples, and results submitted to regulatory agencies. If the system came up “hot” for either compound, the utility was required to make adjustments to the treatment process. Ideally water leaving the plant would have a slightly negative Langlier saturation index (LSI) and would tend to slightly deposit on pipes. Coupon tests could be conducted to demonstrate this actually occurred. As they age, the pipes develop a scale that helps prevent leaching. Most utilities tested various products. Detroit clearly did this and there were no problems. Flint did not.
The utility I was at was a perfect 100% non-detects the first time were tested. We had a few detections of lead and copper in samples the second time which really bothered me since the system was newer and we had limited lead in the lines. I investigated this and found that the polyphosphate had been changed because the County purchasing department found a cheaper product. I forced them to buy the old stuff, re-ran the tests and was again perfect. We instructed our purchasing department that saving a few bucks did not protect the public health, but the polyphosphate product did. Business and cost savings does not trump public health! Different waters are different, so you have to test and then stay with what works.
Now fast forward to Flint. They did not do this testing. The Flint River water was different that Detroit’s. Salinity, TOC, pH and overall quality differed. Accommodations were not made to address the problem and the state found no polyphosphates were added to protect the coatings. Veolia reported that the operations needed changes and operators needed training. Facilities were needed to address quality concerns (including granular activated carbon filter media). As a result the City appears to have sent corrosive water into the piping system, which dissolved the scale that had developed over the years, exposing raw metal, and created the leaching issue. Volunteer teams led by Virginia Tech researchers reported found that at least a quarter of Flint households have levels of lead above the federal level of 15 ppb, and as high as 13,200 ppb. Aging cast-iron pipe compounded the situation, leading to aesthetic issues including taste, odor and discoloration that result from aggressive water (brown water). Once the City started receiving violations, public interest and scrutiny of the drinking water system intensified.
The City Commission reportedly asked the receiver to switch back to Detroit water, but that request was initially rebuffed and the damage to pipes continued. Finally in October 2015, the water supply was switched back to Detroit and the City started adding additional zinc orthophosphate in December 2015 to facilitate the buildup of the phosphate scale eroded from the pipes by the Flint River water. But that means the pipes were stable, then destabilized, now destabilized again by the switch back. It will now take some time for the scale to rebuild and to lower lead levels, leaving the residents of Flint at risk because of a business/finance/political decision that had not consideration of public health impacts. And what is the ultimate fate of the KWA pipeline?
Just when things were starting to look up (?), in January 2016, a hospital in Flint reported that low levels of Legionnaires’ disease bacteria were discovered in the water system and that 10 people have died and another 77 to 85 affected. From the water system? A disinfection problem? Still TOC in the water? The lawsuits have begun but where does the problem lie? Let’s look at Walkerton Ontario for guidance in the aftermath of their 2000 incident.
First it is clear that public health was not the primary driver for the decisions. Treating water is not as simple as cost managers think. You need to understand what water quality, piping quality and stabilization you have and address the potential issues with new water sources. Membrane systems are very familiar with these challenges. Cost cannot be the driver. The Safe Drinking Water Act does not say cost is a consideration you use to make decisions. Public health is. So the initial decision-making appears to have been flawed. Cost was a Walkerton issue – cost cannot be the limiting factor when public health is at risk.
The guidance from consultants or other water managers is unclear. If the due diligence of engineers as to water quality impacts of the change in waters was not undertaken, the engineering appears to have been flawed. If the engineer recommended, and has lots of documentation saying testing should be done, but also a file full of accompanying denials from the receivers, another flawed business decision that fails the public health test. If not, I see a lawsuit coming against the consultants who failed in their duty to protect the public health, safety and welfare.
The politics is a problem. A poor community must still get water and sewer service. Consultants that can deal with rate and fee issues should be engaged to address fairness and pricing burdens. Was this done? Or was cutting costs the only goal? Unclear. The politics was a Walkerton issue.
Was the water being treated properly? Water quality testing would help identify this. Clearly there were issues with operations. Telling the state phosphates were used when they were not, appears to be an operations error. Walkerton also had operations issues as well. A major concern when public health is at risk. Veolia came to a similar conclusion.
The state has received its share of blame in the press, but do they deserve it? The question I have is what does the regulatory staff look like? Has it been reduced as the state trims its budget? Are there sufficient resources to insure oversight of water quality? The lack of provincial resources to monitor water quality was an issue in Walkerton – lack of oversight compounded local issues. That would then involve the Governor and Legislature. Politics at work. Likewise was there pressure applied to make certain decisions? If so, politics before public heath – a deadly combination.
So many confounding problems, but what is clear is that Flint is an example of why public utilities should be operated with public health at the forefront, not cost or politics. Neither cost of politics protect the public health. While we all need finances to pay for our needs, in a utility, money supports the operations, not controls it. We seems to have that backward. Private entities look sat controlling costs. Public agencies should look at public service first; cost is down the list. We need the operations folks to get the funds needed to protect the public health. And then we need to get the politicians to work with the staff to achieve their needs, not limit resources to cut costs for political gain. Ask the people in Flint.
So is Flint the next Walkerton? Will there be a similar investigation by outside unconnected people? Will the blame be parsed out? Is there a reasonable plan for the future? The answers to these questions would provide utilities with a lot of lessons learned and guidance going forward and maybe reset the way we operate our utilities. Happy to be a part of it if so!
In the last blog we talked about a side issue: ecosystems, bison, wolves, coyotes and the Everglades, which seem very distant form our day-to-day water jobs, but really are not. So let’s ask another, even more relevant issue that strikes close to home. Why is it that it is a good idea to store coal ash, mine tailings, untreated mine waste, garbage, and other materials next to rivers? We see this over and over again, so someone must think this is brilliant. It cost Duke Energy $100 million for the 39,000 tons of coal ash and 24 MG of wastewater spilled into the Dan River near Eden NC in 2014. In West Virginia, Patriot Coal spilled 100,000 gallons of coal slurry into Fields Creek in 2014, blackening the creek and impacting thousands of water supply intakes. Fines to come. Being a banner year for spills, again in West Virginia, methylcyclohexamethanol was released from a Freedom Industries facility into the Elk River in 2014, contaminating the water supply for 300,000 residents. Fines to come, lawsuits filed. But that’s not all. In 2008, an ash dike ruptured at an 84-acre solid waste containment area, spilling material into the Emory River in Kingston TN at the TVA Kingston Fossil Plant. And in 2015, in the Animas River in western Colorado, water tainted with heavy metal gushed from the abandoned Gold King mining site pond into the nearby Animas River, turning it a yellow for dozens of miles crossing state lines.
Five easy-to-find examples that impacted a lot of people, but it does not address the obvious question – WHY are these sites next to rivers? Why isn’t this material moved to more appropriate locations? It should never be stored on site, next to water that is someone else’s drinking water supply. USEPA and state regulators “regulate” these sites but regulation is a form of tacit approval for them to be located there. Washington politicians are reluctant to take on these interests, to require removal and to pursue the owners of defunct operations (the mine for example), but in failing to turn the regulators loose to address these problems, it puts our customers at risk. It is popular in some sectors to complain about environmental laws (see the Presidential elections and Congress), but clearly they are putting private interests and industry before the public interest. I am thinking we need to let the regulators do their job and require these materials to be removed immediately to safe disposal. That would help all of us.
Most water suppliers realize that the more natural their land is upstream of their water supplies, the less risk there likely is for their customers. Under the source water protection programs that state, local officials and water utilities implement, the concept is to keep people related activities out, and let the natural forests and landscapes remain. For the most part the natural areas support only a limited amount of wildlife (sustainable) and thereby there natural systems are attuned to compensate for the natural pollutant loads, sediment runoff, ash, detrital matter, etc., that might be created through natural processes. For thousands of years these systems operated sustainably. When people decide there needs to be changes, it seems like the unanticipated consequences of these actions create more problems. Now many of these same ecosystems do not work sustainably and water quality has diminished, increasing the need for treatment and the risks of contamination to the public. It would be better, but decidedly less popular on certain fronts, to provide more protection to natural systems that extend into watersheds (which is most of them), not less.
So this leads to a series of questions that go to the greater questions about natural environments:
Is it really necessary to cull the small Yellowstone bison herd by 1000? What do bison have to do with watersheds? Well, the bison create much less damage to grasslands and underlying soil than cattle due to the size of their hooves. An argument is that we need to cull the herd because they transmit disease to cattle, but Brucellosis has never been demonstrated to move from bison to cattle, so disease is not an answer. What is really happening is that there is competition between buffalo and cattle for grazing. Competition with cattle means that the cattle are on public property, not private ranch lands, and the cattle trample the public lands which creates the potential for soil erosion and sediment runoff. So I am thinking water folks should be siding with the bison. Of course without wolves, there is no natural predator for bison, which raises a different sustainability problem, so maybe instead of killing them, we move them to more of their native ranges – maybe some of those Indian reservation might want to restart the herds on their lands? That might be good for everyone, water folks included.
Part 2 – is it necessary to continue to protect wolves or should we continue to hunt them in their native ranges? Keep in mind wolf re-introduction efforts are responsible for most of the wolf populations in the US, specifically in the Yellowstone area. Without wolves, there is no control of large grazing animal populations (see bison above, but also elk and deer), and there is a loss of wetland habitat because the elk eat the small shoots used by beavers to build dams and trap sediment. Eliminating wolves has been proven to create imbalance. Wolves = sediment traps = better water quality downstream. Sounds like a win for everyone. (BTW there is a program in Oregon to protect wolves and help ranchers avoid periodic predation of calves by wolves so they win too).
Part 3 – Is it really necessary to kill off coyotes in droves? The federal government kills thousands of coyotes and hunters and others kill even more. This is a far more interesting question because it leads to one of those unintended consequences. !100+ years ago people decided wolves were bad (we still have this issue ongoing – see above). So we eradicated wolves. No wolves means more rodents, deer, elk, etc. which mean less grass, less aspens and less beavers, which means more runoff which does not help water suppliers. It also means more coyotes, because there is more food for the coyotes. Interesting that coyotes have pretty much covered the entire US, when their ranges were far more limited in the past. Coyotes are attracted to the rodents and rabbits. But the systems are generally not sustainable for coyotes because there is not enough prey and there is no natural control of the coyotes – again, see wolves above. A Recent Predator defense report indicates that culling coyotes actually increases coyote birth rate and pushes them toward developed areas where they find cats and small dogs, unnatural prey. Not the best solution – unintended consequences of hunting them on more distant land pushes them into your neighborhood. Not the consequence intended. So maybe we keep the small dogs and cat inside at daybreak and nightfall when the coyotes are out and let them eat the rats and mice that the cats chase and once consumed they go away. Coyotes need to eat grazers and rodents but you need the right mix or the grazers overgraze, which leads to sediment runoff issues – which is bad for us. That also seems like a win.
Everglades restoration is a big south Florida issue. The recharge area for the Biscayne aquifer is the Everglades. So water there seems like a win for water suppliers? So why aren’t we the biggest Everglades advocates out there? Still searching for that answer, but Everglades restoration is a win for us and a win for a lot of critters. Federal dollars and more federal leadership on restoration is needed. Which leads to ….
Do we need more, not less management of federal lands? Consider that the largest water manager in the west is the federal government, which has built entire irrigation systems to provide water to farmers who grow crops in places that are water deficient. Those farms then attract people to small towns that consume more of the deficient water. Then people lobby to let cattle graze on those public lands (see bison above), timber removal – which increases sediment erosion, or mining (what could possible go wrong there?). So since the federal government manages these lands, wouldn’t better regulations and control to keep the federal properties more protected benefit water users and suppliers? Contrary to the wishes of folks like the guys holed up in a federal monument in Oregon, or the people who have physically attacked federal employees in Utah and Nevada, more regulations and less freedom is probably better in this situation for the public good. If we are going to lease public lands (and most lands leased are leased to private parties for free or almost free), and there should be controls on the activities monitoring for compliance and requirements for damage control caused by those activities. There should be limits on grazing, timber and mining, and monitoring of same. Lots of monitoring. It is one of the things government really should do. And we need it to protect water users downstream. Again a win for water suppliers.
So as we look at this side issue, ecosystems, bison, wolves, coyotes and the Everglades seem very distant from our day-to-day water jobs. But in reality they are not. We should consider the impacts they might have on water supply, keeping in mind natural system decisions are often significantly linked to our outcomes, albeit the linkage is not always obvious.
Most states were doing pretty well before the 2008 recession hit, but that ended in 2009. Most states had to make extremely difficult cuts or raise taxes, which was politically unacceptable. Of course invested pension systems received a lot of attention as their value dropped and long term sufficiency deteriorated, which was fodder for many changes in pensions, albeit not how they were invested. The good news is a lot of them came back in the ensuing 5 years, but 2015 may be different. A number of states have reported low earnings in 2015 and whether this may be the start of another recession. The U.S. economy has averaged a recession every six years since WWII and it has been almost seven years since the last contraction. With China devaluing their currency, this may upset the economic engine. At present there are analysts on Wall Street who suggest that some stocks may be overvalued, just like in 1999. If so, that does not bode well states like Illinois, Kansas, New Jersey, Louisiana, Alaska and Pennsylvania that are dealing with significant imbalances between their expenses and incomes. Alaska has most of its revenue tied to oil, so when oil prices go down (good for most of us), it is a huge problem for Alaska that gives $2200 to every citizen in the state. An economic downturn portends poorly for the no tax, pro-business experiment in Kansas that has been unsuccessful in attracting the large influx of new businesses, or even expansion of current ones. California and next door Missouri, often chided by Kansas lawmakers as how not to do business, outperform Kansas.
Ultimately the issue that lawmakers must face at the state and as a result the local level is that tax rates may not be high enough to generate the funds needed to operate government and protect the states against economic down turns. There is a “sweet spot” where funds are enough, to deal with short and long term needs, but starving government come back to haunt these same policy makers when the economy dips. It would be a difficult day for a state to declare bankruptcy because lawmakers refuse to raise taxes and fees.