The Mississippi Manufacturers Association (MMA) is trying to help its members who are already in compliance with environmental regulations reduce the burden of additional compliance costs.
“By far, U.S. manufacturers have the highest non-production costs relative to major foreign competitors,” said Derek Easley, director of environmental affairs for MMA. “These extra costs — corporate tax rates, employee benefits, tort litigation, regulatory compliance and energy — are estimated at approximately 22% of the price of production for U.S. firms … twice the size of the average direct labor costs of U.S. manufacturers and a major factor in our loss of trade and jobs.”
Easley, who testified October 22 for MMA to the Senate Finance, Environmental Protection, Conservation and Water Resources and Local and Private Committees, stressed the importance to state lawmakers not to burden the state’s 3,000 manufacturers with additional fees.
“MMA opposes any law or regulation that assesses all or any portion of the cost of implementation of the Clean Water Act Phase II Storm Water regulations on business and industries that have complied with and paid for compliance with Phase I Storm Water regulations,” said Easley.
MMA’s environmental committee meets monthly to discuss environmental issues and once a year at the Pearl River Resort with state and federal regulators, environmental consultants, law firms and other experts in the field to determine policy issues that will be presented to the board of directors. At the last meeting, they pointed out that manufacturers are paying almost $8,000 per employee to adhere to federal regulations, while the national average for all other industry sectors is roughly $5,700 per employee.
“Unlike other industries, most manufacturers are unable to pass on rising costs to its customers,” said Easley. “This limitation stems from the fact that manufacturing is the most globally engaged of all American industries, facing its most intense international competition ever.”
Phase I Storm Water regulations dealt with ensuring that industry controlled stormwater runoff. Phase II, which the Environmental Protection Agency (EPA) recently implemented, deals with municipalities and stormwater runoff, affecting business owners from developers to retailers.
“The issue of Phase II Storm Water regulations concerns water quality, not quantity, and industry has been paying to ensure the quality of their stormwater since 1990,” said Easley.
Easley said he felt confident that state lawmakers would pass legislation in the 2005 session providing stormwater districts with a funding mechanism.
“We’ll oppose any double taxation on manufacturers by the funding of stormwater districts,” he said. “Manufacturers are just now starting to see some sort of rebound after taking some pretty good hits in years past.”
Since January 2000, Mississippi has lost 342 manufacturing plants and 51,000 manufacturing jobs.
“It doesn’t make sense to increase their non-production burden at a time when they’re forced to operate so lean and absorb extra costs to compete globally,” said Easley.
Mississippi recently missed having an added burden because the EPA initially designated the Memphis MSA, of which DeSoto County is a part, for non-attainment of air quality.
“However, DeSoto County was able to show that the non-compliance was not their fault, that it was indeed attaining air quality,” said Mark Leggett, spokesperson for MMA. “As a result, the EPA did not lump in DeSoto County with the other counties in that MSA. If so, there’d have been offsets, or burdens, placed on Mississippi on future emissions. It would have directly impacted industry in DeSoto County and, among many things, could have been used to cut highway funds, restrict projects and even make vehicle inspections stricter.”
The MMA will also seek from legislators a property tax exemption for federal or state-mandated pollution control equipment.
“This legislation would bring Mississippi more in line with the 40 other states that currently offer some type of exemption from property taxes on mandated pollution control equipment,” he said.
The MMA also supports an income tax credit for brownfields property reclamation and adequate funding for the state Department of Environmental Quality (DEQ).
“Our members who operate in multiple states give DEQ high marks for being willing to work with industry and for wanting to see economic development,” said Leggett. “They not only protect the environment, but spur on economic development in a responsible manner.”
Earlier this year, Gov. Haley Barbour formed a Small Business Environmental Coalition comprised of representatives from his office, DEQ, Mississippi Development Authority, National Federation of Independent Businesses, Mississippi Economic Council, Mississippi Municipal League, construction associations and MMA to discuss ways to help small to mid-size manufacturers, who cannot afford a full-time environmental manager on staff, to easily navigate the permitting process.
As a result, the DEQ has assigned permit staff dedicated to help those businesses, implemented internal training programs for its staff, developed brochures describing in layman’s terms each type of general permit, developed an assistance page on its website, improved the language on the permitting process and added online permit applications.
Contact MBJ contributing writer Lynne W. Jeter at email@example.com.