The purpose of this report is to analyze the economic impact of existing Aquatic Invasive Species (AIS) on businesses and households in Great Lakes states. We explore the economic impact of AIS from two perspectives. First, we examine the existing evidence of AIS-related costs to households and businesses. Second, we identify the set of industries most directly affected by AIS in the region and quantify their size.
Overall, we find that AIS disrupt economic activity on a large scale in each of the Great Lakes states. AIS impose real costs on industries, consumers, and governments. Costs to individual companies and households include direct expenditures on combating an invasive species or repairing the damage it has done, and include indirect costs such as reduced productivity and higher prices in industries particularly affected by AIS. Governments and private actors such as nonprofits also devote significant resources to addressing AIS.The industries most acutely affected by AIS include sport and commercial fishing, water treatment, power generation, industrial facilities using surface water, and tourism. Together, these industries employ over 125,000 workers in the Great Lakes region.
While comprehensive cost estimates (including all industries, species, and waterways of the Great Lakes region) are not available, there are many individual estimates focusing on part of the problem. These cost estimates range from millions of dollars in cost and lost output for individual large industrial and power facilities to hundreds of dollars annually spent by individual households to control AIS on their property. It is likely that the overall aggregate level of cost to the Great Lakes region is significantly over $100 million annually.
This document is a re-issue of a report originally released in 2012, including several corrections and clarifications.
In early 2006, Anderson Economic Group was retained by L. Brooks Patterson and the campaign committee titled “Repeal SBT,” to draft an initiated law that would repeal the Michigan’s decades-old Single Business Tax, which had gross revenue of approximately $2 billion. The SBT was the only value-added tax in the US, and had become riddled with special provisions and alternate tax calculations. It was widely derided as the “small business tax” because such enterprises were often required to pay tax even when unprofitable, and were not the intended beneficiaries of many special provisions.
Patrick Anderson drafted an initiated law to repeal the tax, affirm existing tax obligations, and provide for a transition to new tax structure. The March, 2006 memo outlines the statutory language, proposed ballot description, purpose of specific provisions, effective date of repeal, and transition issues related to the payment of taxes by businesses.
The ballot committee relied upon this language, and circulated petitions that were signed by over 291,000 citizens. Under the Michigan Constitution, this placed the initiated law before the legislature for adoption or rejection, and to the voters if the legislature failed to adopt it. Both houses of the Michigan legislature passed the initiated law in August 2006, and it became Public Act 325 of 2006.
The publication available here contains the original March 2006 memo, and the codified law.