On April 4, 1997, the Washington Post featured a front page article about the Delhi sand flower loving fly, a rare insect protected by the Endangered Species Act that is interfering with the progress of a major development strongly supported by local officials in San Bernadino County, California. At the heart of this proposed development is a 45-acre site that has characteristics uniquely suited to form the necessary habitat for preventing this insect's extinction. Because of this situation, San Bernadino County has been required by the federal government to spend approximately $4 million to move by 250 feet the "footprint "of a new hospital, which is part of the development. Also, because of growing concerns that approximately $10 million worth of municipal bonds will not be paid, construction of a nearby subdivision has been nearly halted. So here we have it. Another dispute reminding us of past conflicts involving snail darters and spotted owls, development pitted against conservation, and in this case local government against the U.S. Environmental Protection Agency (EPA). It is another case study in "environmental federalism" that is similar to others that have been part of America's political landscape for at least the quarter of a century since the creation of the EPA and passage of the National Environmental Policy Act (NEPA), the Clean Air Act, the Clean Water Act, and a host of other laws.

These laws were born out of mounting popular concerns expressed in the late 1960s and early 1970s that the natural environment was being degraded. Public outrage and alarm over environmental neglect politically manifested itself in a manner that could not be ignored by either the Nixon Administration or Congress. With the creation of the EPA and the above-named laws, the modern environmental regulatory super-structure was born. It has stayed with us and likely will always be with us, albeit in forever-evolving forms. This super-structure has received its share of criticism for being heavy-handed, meddlesome, costly, inefficient, unfair, and arbitrary. To some extent all those criticisms may be fair. But many environmental programs begun in the early 1970s have produced positive environmental results, which may explain the continuing popularity of the belief that federal, state, and local governments have their fair shares of responsibility for ensuring environmental protection. History may demonstrate that local governments have done a very large share of the work, but the experience has not been without pains. It has also produced its benefits.

Substantial evidence (at least in Virginia) demonstrates the public's continuing support for government involvement in environmental protection. Consider the 1995 survey conducted by Dick Morris Consultants indicating that substantial majorities of "likely Virginia voters"oppose any relaxations in regulations that are less protective of the quality of Virginia's natural resources. This survey, which "interviewed 1,000 likely Virginia voters chosen according to a statistically valid sample of the entire commonwealth," drew several interesting conclusions about Virginians' beliefs (see "Survey of Virginia Voters").

This survey, like many others, was probably subjected to the usual criticisms of being structured to affirm what its sponsor (the Virginia Environmental Endowment) wanted the public to believe. It cannot be ignored, however, that the survey results may have been influential in encouraging both the 1996 and 1997 sessions of Virginia's General Assembly to pass and the governor to sign major initiatives strongly endorsed by Virginia's most active pro-environmental organizations. In fact, Virginia's two most recent legislative sessions marked major departures from previous years (1991 to 1995) when the General Assembly seemed more inclined to moderate certain environmental requirements originally established during the 1980s. What does the overall political popularity of government involvement in environmental protection mean for local government officials who will continue to be affected in many different ways by federal and state environmental requirements? The remainder of this article will attempt to explore local impacts.

In recent decades a very rich and informative history of environmental policy has developed. This history can serve as a valuable guide for developing improved policy approaches in the future, especially as they relate to responsibilities that should be equitably shared by all levels of government.

CONSIDERING LOCAL GOVERNMENT IMPACTS

For the most part, the major federal and state environmental programs that have most directly affected (in a very real fiscal sense) services historically performed by local governments are sewer and wastewater treatment, the processing of water for drinking and other consumptive purposes, and solid waste management. The local delivery of each of these services has been affected by federal Water Pollution Control Act Amendments of 1972 (also known as the Clean Water Act), the Safe Drinking Water Act of 1974 (SDWA), and the Resource Conservation and Recovery Act (RCRA), which first passed in 1976. Through the two decades or more following Congress's initial passage of these initiatives, major amendments resulted in stricter standards governing discharges of pollutants from local wastewater treatment plants, the minimal amount of certain substances that would be allowed in drinking water, and the design of municipal sanitary landfills. To understand the actual fiscal impacts that all three of these programs have on local governments, it may be useful to consider estimates made several years ago by the state agencies assigned responsibility for Virginia's implementation of the Clean Water Act (CWA), SDWA, and RCRA.

CWA: In the early 1990s the staff of the State Water Control Board estimated that local governments in Virginia would need, over a 20-year period, to spend a cumulative amount of between $4.2 and $4.4 billion to comply with CWA requirements pertaining to the control of wastewater discharges and stormwater management.

SDWA: At approximately the same time, the Virginia Department of Health estimated that between 1992 and 2000, local governments in Virginia would be required to spend, cumulatively, nearly $2 billion to comply with requirements under SDWA.

RCRA: Before being absorbed by the Virginia Department of Environmental Quality, the Virginia Department of Waste Management estimated in 1992 that the 20-year cumulative costs for Virginia's local governments to comply with all existing solid-waste mandates--i.e., the installation of landfill liners, leachate collection, and gas and groundwater monitoring--would be approximately $1.8 billion.

If the total estimated costs of the programs noted above are combined and annualized, the cumulative costs incurred by Virginia localities to comply with CWA, SDWA, and RCRA could approach $600 million per year. As the local costs for these programs significantly increased, federal financial assistance to local governments dramatically decreased as a result of cuts in revenue sharing and other well-known federal budgetary actions associated with the "New Federalism" of the 1980s. A decade ago, grants from federal and state sources met approximately 70 percent of the costs of improving wastewater systems in accordance with Clean Water Act standards.

To further understand the fiscal impacts of the CWA, SDWA, and RCRA on local budgets, it may also be useful to consider that between fiscal years 1987 and 1995, cumulative spending by all of Virginia's local governments in the sub-category of "sanitation and waste removal "within local "public works "budgets increased from $171.7 million to $324.7 million. During that same period, annual per capita spending by county residents for "sanitation and waste removal" in Virginia increased from $23 in FY 1987 to $52 in FY 1995.

Specific examples of expenditures by local governments in Virginia include $100 million by Fairfax County's wastewater treatment plants for the installment of "nitrification "systems. According to Jimmie Jenkhins, Director of Systems Engineering and Monitoring for Fairfax County, the nitrification was necessary to meet new federal and state CWA standards for ammonia. A similar requirement was imposed upon the small town of Monterey, which is being pressed to incur a capital cost of $100,000 to comply with the ammonia criteria. This is a very serious expenditure for a town with a population of 300. A full assessment of these types of impacts should be considered in light of the following points that were made in a recent article appearing in Engineering News Report.

• In 1992 the U.S. Environmental Protection Agency estimated that there were $145 billion in unmet wastewater construction needs in the United States.
• The burden for meeting the capital costs of complying with requirements under the federal CWA falls directly upon the shoulders of local governments. Approximately 84 percent of the capital costs will be met through locally generated funds, and about 7 percent of the costs will be met through state revolving loan funds. This is federal money distributed to the states, which use the money to provide interest loans--not grants--to local governments. The money borrowed by localities through the State Revolving Loan Fund program must be repaid from locally generated revenues.
• Recalculated, 91 percent of the capital cost associated with meeting CWA requirements is actually paid by local taxpayers and rate payers. Through federal financial assistance, the federal government provides almost 7.9 percent of anticipated funding. State grants contribute less than 1 percent of the total.

Rates for water and wastewater services by local consumers also need to be considered. In 1993 the American Association of Metropolitan Sewer Agencies (AAMSA) estimated that the average annual household bill for wastewater services was $199, representing a 33 percent increase over the average bill paid in 1990. If present trends continue, AAMSA estimates that the average annual bill will increase to $1,500 by 2010, a 710 percent increase.

The financial impact of certain environmental mandates upon local governments needs to be considered within a larger context of other service responsibilities. In addition to environmental protection, localities are responsible for such mandated--and demanded--public services as education (a function that typically may take up about 72 percent of a local government's annual budget). Also, in the current era of what has been termed "devolution"--.e., the transfer of many service responsibilities for federal and state government to local governments--the involvement of Virginia's local governments has increased in several other areas, including welfare reform, the Comprehensive Services Act (a program requiring substantial local involvement and expenditures to address the problems of at-risk youth), and public safety. Much of the demand for increased local involvement from federal and state levels has come at a time when growth in local government revenues has been declining. The following trends recently identified by Suzette Denslow of the Virginia Municipal League illustrate this point:

• During the first half of the 1990s, revenue growth for local governments in Virginia averaged only 5.4 percent, compared with revenue growth of 9.2 percent in the 1980s and 11.4 percent in the 1970s.
• Local governments in Virginia are relying more on the revenues they can generate through their own taxing sources. In FY 1981, local governments generated 57 percent of their own revenue. By fiscal year 1995, localities were generating about 63 percent of their own revenue.
• When capital outlay and debt service expenditures are included, local spending for education exceeds state spending by a wide margin. In 1981 local spending was 136 percent greater than state spending. From 1991 to 1995, local spending exceeded state spending by an average of 155 percent.

Taken together, these factors indicate that improvements in one area of local government service will likely come at the expense of service in other areas. While decisions about tradeoffs seem largely inherent to the challenges of running a democratic government at any level-- be it local, state, or federal--the dilemma has seemed especially intense in recent years as public attitudes against tax hikes have coexisted with countervailing public attitudes that demand service improvements in such areas as education, transportation, public safety, and environment protection.

SOLID WASTE MANAGEMENT

From the mid 1980s to the early 1990s, Congress, state legislatures, and their respective regulatory agencies issued many requirements for improvements in the manner in which local governments manage municipal solid waste. Following the 1984 amendments to the Resource Conservation and Recovery Act, Virginia became very active in developing its own solid waste regulatory programs. The basic chronology of events conceivably started in 1986 with the creation of the Virginia Waste Management Board and the Department of Waste Management (absorbed by the Department of Environmental Quality in 1992.) In 1988 the Virginia Waste Management Board promulgated regulations requiring the installation of liners in sanitary landfills. Leachate collection systems, groundwater monitoring, proper closure, and capping of landfill cells also became mandatory. Additionally, these same regulations imposed capping and post closure requirements. (The 1988 requirements, which predated subsequent federal RCRA "subtitle D" regulations, were modified several years later to become nearly identical to federal requirements.)

In 1989 Virginia's General Assembly remained active in the area of Solid Waste Management by passing legislation making local governments responsible for the development of local and regional "comprehensive "solid waste plans to achieve recycling rates of 10, 15, and 25 percent by 1991, 1992, and 1993, respectively. As a penalty for not complying with state recycling requirements, a locality could not receive approval for a permit for a solid waste facility by the Waste Management Board. This legislation incorporated EPA's hierarchy of preferred solid waste management practices, meaning "all aspects of solid waste reduction" (see Section 10.1-1411 of the Code of Virginia). This hierarchy was later incorporated into the Waste Management Board's implementing regulations as "waste reduction, reuse, recycling, resource recovery (waste to energy), incineration, and landfilling" (see Virginia Regulations for the Development- of Solid Waste Management Plans, VR 672-50-01, Part II, 2.2).

All of these laws and regulations made local management of municipal solid waste more capital intensive than ever before. Virginia's local governments began responding to these requirements in different ways. Generally, they pursued at least three different strategies. A first strategy was to pursue "privatization" by entering into contracts that arranged for the export of locally generated waste for disposal into privately owned or operated facilities. The old landfills owned by these local governments would be closed prior to the deadline (originally October 9, 1991) when the new requirements would go into effect. Another strategy was for localities to continue operating their own facilities and to make the required upgrades. A third strategy was to "regionalize" services through the creation, or use, of existing public service authorities serving multiple jurisdictions. In some cases the distinctions between these approaches have not necessarily been clear. Additional strategies embodied innovative hybrid approaches, which utilized resources of both the public and private sectors.

Localities and regional authorities remaining in the business of providing solid waste management services--either on their own or through regional authorities--started to assume increasing amounts of revenue debt. For example the Southeast Public Service Authority (SPSA), which serves counties and cities in southeastern Virginia, issued approximate $270 million in revenue bonds. The Roanoke Valley Resources Authority, which serves the County and City of Roanoke along with the Town of Vinton, has an outstanding revenue bond of $32.9 million. Fairfax County and Prince William County issued revenue bonds totaling $241 million and $23 million, respectively.

The phenomenon of increased revenue debt by localities or authorities to finance "state-of-the-art "solid waste facilities became nationwide. Meanwhile, for some localities a counter trend of increasing privatization started to complicate matters considerably. Trash, and the more sophisticated facilities needed for disposal of trash, created business opportunities in the private sector. Contrary to the mistaken impression growing in the late 1980s and early 1990s of a serious shortage of landfill space, landfill capacity in Virginia was actually becoming very abundant. With publicly owned landfill space becoming less available in some of the more densely populated northeastern states, construction of new "state-of-the-art" landfills became comparatively easy in a number of rural areas in the South. Virginia became home to several new and very large "state-of-the-art" facilities (often called "megafills"), which provided sufficient capacity for disposing of the entire commonwealth's solid waste for many years to come. What resulted was a competitive situation where some jurisdictions, which had completed the necessary improvements to their own facilities, were experiencing reductions in the amount of solid waste being received in their facilities. With the competitive disposal fees they were able to offer, the large privately owned megafills became attractive magnets for private waste haulers looking for less expensive disposal sites. For publicly owned landfills, this often meant less trash received, lower revenues, and often more difficulties in paying off their revenue bonds.

In response to this growing problem and to protect their investment, some localities were starting to consider "flow control" ordinances to require that all trash generated within a jurisdiction be disposed of in that jurisdiction's preferred facilities. In May 1984, however, the U.S. Supreme Court threw a major monkey wrench into the local consideration of "flow control" by issuing its now famous decision that invalidated a flow control ordinance in Clarkstown, New York (Carbone v. Town of Clarkstown). This decision sent shock waves through all local governments in the United States that had, or were contemplating the development of, flow control ordinances. Several years before the Carbone decision, the 1991 Virginia General Assembly passed legislation that allowed local governments, in a very limited fashion, to pass flow control ordinances (See 15.1-28.01 of the Code of Virginia). Because the movement of solid waste was largely considered a matter of interstate commerce subject under the Constitution to regulation by Congress, it was determined that only Congress itself could pass legislation to reverse the effects of the Carbone decision. It has not happened, nor does it appear likely to.

What has been a major consequence of the Carbone decision for some local governments in Virginia and throughout the nation? According to information from the National Association of Counties, at least 33 counties in the United States have either experienced downgrades in revenue bond ratings, increased property taxes to subsidize the costs of running their waste management facilities, or implemented major curtailments in their solid-waste management programs. Examples of such actions exist in Virginia. Prince William County is losing $1.8 million in annual revenues. To make up for this loss, residents are now required to pay increased fees for special services. Programs the county once had to convert used landfill space to recreational grounds or to promote and expand recycling have been eliminated.

To avoid any downgrading of its bonds, the Roanoke Valley Resources Authority cut its staff, eliminated a $200,000 grants program to promote recycling in its member jurisdictions, eliminated its household hazardous waste program, and increased its membership fee by three dollars per ton of solid waste received from each jurisdiction. The Southeast Public Service Authority's (SPSA) bonds were downgraded. SPSA also lost 50 percent of its general cash balance, reduced its staff by 50 people, increased its disposal (or tipping) fee, and established a new fee for recycling.

THE FUTURE FOR "ENVIRONMENTAL FEDERALISM": WHAT MAY IT HOLD?

Over the past three decades the structure of many environmental programs has strained intergovernmental relationships. The most critical terms used by many local officials for the traditional top-down approaches of environmental federalism embodied in CWA, SDWA, and RCRA have ranged from "command and control "to "shift and shaft." With the loss of federal and state funding in the 1980s and early 1990s to meet the local costs of complying with these programs, it became fairly typical for local officials to meet with resistance any proposals of tightening environmental standards and requirements without very meaningful financial and technical assistance. This resistance may partly explain why there has been no recent success in Congress to pass legislation reauthorizing both RCRA and CWA since they were last amended in 1984 and 1987, respectively.

There may now be evidence to suggest, however, that things could be changing, and the concerns of local officials are now being seriously considered by federal and state elected officials. The 1996 Amendments to the Safe Drinking Water Act, which has received widespread praise from diverse interests, may be a benchmark of changing times. The September 1, 1997, issue of Tech Journal offered the following compliment about the way in which the legislation was developed:

Refreshing was the partnership approach used this time around to achieve consensus from the regulated community, local and state officials, and a wide array of public interest groups. For the first time, the SDWA permits EPA to base primary drinking water regulations on risk assessment and cost-benefits. Also novel was the provision for the federal grants to provide capital for state revolving loan funds that [Public Works Systems] can use to "facilitate compliance."

The 1996 SDWA Amendments authorize comparatively generous state and local funding for the upgrade of local systems. From the point of view of many local public works directors these amendments also produced more reasonable requirements for EPA to set standards for contaminants. Prior to the 1996 Amendments, SDWA required EPA to name 25 standards for contaminants every three years. The new legislation requires EPA to focus upon five "contaminant candidates" every five years. The former requirement was viewed by many public works officials as arbitrary. The new requirement has been more generally praised because it allows for a concentration of public resources and energy upon the most egregious health risks.

When considering state actions, local officials in Virginia may also feel encouraged about certain actions of the 1997 General Assembly. In 1996 no one who had been closely observing state government could have seriously predicted that in 1997 the governor and General Assembly would work cooperatively toward passing the Water Quality Improvement Act of 1997 and budgeting $15 million for a 50 percent grant funding program to assist localities in reducing nutrient loadings of nitrogen and phosphorous into the tributaries of the Chesapeake Bay. These actions may be viewed in the future as landmark initiatives that were based upon realizations by legislators that localities cannot be fairly expected to shoulder virtually all financial burdens to meet standards imposed by federal and state regulatory agencies.

Although many provisions of the 1996 SDWA Amendments and the Water Quality Improvement Act of 1997 are likely to be regarded as comparatively benign by local officials, these two measures in themselves cannot serve as a certain demarcation point where the basic underlying paradigm for federal environmental programs changed from the traditional approach of "top-down" to a new warm and fuzzy one of intergovernmental collaboration. While majorities of state and federal legislators appear to be growing more sympathetic toward local needs for funding and technical assistance, activities by the EPA suggest certain counter trends. Recently, EPA has been threatening to deny several states delegated authority to administer certain programs under the Clean Air Act and RCRA unless these states either interpret or amend their environmental audit laws more toward EPA's liking. One of these states is Virginia. Virginia has recently received more scrutiny from EPA as a result of a major restructuring of the Department of Environmental Quality (DEQ), which in EPA's view could impair DEQ's ability to administer the major federal environmental programs. According to Tom Arrandale, writing for Governing magazine, EPA has recently stepped up its scrutiny of programs in a number of states. This new "sniping" as he calls it, while going on for many years, is now "particularly dismaying . . . because EPA and the states have been moving together on some sensible steps toward real devolution of regulatory programs. "Arrandale also criticizes EPA for "depicting regulatory experiments (in certain states) as merely newfound ploys by recalcitrant states to get out of enforcing pollution standards."

Among individuals employed by Virginia's Department of Environmental Quality, the National Association of Counties, and Virginia's Office of the Attorney General, there appear to be differences of opinion regarding how seriously EPA's threats to deny delegated authority should be taken. It is also difficult to determine how these disputes may affect local governments whose officials, though seemingly powerless, need to pay attention. Under the Clean Air Act the most severe sanction for a state's noncompliance is the denial of federal transportation funding, which often produces very palpable benefits at the local level.

It is difficult to imagine a future time when public debates about major environmental issues will not be contentious, divisive, and often polarizing. Within some rules for assuring civility, debate on major environmental questions is healthy. It is healthy for members of the regulated community to professionally challenge scientific assumptions upon which certain environmental laws, regulations, and standards are based. It is also healthy for advocates for more aggressive environmental regulation to challenge contentions by the regulated community that proposed standards for improving air and water will be economically catastrophic to an industry or local community. These types of debates are part of an ongoing dialectic that has been proceeding for decades and given birth to (albeit with considerable pains) demonstrable environmental benefits as the national economy has continued on a pattern of overall growth. The factor of economic growth is an important consideration. Growing economies generate more dollars that can be easily allocated, both in the public and private sectors, for environmental protection. Consider the most recent General Assembly's passage of the Water Quality Improvement Act of 1997 (WQIA) with its related appropriation of $15 million in grant money for projects designed to reduce the flow of nitrogen and phosphorous into state waters. In this case, the budget surplus served as a major legislative lubricant that nearly eliminated the usual stridency characterizing the debate over major environmental issues. The program created through WQIA is non-regulatory, with plenty of carrots to induce potential participants to apply for Water Quality Improvement Grants. Is there a universal belief among knowledgeable observers that this program is perfect? Of course not. Does WQIA represent a potential for divisive debates about certain program details? Certainly. While imperfections in this law--as in any law--most certainly exist, all diverse organizations interested in this program appear to recognize WQIA as Virginia's most significant step forward in investing state dollars to improve water quality. This bill passed with overwhelming bipartisan support. Two main factors made this support possible: the availability of surplus funds in Virginia's treasury and the recognition by lawmakers that there is substantial public support for an enhanced governmental role in environmental protection.

The past two sessions of Virginia's General Assembly can be characterized by situations other than WQIA where certain organizations, often at loggerheads, decided to work cooperatively. For example,

• Representatives from the Sierra Club worked with representatives from the waste industry to promote legislation requiring the Department of Environmental Quality to conduct a one-year study on the amount of waste disposed of--and imported into--Virginia. (Currently, there are no reliable statistics of this nature.)
• 1986 representatives from the Virginia Agribusiness Council and the Chesapeake Bay Foundation worked together to develop the Agricultural Stewardship Act, which constituted an initial step to address various
• forms of pollution from agricultural facilities.

Naturally, other major environmental questions remain at an impasse. The debate over them will continue as all players in such disputes survive their fair shares of victories, losses, and mixed results. Rather than continue a recap of past legislative battles, it is now time to think in more visionary terms.

William McDonough, dean of the University of Virginia School of Architecture, appeared on June 17, 1997, before the General Assembly's Joint Subcommittee Studying the Future of Virginia's Environment to speak about the importance of achieving greater ecological harmony and efficiency in the design of manufacturing facilities and other structures. His highly interesting discussion emphasized the fundamental importance of "design" as a major precondition for reducing (if not virtually eliminating) waste and pollution from many different types of institutions. Similar to physical organisms, all structures and social systems have a certain "metabolism" that consumes materials and releases many forms of waste and effluent. The metabolism of social and economic institutions can become more efficient by making better use--or reuse--of the supplies they consume until, someday, the concept of "waste" might be significantly reduced if not eliminated. How is this change to occur? Not by imposing top-down government regulations, insists McDonough. The major catalyst for change will be commerce acting not out of altruism but economic necessity. Already, some major companies are redesigning their facilities and operations in ways that significantly reduce waste and pollution as corporate profits increase. The manner in which these businesses operate could become models not only for other businesses, but for many other institutions in both the private and public sectors.

This vision suggested by McDonough of pollution-free institutions (in the aggregate) creating virtually pollution-free societies stands in stark contrast to the current regulatory framework characterized earlier as "coercive, "top-down, "and "command-and-control." If McDonough is correct, he is suggesting the possibility of an exciting evolution that may be a highly attractive ideal to many local government officials who do not enjoy the dilemma of deciding whether to pay for the increased cost of environmental protection at the expense of another vitally important public service function. The idea of learning how to design or re-design factories, public facilities, offices, and entire communities in ways that prevent pollution seems almost too good to be true, especially if such designs make it unnecessary to incur future costs associated with meeting more stringent environmental standards. Such standards would already have been achieved as a function of the facility design. As stated before, some communities in Virginia, such as Northampton and Russell counties, have been thinking along these lines and are implementing "sustainable development" strategies. It will be interesting to monitor the progress of these communities.

Larry Land is director of policy development for the Virginia Association of Counties, where he analyzes the local effects of such major environmental programs as the Chesapeake Bay Preservation Act, the Resource Conservation and Recovery Act, various components of the Clean Water Act, Tributary Strategies, and the Water Quality Improvement Act of 1997. As part of his involvement in efforts to identify state and local in-frastructure needs, he co-chaired the Transportation Needs Advisory Committee, appointed by the Commission on the Future of Transportation to identify all of Virginia's long-term transportation needs. He has been appointed to numerous committees and task forces working on the development of laws and regulations related to solid waste management and water quality and has organized workshops, seminars, and conferences on solid waste management, stormwater management, and the local role in regulating agricultural practices. He is a former director of the Conference of Southern County Associations.