General Comments on the
           draft environmental impact statement (DEIS)
                    By Dr. Lynn 0. Michaelis
                         March 22, 1992
[RCAA note:  These are comments on the programmatic DEIS issued
by Puget Sound Regional Regional Commission for its 'FlightPlan'
study, a planning document prepared to justify Sea-Tac expan-
sion.  The EIS that is concerned with the details of construction
is a different, more recent document.]
Introduction
Because of my professional background, I will limit my comments
on the EIS to my professional area.  I am a professional economist, 
working for the Weyerhaeuser Co. and am President of the
National Association of Business Economists.  The comments and
criticisms in this statement do not reflect the position or con-
cerns of either organization.  Rather, they reflect my concerns
as a resident of Marine Hills in Federal Way and for the future
quality of life in the city of Seattle.
I also want to be clear, that the concerns being raised are not
to be interpreted as being anti-port, anti-business or anti-
growth.  Growth is a fact of life and should be encouraged.
However, if not correctly channeled growth can destroy. The pur-
pose of having government oversight of the growth process is that
sometimes business and the market do not capture the indirect
costs imposed on some members of society. The other perspective
government brings that is sometimes lost in the market is the
long term socially optimal solution.  Because of the way businesses 
make investment decisions, the near term dominates the
long term consequences.  The environmental assessment process is
meant to remedy that deficiency of the free market system.
Businesses in which I worked have for years been forced to
recognize external pollution problems and have been forced to
internalize those costs through pollution equipment.  The result
is cleaner air and water, but at a higher cost in the production
of the product. But clearly the result is socially desirable,
even if the regulatory approaches taken can be inefficient. The
product reflects the true cost of the product to society.  Then
society can choose how much it demands at a price that reflects
the true cost to society. I can not understand why an airport
that produces air travel and noise pollution should not be subject
to the same rules.
[Page 1]

This is at the heart of my concern and the focus of additional
before the EIS can be complete. First, the criteria being used
for selection are flawed and the data being used are inadequate
to reach the correct solution on the long term optimal solution
for Seattle. Second, the data currently being presented on costs
and benefits is one sided and extremely biased.  I hope to
demonstrate that if the full costs are taken into account, then
the "capacity problem" will disappear. Third, the data creates a
sense of urgency that is misplaced, if the pricing problem is
corrected.  Because of the pricing system being used, scarcity is
not being allocated correctly. Rather, the pricing system is
creating an artifical shortage.  Fourth, more work has to be done
on assessing the long term impact on downtown Seattle, if the
airport expansion continues at Sea-Tac rather than at a remote
airport.
Criteria being used is not correct
It appears the primary criteria for site selection is minimize
first time exposure to airplane noise.  This is a political and
not an economic criteria.  This criteria implies that max. exposure 
of people already exposed to aircraft noise is the desirable
alternative.  This criteria has to be reassessed.  A recent
article in the Seattle Times makes it clear that serious health
problems can develop, even after long term exposure to aircraft
noise.  They cited a study done recently that shows that 'even
after five years of exposure to aircraft noise, physical responses 
(higher blood pressure, higher stress levels) continues.' In
economic terms, more frequent and sustained exposure to aircraft
comes at higher and higher cost to an individual not less cost.
Where an occasional flight is a nuisance, sustained and continuous
aircraft noise has major consequences on lifestyle and
residential property characteristics.  Outside entertainment
becomes nearly impossible.  Educational activities can be
seriously impaired.  Health can be affected, not only because of
sleep interruptions, but also because of higher stress induced by
noise beyond your control.  When taken together, sustained noise
levels will eventually force those that have an option to move
away from the noise shadow of a major airport will do so.  More
importantly, if people looking for a home come to believe these
risks are possible, they will attach a stigrpa to the properties.
A number of recent studies have assessed how stigma and
pollution can affect property values.
[Page 2]

Rather than first time exposure, THE CRITERIA SHOULD BE: WHICH
SITE HAS THE LOWEST OVERALL SOCIAL COST WITH THE HIGHEST LONG
TERM SOCIAL BENEFITS.  This assessment is possible only if
realistic and complete econonomic data is available.
Develop realistic and complete economic impact information
To be able to use an economic or financial criteria, a more
complete set of economic information has to be developed.  The
data prepared so far is woefully inadequate.  Only part of the
costs associated with expanding the existing airport are considered. The
process used to estimate benefits needs to be revised, 
because they are seriously biased to the high side.
1.  There has been no information developed on the costs being
imposed on surrounding communities and residents from the
aircraft noise.  Insulation of schools and offices [is] not captured 
in the cost estimate.  Declining property values have not
even been considered.  The Port of Seattle has been willing to
purchase properties required for expansion, but does not compensate 
others that are adversely affected.  I believe a careful
assessment of adverse effects on home values in the South End in
the Noise Shadow needs to be done. Data will show there has
already been significant erosion in relative values as a con-
sequence of the airport growth. With values of $800,000 to
$2,000,000 per acre, given home values in some areas, I believe a
10% loss in relative appreciation over the next ten years will
cost homeowners in the Southend at least $800,000,000 dollars in
opportunity cost.  (This has to be refined.  I assumed 21.5 sq.
miles were adversely affected, which could be too small.) For some
areas the likely decline could be significantly more than 10%.
An estimate of insulation and school construction costs [has] to
be developed as well. Part of the final approval needs a more
complete compensation scheme for affected individuals and com-
munities. Highline School district has already submitted its
estimates of costs associated with insulating existing schools.
They have also estimated the higher costs required for newer
schools to make them compatable with aircraft noise.  Other
school districts need to be solicited for their input and poten-
tial costs.
An actual on-site noise audit also is required to truly dimen-
sion the area adversely affected. Computer simulations are inade-
quate given the change to the four post pattern and due to the
variability in actual take-off patterns.
[Page 3]

2.  Benefits listed in Working Paper #8 are biased for several
reasons. First, the projected increase ih traffic is high.
Second, the assumption of visitor share is questionable, given
the high level of commuter traffic. Third, it fails to recognize
that an airport also allows more people to leave the area, thus
draining sales dollars. Fourth, most of the growth could occur
without an additional runway if the existing one were just used
more efficiently.  The true net benefit to the expansion would be
significantly lower, even if the optimistic assumptions on traf-
fic and visitors were correct.
3.  Develop a set of scenarios on potential passenger traffic
growth at the airport.  Long term economic forecasts are risky at
best. In fact, forecasting the next decade based on the last has
been shown to be incorrect.  To reflect the uncertainty of long
term forecasts, a number of scenarios need to be developed con-
sidering the following developments. (I will submit more details
on the following if requested to do so.)
    *  Overall economic growth will be significantly lower in the
       next 20 years than in the last 20 years due to demographic
       and productivity trends.
    *  Benefits of airline deregulation have been captured
          Real cost of travel will not decline as fast (according
          to Boeing)
    *  An oil shock/shortage could significantly alter air travel
    *  Growing restraints on airports will limit the number of
       airplanes
    *  Northwest growth was uniquely strong in 1980s, much slower
       in 1990s.
        . Boeing growth will be reversed
        . Resource industries, fishing and timber, are declining
    *  Consumer surge of 1980s was unique due to policy and
       demographics
        . Aging population implies higher savings rate
        . Debt leverage and tax cuts of 1980s being reversed
    *  Technology will reduce business travel in 1990s
        . Video conference lowers business costs (recent WSJ)
        . Business traveler crucial to lower fares for tourists
        . Forces higher travel cost and lower growth for tourist
          trade
[Page 4]

IF CORRECTLY DONE, A FEW SCENARIOS WOULD HELP TO ASSESS
ALTERNATIVES AND THE SENSE OF URGENCY OF THE EXPANSION.
Growth will occur, but what if the likely growth is to 30 million by
2020, rather than 45 million.  The estimating procedure used by
KPMG Peat Marwick did not consider the above factors, but appears
only to have used population and income.  If so, the approach is
woefully inadequate.
4.  Net Benefits to Local Government have to be reassessed.  The
drop in property values will lower tax revenue in affected com-
munities and to King Co. Further, the government needs to esti-
mate the cost of building the support infrastructure for the
airport.  Similar to approaches being used with residential deve-
lopers, the Port should have to fund part of the infrastructure
cost to feed its development.  This is important for two reasons.
First, it will insure that the operating cost of the airport and
the price of airplane operation correctly reflect the true
operating cost of the airport.  Second, it will make the trade-
off between an urban airport and rural airport more soundly based
on economic costs rather than on emotional appeals, such as 'pro-
tects open spaces, sensitive areas, and farm lands'.  This is
currently viewed as an unfeasible alternative and too costly,
only because the full costs at Sea-Tac are not captured in the
DEIS.

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[RCAA NOTES:  A few minor typographic & spelling corrections have
been made in the foregoing document.  Numbers in square brackets
indicate the page break in the original document.]