State Budget

2012-13 Proposed Cuts Could Mean $1.8B Diverted/Cut from Environmental Programs Over Last Decade

DCNR Secretary Message

Presentation by John Quigley, Former DCNR Secretary

If Gov. Corbett’s proposed FY 2012-13 budget would have been approved as is, it would have extended the record set by Gov. Rendell in cutting environmental programs, which started in his very first year in office, to over $1.8 billion over the last 10 years.

Gov. Rendell’s share of these cuts/diversions is $1.4 billion. Gov. Corbett’s share is $376.5 million, so far. That’s $1.8 billion diverted or cut from environmental programs to help balance the state budget or to fund programs that could not get funding on their own.

Here’s an itemized list of the cuts and diversions:

  • $533 million in Act 339 grants intended to support wastewater plant operations over the last nine years were eliminated to balance the budget ($52 million or so each year);
  • $143 million diverted from the DCNR Oil and Gas Fund to balance the FY 2008-09 budget;
  • $79 million cut from the DEP and DCNR General Fund budget during FY2009-10;
  • $60 million diverted from the DCNR Oil and Gas Fund to balance the FY 2009-10 budget;
  • $100 million in 2002 from the Underground Storage Tank cleanup insurance fund to balance the budget (although this is slowly being repaid over 10 years);
  • $52.7 million “one-time” diversion from the Keystone Recreation, Parks and Conservation Fund in 2006 to balance the budget;
  • $50 million in 2007 and 2008 from the Environmental Stewardship Fund, which supports mine reclamation and watershed restoration, to fund the Hazardous Sites Cleanup Program because there was no agreement on how to fund that program;
  • $201.9 million in FY 2007-08, 2008-09, 2009-10, 2010-11, 2011-12, 2012-13 from the Environmental Stewardship Fund to pay debt service on the Growing Greener II bond issue and taking funding away from restoration projects each year for the next 25 years – reflecting a pattern of only environmental programs being required to address their own bond debt service;
  • $15 million from the Recycling Fund in to balance the FY 2008-09 budget;
  • $18.4 million put into budgetary reserve in 2008-09 from the Department of Environmental Protection and Department of Conservation and Natural Resources;
  • $5 million reduction in Resource Enhancement and Protection (REAP) farm conservation tax credit program in FY 2009-10;
  • $102.8 million cut from the DEP and DCNR General Fund budget in FY 2010-11 budget;
  • $180 million diverted from the DCNR Oil and Gas Fund to General Fund in proposed FY 2010-11 budget;
  • $5.5 million reduction in Resource Enhancement and Protection (REAP) farm conservation tax credits in FY 2010-11;
  • $5 million in additional cuts to the agencies to balance the FY 2010-11 budget;
  • $3.9 million in across-the-board cuts to help fill gaps caused by reduced federal Medicaid appropriations– $2.4 million from DEP, $1.5 million from DCNR;
  • $669,000 from the Safe Water line item in DEP’s budget;
  • $102.8 million cut continued from the FY 2010-11 DEP and DCNR General Fund budget in FY 2011-12 budget;
  • $8.3 million Mid-year budget freeze cuts additional resources for environmental programs: Agriculture: $2.6 million; DCNR: $1.5 million; and DEP: $4.2 million.
  • Governor’s proposed FY 2012-13 budget eliminates $36.1 million in funding for DCNR from the Keystone Recreation, Parks and Conservation Fund. (Note: this funding was restored for 2012-13)
  • Governor’s proposed FY 2012-13 budget eliminates $10.5 million in General Fund monies from DEP, and $2.5 million from DCNR.
  • Governor’s proposed FY 2012-13 budget continues the $102.8 million cut made by Gov. Rendell beginning in FY 2010-11.
  • Governor’s proposed FY 2012-13 budget takes $20.5 million in Cigarette Tax revenue previously earmarked for agricultural land preservation and puts it in the General Fund to balance the budget. (Note: this funding was restored for 2012-13)
  • Governor’s proposed FY 2012-13 budget takes $6.5 million in Utility Gross Receipts Tax revenue normally transfered to the Alternative Fuels Incentive Grant Fund and puts it in the General Fund.
  • Governor’s proposed FY 2012-13 budget for the State System of Higher Education zeroes out funding again for the PA Center for Environmental Education ($368,000) and McKeever Environmental Center ($213,000).

DEP/DCNR Staff Cuts

DEP’s authorized complement is now 2,759, down from 2,770 last year and 3,211 in FY 2002-03, and DCNR’s is now 1,375, down from 1,389 last year and 1,391 in FY 2002-03.

The FY 2012-13 proposal includes a reduction of 14 positions in DCNR and 11 positions in DEP.

In addition, the Rendell Administration used over 100 DEP Air, Waste and Water Quality field staff to act as managers for federal stimulus projects, projects funded by the Energy Harvest and PA Energy Development Authority programs taking time away from permit reviews, inspections and compliance activities.The FY 2009-10 budget cuts alone required DEP and DCNR to furlough or eliminate 333 full time positions. DCNR had to eliminate or reduce hours for 1,131 seasonal workers, putting appropriations for DEP at 1994 levels and for DCNR at 1995-96 levels.

One result of all these cuts is the permit review backlog DEP said was already building in 2009 and in truth the last 7 years, delaying hundreds of millions of dollars in economic development projects across the state.

Of course, DEP and DCNR still have the same amount of work to do, the same laws to enforce and State Forests and State Parks to protect and manage.

In the case of DEP, they face the further challenge of new programs to get up and running, like the electronics recycling program, and the continuing challenges of regulating Marcellus Shale drilling.

General Fund Budget Perspective

The state’s General Fund budget has always been a huge part of how environmental programs and agencies are funded, but that has changed dramatically over the last 9 years.

In most cases, General Fund cuts to DEP and Agriculture resulted in significant staff reductions with only a small portion being made up in things like permit review fee increases. In the case of DCNR, monies from the Oil and Gas Fund fed by Marcellus Shale drilling revenues on State Forest land made up many of the losses.

Here’s some perspective:

  • Dept. of Environmental Protection:
    • General Fund FY 2002-03: $728.2 million
    • General Fund FY 2012-13: $124.8 million (Proposed)
  • Dept. of Conservation & Natural Resources:
    • General Fund FY 2002-03: $322.9 million
    • General Fund FY 2012-13: $52.7 million (Proposed)
  • Department of Agriculture:
    • General Fund FY 2002-03: $274.3 million
    • General Fund FY 2012-13: $56.2 million (Proposed)
Permit Review Fees

The Department of Environmental Protection in particular has been trying to make up for some of the General Fund budget cuts finalizing about $27.8 million in fee increases over the last 18 months as a result of Rendell Administration initiatives:

  • Marcellus Shale Drilling Permits: $7,465,000 (from $935,000 to $8.4 million annually);
  • NPDES Water Quality Permits: $4,250,000 (from $750,000 to $5 million annually);
  • Chapter 102 Regulations: $6,665,000 (from $635,000 to $7.3 million annually);
  • Laboratory Certification: $1,550,000 (from $500,000 to $1.6 million annually);
  • Beneficial Use of Coal Ash: $75,000 annually; and
  • Uniform Environmental Covenants: $82,250 annually.

Another fee package for Air Quality Permits was adopted as final by the Environmental Quality Board in November 2010. The new fees would have raised $7.8 million (from $19,570,000 to $27,408,000 annually).

Although adopted as final by the EQB, DEP has decided not to take the steps needed to publish them as final in the PA Bulletin and they are considered withdrawn. The Governor’s Office Regulatory Agenda published in the PA Bulletin on February 11 says a new Air Quality permit fee package will be proposed in the Spring of this year. (PA Bulletin page 887)

DEP also proposed additional fee increases totaling just over $7 million in the last 18 months, again all in the Rendell Administration:

  • Coal Surface Mining Permits: $350,000 (from $50,000 to $400,000 annually), the fees were published as proposed for comment and are still with DEP for finalization;
  • Non-Coal Surface Mining Permits: $2,475,000 (from $25,000 to $2,500,000 annually), DEP just solicited additional public comments on the fee package; and
  • Dam Safety and Water Management Permits: $4,267,612 a year (dam safety would increase to $1,390.850 from $28,000 and waterway management permit fees income would increase to $2,952,612 from $47,850) [Note: these revenue numbers were revised downward from the original Fee Report Form published with the proposed regulation in December 2010.];

In December DEP took action to withdraw proposed Drinking Water permit fee increases adopted by the Environmental Quality Board in November 2010 which would have generated $8.1 million (from $250,000 to $8,385,000 annually).

Reprinted with permission from PA Environmental Digest (a service of Crisci Associates), 2/10/2012.

Advertisements
%d bloggers like this: