Governor's Budget Tuesday, How Will It Compare To Last 8 Years?

Gov. Tom Corbett submits his first budget to the General Assembly Tuesday in the most challenging economic conditions Pennsylvania has faced since the Great Depression.

           The state faces at least a $4 billion budget deficit next fiscal year and Federal stimulus funds will not be available to fill budget gaps.  The new Administration already put an additional $364.3 million in state funds in budgetary reserve, including $669,000 from DEP.
            While revenue growth is 1.6 percent above estimates so far this fiscal year, it will do little to make up for the state deficit.
            Other funding gaps have also been identified.
            A Legislative Budget and Finance Committee report released in March 2010 revealed Growing Greener funding is all but depleted.  Soon, as much as three-fourths of the Growing Greener I funds will be used for debt service on Growing Greener II bonds.  Funding for Growing Greener programs are expected to drop from $200 million in 2007-2008 to as little as $15 million in FY 2011-2012.
            Growing Greener funds were used to cleanup abandoned mines, reduce nutrient runoff from farms and plug abandoned wells that pollute over 16,547 miles of streams in Pennsylvania.
            The Renew Growing Greener Coalition is calling on the Governor and General Assembly to refund this program through a reduction of the funds pulled from the Environmental Stewardship (Growing Greener) Fund to pay debt service, at least as a first step.
            According to a new Morning Call/Muhlenberg College poll reported Friday, one option for funding Growing Greener and environmental programs-- a severance tax on Marcellus Shale natural gas production-- is supported by 57 percent of respondents.  A severance tax is opposed by Gov. Corbett and many in the Senate and House.
            This all comes at a time when Pennsylvania is facing real and significant environmental cleanup challenges the state cannot avoid.
            For example, in December, the U.S. Environmental Protection Agency issued the final TMDL for the Chesapeake Bay Watershed agreeing with the commitments Pennsylvania made to cleanup the watershed.  Most of those commitments are not funded.

            8 Years Of Environmental Cuts
            Of necessity, the budget Gov. Corbett will submit Tuesday must be looked at through the filter of these economic conditions, but also compared to the record of the last 8 years.
            For eight straight years Gov. Rendell's proposed budget included cuts for the departments of Environmental Protection and Conservation and Natural Resources.
           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.
            The FY 2010-11 budget preserved those cuts.
            Complement levels at DEP were reduced from 3,211 in FY 2002-03 to 2,835 now, even less if you take out the 105 positions DEP added for the Marcellus Shale drilling inspection and permit program.  2,615 of the present 2,835 are now filled positions, the others are vacant as a result of a hiring freeze.
            In addition, over 100 DEP Air, Waste and Water Quality field staff use all or part of their time 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.
            Complement levels at DCNR were 1,391 in FY 2002-03 to 1,389 positions of which 1,289 positions are filled.
            During the last eight years of the Rendell Administration, DEP's General Fund budget has been cut by 40.9 percent ($245.6 million to $147 million), DCNR by 23.7 percent  ($108.8 million to $82.4 million) and the Department of Agriculture by 35.2 percent ($76.1 million to $62.8 million) from the FY 2010-11 to FY 2002-03 budget.
            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.
            Record Of Funding Cuts/Diversions
            A total of $1.3 billion has been diverted or cut from environmental programs to help balance the state budget or to fund programs that could not get funding on their own over the last eight years.
-- $428 million in Act 339 grants intended to support wastewater plant operations over the last eight years were eliminated to balance the budget;
-- $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;
-- $121.8 million in FY 2007-08, 2008-09, 2009-10, 2010-11 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 proposed 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; and
-- $669,000 from the Safe Water line item in DEP's budget.
            Energy, Environmental Policy Choices
            For more on the energy and environmental choices made over the last 8 years, see these remarks delivered on February 26 at the Environmental Awareness Conference at Mansfield University.
            NewsClips: Budget Secretary Says Day Of Reckoning Has Arrived
                                Budget Head Warns Of Sharp Cuts In New Spending Plan

                                Projected State Revenue A Guesstimate At Best
                                No Plans For DEP, DCNR Merger
                                Op-Ed: $300 Million Goes Uncollected From Online Retailers
                                Blog: New Corbett Budget Will Not Have Gimmicks Of The Past
                                Editorial: Brace Yourself, Corbett Cuts Are On The Horizon

            Video- The Budget Address Will Be Carried Live By PCN


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