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New State Budget Continues Severe Rendell Cuts To Environmental Protection

The Senate and House gave final approval and Gov. Corbett signed the FY 2011-12 General Fund budget bill-- House Bill 1485 (Adolph-R-Delaware)-- this week spending $27.1 billion, a 4.1 percent reduction in spending from the FY 2010-11 funding levels and without any tax increases.

            On the Marcellus Shale drilling impact fee issue, bipartisan efforts in the House and Senate fell apart after Gov. Corbett specifically threatened to veto any impact fee bill sent to his desk before the Governor's Marcellus Shale Commission submits its report July 22.  (see separate story)

             There are no provisions for re-funding the Growing Greener Program which became all but bankrupt this year.  Just $6 million in Growing Greener funds will be available for the next round of grants, down from its peak of $50.1 million in 2001.  (see separate story)

            The only bright spots in the budget were the Resource Enhancement and Protection (REAP) Farm Conservation Tax Credit Program which was restored to its full $10 million in funding and a transfer of $15 million from the PA Infrastructure Investment Authority to the H2O Water Infrastructure Program administered by the Commonwealth Financing Authority included in the Fiscal Code bill.  The transfer does not represent a net gain in funding.

            For those keeping track, a total of $1.5 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 nine years.   (see separate story)

             Just hours after Gov. Corbett signed the FY 2011-12 state budget, the Department of Revenue announced the state collected $785.5 million more in revenue than they estimate.

            This year the entire budget was negotiated by Senate and House Republicans and the Corbett Administration without input from the Democratic minorities in either chamber, a point Democratic members made over and over, and over, again.

            Interestingly, neither Senate President Pro Tempe Joe Scarnati (R-Jefferson) nor Senate Majority Leader Dominic Pileggi (R-Delaware), both with Marcellus Shale impact fee proposals pending, attended the 11:45 p.m. budget signing ceremony with Gov. Corbett on June 30.  House Speaker Sam Smith (R-Jefferson) and House Majority Leader Mike Turzai (R-Allegheny) did attend.

            Funding for both the departments of Environmental Protection and Conservation and Natural Resources were slight below the proposal made in March by Gov. Corbett:  DEP- $4.5 million less for a total cut of $10 million and DCNR- $3.1 million less.

            Gov. Corbett had proposed increasing DCNR's budget by $2 million, but made up for cuts elsewhere in State Park and State Forest operations budgets by transferring monies from the Oil and Gas Fund fed by Marcellus Shale gas development leases on State Forest land.

             There were no raids on other environmental funds, like the Oil and Gas Fund, Keystone Recreation, Park and Conservation Fund, the Recycling Fund or the Storage Tank Fund to help balance the state budget like there were during the Rendell Administration.

            Complement levels at DEP were reduced from 3,211 in FY 2002-03 to 2,776 now, even less if you take out the 105 positions DEP added for the Marcellus Shale drilling inspection and permit program

             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.

             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 new budget will further reduce DEP complement levels by 69 positions.            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.

            Complement levels at DCNR were 1,391 in FY 2002-03 to 1,389 positions of which 1,289 positions are filled.

            Fiscal Code

             Accompanying the General Fund budget was Senate Bill 907 (Browne-R-Lehigh) amending the Fiscal Code which includes an omnibus amendment designed to implement the budget agreement.  The bill includes a transfer of $15 million from the PA Infrastructure Investment Authority to the H2O Water Infrastructure Program administered by the Commonwealth Financing Authority.

            House Republicans put out a summary of the General Fund budget as well as a line item summary of appropriations.  House Democrats put together their own view of the Republican General Fund budget.

          Budget Highlights

Resource Enhancement and Protection Farm Conservation Tax Credit: $10 million, increase of $5.5 million.

H2O Water Infrastructure Program: Transfer of $15 million from the PA Infrastructure Investment Authority to the Commonwealth Financing Authority, no net gain.

Environmental Protection
Total General Fund Appropriations: $135.4 million, decrease of $10 million
General Government Operations: $10.7 million, decrease of $2.3 million
Environmental Program Management: $28 million, decrease of $1.4 million
Environmental Protection Operations: $78.1 million, decrease of $1.3 million
Chesapeake Bay Agricultural Source Abatement: $2.7 million, decrease of $76,000
Flood Control Projects: zeroed out, decrease of $3.4 million
Sewage Facilities Planning Grants: $779,000, decrease of $87,000
Sewage Facilities Enforcement Grants: $2.5 million, decrease of $49,000
Conservation Districts: $2.8 million, decrease of $29,000

Conservation & Natural Resources
General Government Operations: $17.1 million, decrease of $1.5 million
Heritage and Other Parks: zeroed out, $350,000
Note: Decreases of $19.1 million in State Parks Operations, and $6.1 million in State Forest Operations were offset by transfers from the Oil and Gas Fund from Marcellus Shale production revenues.  Total State General Fund Appropriations: $55.2 million, were 82.4 million.

Agriculture
General Government Operations: $26.4 million, decrease of $472,000
Conservation Districts: $1 million, decrease of $10,000
Nutrient Management Administration: zeroed out, decrease of $300,000
Nutrient Management Fund: $2.74 million, no change
Note: funding for Penn State Extension and other line items were transferred into the Agriculture budget raising the overall General Fund Appropriation from $62.8 million to $133 million

State System Of Higher Education
PA Center for Environmental Education: zeroed out, $368,000
McKeever Environmental Center: zeroed out, $213,000

Community & Economic Development
Land Use Planning & Technical Assistance: zeroed out, decrease of $358,000
Floodplain Management: zeroed out, decrease of $56,000

            NewsClips: PA Ends Fiscal Year With Higher-Than-Expected Tax Revenues
                                Rep. Markosek: Revenue Surplus Exceeds $785 Million
                                Corbett's First Budget Signed On Time
                                State Budget Cuts May Affect Drilling Regulations
                                State Budget Defines Losers, Winners
                                Analysis: PA Budget Plan Is Lean And On Time
                                Part Of Legislative Surplus Earmarked
                                Amid PA Cuts, $437 Million Goes To Private Projects
                                Re-Funding Growing Greener - Rep. Kate Harper
                                With Funding Cut, PSU Expects To Curtail Agriculture Research
                                Corbett Says He Would Veto Impact Fee Sent Now                              
                                Shale Impact Fee Push Sputters Out
                                Shale Drilling Fee Again Off Table In Budget Talks
                                Debate On Gas Drillers' Impact Fee Put Off
                                Natural Gas Levy Vote Pulled From House Agenda
                                No Go On Natural Gas Drilling Impact Fee
                                State Official Argues For More Funds To Keep Eye On Drilling
                                Impact Fees, Somewhat New Idea
                                Marcellus Fee Plans Largely Benefit 8 Drilling Counties
                                Op-Ed: Refunding Growing Greener
                                Editorial: Tax The Frack
                                Editorial: No Drilling Tax?  Just Give Us Free Natural Gas 

Related Stories
Marcellus Shale Impact Fee Loses Another Round In 3 Year Battle
Over Last 9 Years: $1.5 Billion Cut/Diverted From Environmental Protection Programs 


7/4/2011

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