Gov. Wolf Proposes New Budget With Little New For The Environment
Gov. Tom Wolf Tuesday proposed a $32.3 billion General Fund budget which he said includes $2 billion in cuts and savings resulting from reinventing and reforming the way the public’s money is spent and $1 billion in new taxes, mostly on business.
The proposal does include more funding for cleaning up Pennsylvania’s rivers and streams flowing into the Chesapeake Bay, but goes back to relying on using the Oil and Gas Lease Fund to pay for DCNR’s administrative expenses.
It also proposes a several part plan to fund the continuation of the Hazardous Sites Cleanup Program through several fund transfers.
The proposed budget does not end the downward spiral of funding and staffing at the Department of Environmental Protection.
Here are some highlights--
-- Chesapeake Bay Watershed Restoration Funding: The 3 year bond funding proposed by the Governor includes $15 million per year for-- DEP-- $8.3 million for farm conservation measures, DCNR-- $2 million for riparian buffers and Agriculture-- $4.7 million for erosion and sedimentation plan development) to fund watershed restoration work.
-- Environmental Stewardship (Growing Greener) Fund Cut: The Governor’s plan for this Fund has several parts--
-- The required transfer of $35 million in Act 13 drilling impact fees into the Fund is cut to $25 million;
-- A new proposed $37 million transfer out of the Fund to DCNR’s Oil and Gas Lease Fund to then allow the transfer of funding to the Hazardous Sites Cleanup Fund. The Oil and Gas Lease Fund would resume its role of funding DCNR operations;
-- A proposal to backfill the new money transfer out of the Fund by floating a new $387.4 million bond issue through the Commonwealth Financing Agency part of which would give the Growing Greener Fund $52 million in 2017-18, $53 million in 2018-19 and $54 million in 2019-20. The current year Growing Greener funding is $57 million.
-- After 3 years the funding would revert to existing levels since Environmental Stewardship Fund revenue sources would continue to go into the Fund.
Here’s a quick summary of DEP’s proposed funding--
-- General Fund Support Plummets: General Fund support for its programs dropped from $245.6 million in 2003 (14 years ago) to $148.8 million this year-- a 40 percent drop-- and is significantly below 1994 levels-- $165.6 million (23 years ago). In FY 2017-18 General Fund support would increase slightly to $152 million.
DEP has attempted to make up for these cuts by significantly increasing permit review fees and adopting new annual permit administration fees. DEP is also more reliant on federal funds to keep its programs going.
-- Number Of Staff Plummets: The number of staff at DEP is 802 below where it was in 2003-- a 25 percent drop- and 778 below where it was in 1994. DEP has shifted its staff from other programs, particularly water quality protection, to what has become its largest program-- Oil and Gas Management.
-- Total Budget Retreats To 2002-03 Levels: In total, DEP’s budget is just $600,000 below where it was in 2003, essentially retreating 15 years. While it is $198.1 million more than in 1994, that funding is primarily grants given out to others from the Growing Greener and Act 13 drilling fees, for example, and increases in federal funding and permit fee revenue.
-- Cannot Enforce Minimum Federal Standards: DEP’s Safe Drinking Water, Air Quality, Surface Coal Mine Regulation, Chesapeake Bay, Drinking Water and Clean Water State Revolving Fund and other programs have all been warned they lack sufficient staff resources to enforce minimum federal standards required by primacy and DEP (rather the General Assembly and the Governor) need to address these deficiencies.
-- Major Sources Of Funding: Overall, roughly 22 percent of DEP’s costs are funded by the General Fund, 28 percent are federal funds and 50 percent come from permit review and administration fees and a small percentage from penalties.
Here’s a chart comparing the current and past budget years.
Department of Conservation & Natural Resources
As noted, the FY 2017-18 budget returns to using revenue in the Oil and Gas Lease Fund to support DCNR’s administrative expenses. Here are some highlights--
-- General Fund Support Plummets: General Fund support for DCNR dropped from $108.8 million in 2003 to a low of $14.5 million in 2014-15, but was bumped up again in 2016-17 to $59.9 million, but is down to $53.7 million. Much of the drop was made up by pulling money from DCNR’s Oil and Gas Lease Fund to support personnel and operating costs, rather than promoting long term conservation objectives.
-- Number Of Staff Drops: DCNR staffing levels now-- 1,312-- are below the 2003 complement level of 1,391 and approaching 1994 levels of 1,275.
-- Total Budget Up, But: While DCNR’s total budget is up since 2003-- $47 million in 14 years-- and significantly since 1994, the added funding has come from more grant programs like Growing Greener and Act 13 drilling fees, its own Oil and Gas Lease Fund revenues and an increasing dependence on federal funds.
Here’s a chart comparing the current and past budget years.
-- *Complement numbers as of December 1, 2016 (Right-To-Know Requests)
The proposed budget retains existing environment-related tax credits, and increase others. A quick view--
-- $10 million Resource Enhancement and Protection (REAP) Tax Credit
-- $10 million Coal Refuse Energy and Reclamation Tax Credit
-- $3 million Historic Preservation Incentive Tax Credit
-- $1.5 million Waterfront Development Tax Credit
-- No changes to Education Improvement Tax Credit, Entertainment Production Tax Credit
There is a 6.5 percent severance tax on natural gas production raising about $293.8 million, but there’s nothing for the environment. The amount paid in unconventional gas well impact fees can be taken as a credit against the new tax.
Overall Reductions Since 2003
From 2003 through 2015, the General Assembly and several Governors cut or diverted over $2.4 billion of environmental funding to help balance the budget or to support programs that could not get funding on their own.
Click Here for Governor’s Executive Budget Document (the big book). Click Here for a copy of the proposed FY 2017-18 budget spreadsheet. Click Here for Budget Secretary’s presentation. Click Here for Gov. Wolf’s budget address. Click Here for proposed legislation to implement the FY 2017-18 budget.
Click Here for House Democratic Appropriations Committee summary of the proposal.
[Posted: Feb. 7, 2017]
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