PA Environment Digest Blog: What’s In Gov. Wolf’s New Budget For The Environment? Not Much

Gov. Tom Wolf Tuesday proposed a $32.7 billion General Fund budget along with $2.7 billion (Republicans say a $3.6 billion) increases in personal income, Sales, tobacco, Bank Shares and insurance premium taxes.
He also proposed a new severance tax on natural gas production, with a credit toward the drilling impact fees paid, to go into the General Fund, and an increase in the state waste disposal fee from $7.25 to $9.00/ton.

The proposal includes $50.9 million in additional funding for the Department of Conservation and Natural Resources to take another step toward weaning the agency off the Oil and Gas Lease Fund revenue.

The proposed budget would increase the state waste disposal fee by $1.75/ton with the resulting $35 million in revenue to be deposited in the Oil and Gas Lease Fund (page H48) to help make up for the loss of revenue from DCNR natural gas royalties to the Fund.

The existing and new waste fees are also proposed to be expanded to construction and demolition and residual waste which are not now covered. Captive waste landfills would remain exempt from the per ton waste fees.

The current fees are $4.25/ton to pay debt service for the Growing Greener II bond issue (it was used annually to fund Growing Greener Projects), a $2.00/ton recycling fee and a $1.00/ton minimum host community benefit fee.

The fee increase and expansion are necessary to allow the continued transfers out of the Oil and Gas Lease Fund to the Environmental Stewardship (Growing Greener) Fund and the Hazardous Sites Cleanup Fund required by Act 13.

$35 million is to be transferred to the Environmental Stewardship Fund and $15 million to the Hazardous Sites Cleanup Fund in FY 2016-17.
A change in law is needed to raise and expand the waste disposal fee. If the fee increase is not enacted, there will be reduced funding available for both the Growing Greener and Hazardous Sites Cleanup programs.
What Wasn't Proposed

What Gov. Wolf did not propose was any way to fund the Chesapeake Bay cleanup program reboot the Administration announced on January 21.
That announcement said, “obtaining additional resources for water quality improvement by participating in planning a new round of “Growing Greener” funding, which will have Bay compliance as a primary goal, potentially making available several hundred million dollars to devote to local water quality issues and ultimately Bay compliance” was a priority in the strategy.

What the Governor proposed was a cost-to-carry budget, with only a few small environmental initiatives--

-- $2 million to fund eFACTS permit information system replacement at DEP;

-- 2 new positions for Covered Device (electronics waste) Recycling Act Administration at DEP for a total of 2,691 full-time positions, although the freeze imposed by the Governor’s budget office prevents 200 vacancies from being filled;

-- $2.5 million increase in PA Conservation Corps at DCNR;

-- 1 new position for PA Conservation Corps for a total of 1,427 full-time positions, although the freeze imposed by the Governor’s Budget Office prevents vacancies from being filled;
-- $0 for Heritage Parks Program; and

-- $0 funds will be transferred from the Marcellus Shale Legacy Fund to DEP in FY 2016-17, $10.3 million was transferred in FY 2015-16.
The Governor did not mention the environment once in his remarks.

5 Things To Look For

Of the five major items the Digest said to look for last week, the three big ticket items were a disappointment--

1. Will The Downward Spiral Of Funding/Staff For DEP Change? No, the Governor proposed a cost-to-carry budget with an increase of 2 positions in DEP’s complement for the Covered Device (electronics waste) Recycling Act and 1 position at DCNR.

2. Will The Next Growing Greener Proposal Focus On Restoring The Environment? There is no next generation Growing Greener funding program announcement in the Governor’s budget proposal.

3. Investing DCNR’s Oil & Gas Fund In Conservation, Not Operations: Yes, the Governor’s proposal includes another $50.957 million to shift funding for administrative costs from DCNR’s Oil and Gas Fund.

4. Keep The Keystone, Recycling, Storage Tank And Other Environmental Funds Whole: Yes, based on what we know now.

5. Will A New Severance Tax Proposal Return Drilling Revenues To Help The Environment?: No. A 6.5 percent natural gas severance tax was proposed, with a credit for Act 13 drilling impact fees paid, would go into the General Fund.

Given the fact Gov. Wolf said he based his FY 2016-17 budget on the “agreed-to” budget framework, comparing his budget proposals to previous budgets gets complicated.

To simplify the comparison, here are a series of charts that presents budget numbers in each of the categories: FY 2014-15, the “agreed-to” budget framework, the Republican-passed budget Gov. Wolf signed in December, the “as signed FY 2015-16 budget Gov. Wolf line-item vetoed and the Governor’s FY 2016-17 budget. (Click Here if you cannot read the charts correctly.)

“Agreed-To As Signed Governor’s

DEP FY 2014-15 Framework” GOP Budget FY 2015-16 FY 2016-17

General Operations	12,432	13,126	13,376	13,376	16,032
Env. Program	28,517	29,522	28,277	28,277	31,085
Env. Protection	84,438	89,305	87,172	87,172	92,190
Conservation Dist.	2,506	2,506	2,506	2,506	2,506
Sewage Facilities	0	610	900	0	0
DEP CAC		250	0		0
Total G.F.	139,233 [or 141,488]**	147,555	143,520	142,620 [or 148,824]**	156,248

Source: Governor’s Budget Office- December Tracking Run

**Source: Governor’s 2016-17 Executive Budget Document

Initiatives/Changes:

-- $0 funds will be transferred from the Marcellus Shale Legacy Fund to DEP in FY 2016-17, $10.3 million was transferred in FY 2015-16.

-- $2 million to fund eFACTS permit information system replacement

-- 2 new positions for Covered Device Recycling (electronics waste) Act Administration for a total of 2,691 full-time positions, although the freeze imposed by the Governor’s Budget Office prevents 200 vacancies from being filled.

“Agreed-To As Signed Governor’s

DCNR FY 2014-15 Framework” GOP Budget FY 2015-16 FY 2016-17

General Operations	5,809	12,313	12,313	12,313	19,552
State Parks	2,276	34,297	33,297	33,297	62,450
State Forestry	1,050	11,195	11,195	11,195	36,104
Heritage Parks	2,250	2,750	2,250	0	0
Total G.F.	14,527	63,697	62,197	59,947	121,293

Initiatives:

-- $50.957 million to shift funding for General Operations, State Parks, Forests from the Oil & Gas Lease Fund
-- $0 for Heritage Parks Program

-- $2.5 million increase in PA Conservation Corps

-- 1 new positions for PA Conservation Corps for a total of 1,427 full-time positions, although the freeze imposed by the Governor’s Budget Office prevents vacancies from being filled.

“Agreed-To As Signed Governor’s

Agriculture FY 2014-15 Framework” GOP Budget FY 2015-16 FY 2016-17

General Operations	25,269	28,434	27,640	27,640	36,036
Conservation Districts	869	869	869	869	869
Total G.F	126,892	140,282	151,447 [or 121,773]*	52,924	142,557

*Source: Governor’s Budget Office - Later Tracking Run

Initiatives:

-- No change in authorized positions

Budget Hearings

Agency by agency budget hearings will be held by the Senate and House Appropriations Committees from February 22 to March 11. The hearings for environment-related agencies will be held--

— February 24: Senate— Dept. of Conservation & Natural Resources, 10:00;

— February 24: House— Public Utility Commission, 1:00;

— February 25: Senate- Dept. of Environmental Protection, 10:00;

— February 29: House— Dept. of Conservation & Natural Resources, 2:00;

— March 1: Senate- Dept. of Agriculture, 3:00;

— March 1: House- Dept. of Environmental Protection, 9:30; and

— March 9: House- Dept. of Agriculture, 1:30.

House budget hearings are held in Room 140 (Majority Caucus Room) and the Senate budget hearings are held in Hearing Room 1, North Office Building.

The complete schedules are available on the Senate Appropriations Committee and House Appropriations Committee webpages.

Here are the major budget documents from the Governor’s Budget Office--

-- FY 2016-17 Executive Budget

-- FY 2016-17 Budget In Brief