Thursday, December 15, 2016

2016 Was A Challenging Year In Harrisburg For Budget, Environmental Initiatives

To say 2016 was a challenging year for the budget and environmental initiatives is very much an understatement, but there may be some unexpected opportunities in 2017.
Some forget the FY 2015-16 state budget was only resolved on March 28 when Gov. Wolf allowed it to become law without his signature after more than a year of harsh back and forth rhetoric with the Senate and House and a bucket full of vetoes.
After the dust settled, the FY 2015-16 General Fund budget continued the downward spiral of funding for environmental programs.
DEP’s General Fund budget has shrunk by 40 percent over the last 13 years and 22 percent of its staff positions have been eliminated, declining from 3,200 in 2002-03 to below 2,495 this year.  Gov. Wolf froze another 200 of those positions in February.
The Fiscal Code bill signed as part of the FY 2015-16 budget-- House Bill 1589 (Causer-R-Cameron)-- again included some surprises-- a $15 million reduction in funding for the Environmental Stewardship (Growing Greener) Fund, takes $12 million from CFA’s High Performance Buildings Program and transfers it to fund a new program to expand access to natural gas infrastructure, earmarks existing DCNR funding for the operation of Washington Crossing Historical Park and directs funding to sewer and drinking water projects for specific legislators.
The FY 2016-17 General Fund budget-- Senate Bill 1073 (Browne-R-Lehigh)-- was almost on time. Gov. Wolf also let his second General Fund budget bill become law without his signature on July 10 and then signed the final piece of the budget-- a $1.3 billion revenue package-- into law on July 13.
For DEP and DCNR, this year’s General Fund budget was really little more than a cost-to-carry budget with few increases beyond what it would cost to fund existing programs.
The Fiscal Code bill-- House Bill 1605 (James-R-Butler)-- redirected $39 million in monies from the Environmental Stewardship (Growing Greener) Fund, the Recycling Fund,  a CFA green building program and other special funds to the state’s General Fund to help balance the budget.  The transfers included--
-- Transfer monies from these funds to General Fund: $5 million from Alternative Fuels Incentive Fund and $9 million from Recycling Fund;
-- Limits transfers from the Marcellus Legacy Fund to Environmental Stewardship Fund to $20 million (should be $35 million, the second year in a row funding has been limited) and limits the transfer from the Marcellus Legacy Fund to the Hazardous Sites Cleanup Fund to $5 million (a $10 million cut);
-- Transfers $12 million from CFA High Performance Green Buildings Program to the CFA Natural Gas Infrastructure Development Program (second year in a row this transfer was made).
The bill also included language that exempts any well that does not penetrate the Onondaga horizon from the Oil and Gas Conservation Law which came from Senate Bill 1145 (Yaw-R-Lycoming); established the DCNR Heritage Parks Program in law; and increased in-lieu of tax payments for DCNR State Forest Land.
The Tax Code Bill-- House Bill 1198 (Barrar-R-Delaware)-- included a new Coal Refuse Energy and Reclamation Tax Credit of $4 per ton of coal refuse to support existing waste coal-fired electric power plants totalling $7.5 million in the first year.
Legislation Enacted
Here’s a quick rundown on some of the legislation that found its way into law this year-- good and bad--
-- Killed DEP Conventional Drilling Regs: Senate Bill 279 (Hutchinson-R-Venango) requiring DEP to start over to update its drilling regulations covering conventional oil and gas wells and creating the PA Grade Crude Development Advisory Council signed into law as Act 52 (House Fiscal Note and summary).
-- Made Climate Plan Review Process Harder: Senate Bill 1195 (White-R-Indiana) further providing for legislative review of any plan developed by DEP to implement the EPA Clean Power Climate Plan was signed into law as Act 57.
-- Authorized Township Stormwater Fees: House Bill 1325 (Mustio-R-Allegheny) allowing townships of the second class to charge stormwater management fees was signed into law as Act 62 (House Fiscal Note and summary).
-- Made Destruction Of Prescription Drugs Easier: House Bill 1737 (Maher-R-Allegheny) further providing for the safe destruction of unwanted or unused prescription and other drugs was signed  into law as Act 123 (House Fiscal Note and summary).
-- Extended Land Conservation Easements Tax Exemption: House Bill 2370 (Moul-R- Adams) among other provisions, the bill extends the conservation easement Realty Transfer Tax exemption was signed into law as Act 175 (House Fiscal Note and summary).
-- Promoted Natural Gas Competition: House Bill 57 (Payne-R-Dauphin) further providing for natural gas completion was signed into law as Act 47 (House Fiscal Note and summary).
-- Independent CAC Executive Director: House Bill 941 (Regan-R-Cumberland), which amends the Administrative Code, includes a provision allowing DEP’s Citizens Advisory Council to independently hire its own Executive Director and makes the Secretary of DEP an ex officio member of the Council, was signed into law as Act 7 (Senate Fiscal Note and summary).
Legislation Vetoed
-- Extended Review Of Regulations: Senate Bill 562 (Gordner-R-Columbia) amending the Regulatory Review Act to allow the General Assembly to block a regulation by inaction for no reason and prohibits an agency from publishing a statement of purpose for a regulation taking away the public’s right to know why a regulation is being adopted was vetoed by the Governor (House Fiscal Note and summary).  Click Here for the veto message.
-- Fiscal Code Bill: House Bill 1327 (Peifer-R-Pike) that would have killed DEP’s conventional drilling regulations [later signed into law in Senate Bill 279 (Hutchinson-R-Venango)] and made the General Assembly’s review of a Pennsylvania Plan to comply with EPA’s Clean Power Plan harder [later signed into law in Senate Bill 1195 (White-R-Indiana)] was vetoed by the Governor.  Click Here for the veto message.
Next Year
Randy Albright, Gov. Wolf’s Budget Secretary, Wednesday said in the Mid-Year Budget Briefing he expects the current fiscal year to end on June 30 with a $603.7 million thanks to lagging revenues and the expected need for up to $182 million in supplemental funding primarily for the Department of Human Services.
While he said the Administration was in general agreement with the Independent Fiscal Office deficit numbers, the Governor’s Office deficit projection was $103.7 million higher than the IFO’s $500 million  estimate.
The IFO is also projecting  a $1.7 billion deficit in the coming FY 2017-18 fiscal year, but Albright did not project a number for next year.
That means Gov. Wolf and the General Assembly will somehow have to come up with a combination of cuts and “revenue enhancements” totalling about $2.2 billion before June 30.
House Majority Leader David Reed (R-Indiana) told the media Wednesday the state is facing “a massive budget deficit” and needs to consider a broad restructuring of state agencies to save money, saying maybe we don’t need all the state agencies we have now.  
He said restructuring could affect schools, human services, prisons and operations of the General Assembly itself.
Rep. Reed said after the last two budget becoming law without Gov. Wolf’s signature, the Republicans this year may write their own budget.  [Actually, they did do that several times during the FY 2015-16 and 2016-17 budget discussions.]
Albright said in response to a question about Rep. Reed’s suggestions, the Administration will exhaust any and all options to reduce spending and costs before seeking any additional revenues.  
Gov. Wolf lays out his FY 2017-18 budget proposal on February 7.
The new legislative session kicks off on swearing in day January 3 when Senate and House members can reintroduce all the bills that didn’t make it last session.
Shortly thereafter standing committee chair assignments will be made and by the end of the month all committee members.
And then, we start the fun all over again!
Related Stories:
Year In Review: DCNR Expands Economic Impact Of State Forests, Parks

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