Friday, June 2, 2017

Budget Challenges Part III: Federal Govt Pays More To Fund DEP Than PA Does, Will They Cut Too?

The Trump Administration is proposing 30 to 40 percent cuts in FY 2018 grants to states that pay for administering federal programs, to zero out the Chesapeake Bay and Great lakes restoration programs and provide no funding for the Low Income Home Energy Assistance Program, among other reductions.
DEP actually receives more money from the federal government than state general revenue to support its operations-- 30 percent from the feds, 20 percent from the state General Fund and 50 percent from fees and some fines.
DEP Secretary Patrick McDonnell wrote to Pennsylvania’s Congressional delegation on May 23 detailing the impact the proposed Trump Administration cuts will have on state environmental protection programs.  Among the impacts he outlined were--
-- Cuts In Water Quality Protection. The proposed cut to the federally funded portion of the Clean Water Bureau budget will mean cutting at least 850 inspections from the 6,144 inspections that ensure that sewage plants, industrial wastewater discharges, and construction sites are not threatening the water quality of Pennsylvanians downstream. Reductions in federal funds will also lengthen permit issuance timelines, hampering important economic development projects in Pennsylvania.
-- Abandons Farmers. Pennsylvania’s Chesapeake Bay program — which the President recently acknowledged as a model of federal/state partnerships, and is starting to show real results in curbing pollution to the Bay — will have its funding completely eliminated. This program will no longer be able to provide much-needed support to Pennsylvania’s small farmers and local governments to improve their local water quality.
-- Cuts Brownfields Cleanups. Pennsylvania’s Brownfields program cleans up contaminated properties for redevelopment, directly promoting economic development and preserving green space. Since 1995, almost 5,000 brownfields have been cleaned up, leading to almost 100,000 jobs created or retained. The President’s budget proposes a 30 percent cut to the Brownfields Categorical Grant and another 30 percent cut to the Hazardous Substance Superfund program, which will inhibit contaminated sites from being returned to productive use for new and expanding business and industry in Pennsylvania.
-- Cut Leaking Underground Storage Tank Program. This proposed budget includes a nearly 50 percent cut to the Leaking Underground Storage Tanks Program and zeros out the federal funding provided through categorical grants, which could pose risks to Pennsylvania’s valuable groundwater resources.
-- Cuts Support For Air Pollution Control Program. The proposed 30 percent cut to the federal funding provided to DEP’s Bureau of Air Quality will limit air monitoring for harmful pollutants such as volatile organic compounds, mercury, and particulate matter, and have a negative impact on the timeline for review of air quality permits which companies need in order to start operations or expand.
The Trump cuts are being proposed at the same time the U.S. Environmental Protection Agency and other federal agencies are citing DEP for not meeting minimum federal program requirements due to lack of staff and financial resources.
The first questions asked of DEP during House and Senate budget hearings in March were about how DEP’s is responding to an EPA letter citing Pennsylvania for failing to conduct the minimum number of drinking water system inspections, having nearly 8,000 unaddressed Safe Drinking Water Act violations and a staff workload that is more than double the national average.
While DEP is moving to get a proposed drinking water permit fee increase regulation adopted to hire up to 33 additional staff, EPA took the unusual step of recommending Pennsylvania find temporary funding to hire more staff sooner.
EPA did that because by the time DEP got the fee increase finalized, assuming everything goes well, they could not begin to hire new staff until sometime in 2019, after fee revenue started coming in.
When the House Republicans adopted their version of the budget in April, there was no increase in funding for the Safe Drinking Water Program to meet this challenge, in spite of all the questions, and instead the Republicans are relying on DEP’s drinking water fees to save the day.
DEP is also pursuing permit fee increases this year for the Laboratory Accreditation, Radiation Protection, Noncoal and Coal Mining Programs, Air Quality and possibly the Oil and Gas programs to fill widening gaps in its budget.
House Republicans are apparently content to let DEP raise permit fees to make up for the cuts they make in DEP’s General Fund appropriations.
Over the last 3 years, not only EPA, but the federal Office of Surface Mining Reclamation and Enforcement, among other federal agencies, have expressed significant concerns about the ongoing capacity of DEP to enforce minimum federal requirements of primacy for its safe drinking water, water quality, surface mining and water infrastructure funding programs due to lack of resources.
In February of last year, the PA Environmental Council and Chesapeake Bay Foundation-PA wrote to members of the Senate Appropriations Committee to raise concerns about the risk of losing control of key environmental regulatory programs to the federal government and courts because of the cuts in funding and staff at the Department of Environmental Protection over the past decade.
Some examples, in addition to the Safe Drinking Water Program, include:
-- U.S. Environmental Protection Agency - 4 Water Programs
There are a number of programs where EPA review has found deficiencies in staffing and resources:
-- A 2012 Summary Field Report on the Department’s Stormwater Program, that contained several observations regarding lack of capacity including: insufficient Regional Office reviews of post construction stormwater management plans (Observation 5); overall ability to undertake compliance and enforcement activities (Observation 10); lack of Central Office oversight (Observations 14 and 23); and insufficient staffing to implement the Municipal Separate Storm Sewer System (MS4) Total Maximum Daily Load (TMDL) and Chesapeake Bay Pollution Reduction Plans.
-- A May 2015 letter, noting that EPA may need to condition or redirect federal funding for Chesapeake Bay pollution reduction efforts. This funding was indeed withheld, though it was recently released upon announcement of the Department’s Reboot Plan for the Chesapeake Bay . However, ongoing funding will be contingent on demonstration of sufficient funding and outcomes for that effort.
-- A June 2015 EPA Program Evaluation Report on the Drinking Water State Revolving Fund Program, which is administered by both the Department and the Pennsylvania Infrastructure Investment Authority. Specific action items from the Report included Department evaluation of staff resources to address failures in inspections and the finalization of projects.    
-- A June 2015 EPA Program Evaluation Report on the Clean Water State Revolving Fund Program, noting similar staffing review needs as with the Drinking Water State Revolving Fund Program.
-- U.S. Environmental Protection Agency - Air
In a November 2015 EPA Technical System Audit on air quality monitoring, EPA determined that the Department’s Air Quality Monitoring Division is “severely understaffed,” constituting a Major Finding which equates to “nonconformance of high importance which is unacceptable and must be remedied.”
Report discussion notes that the Department lacks adequate resources both in personnel and funding, and that EPA auditors found “significant concerns with [the Department’s] field staff shortage.”
The corrective recommendation offered in the report is that vacant positions “need to be filled in order to continue operating (the) air monitoring program pursuant to 40 CFR 58 Appendix A.”
-- Office of Surface Mining and Reclamation Enforcement
Since 2011, the Department has been required to submit a series of Action Plans for regulatory compliance to OSMRE. In the 2016 Oversight Performance Agreement and Action Plan signed by both the Department and OSMRE, there are two specific areas of particular note with respect to budget issues:
-- Due to staffing reductions, the Department has not been able to meet required inspection compliance rates. In 2012, the compliance rate was 71 percent on active mine permits; 38 percent on inactive mine permits; and 20 percent on bond forfeited permits.
-- OSMRE has also taken issue with adequacy of bonding for mining permits, citing the inability of the Department to conduct full volume bonding with proper site analysis due to staffing shortfalls. This matter is doubly important because any bonding shortfalls could (and likely will) ultimately become a liability for the Commonwealth.
In correspondence between OSMRE and the Department, OSMRE states: “failure [to comply with the Oversight Performance Agreement and Action Plan] will jeopardize Pennsylvania’s primacy under the Federal Surface Mining Control and Reclamation Act … for regulating coal surface mining operations.”
If Congress and Pennsylvania’s Congressional delegation do not reverse the Trump Administration’s proposed FY 2018 cuts, many significant state environmental protection programs would simply be hollowed out by first state budget cuts and then federal reductions.
DEP would be crippled and would have no choice but to raise permit fees on the businesses, local governments and individual regulated by the agency.
It’s a fantasy to think these kinds of cuts can be dealt with by increasing efficiencies.
These kinds of cuts would have been unthinkable in Pennsylvania 25 even 15 years ago.
I’ve learned one thing being around state environmental programs for 40 years, legislators and Governor’s can do anything they want to do in the budget, even in the leanest of budget years, with the right leadership.
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