Tuesday, September 5, 2017

House Republicans Propose Taking Over $450 Million From Environmental Funds, The Largest Cut In PA History

A faction of the House Republicans Tuesday unveiled a plan to take over $450 million from state environmental funds set aside for funding specific local environmental projects and programs.  This raid will clearly put local governments, watershed groups, county conservation districts and other grantees and local businesses and contractors that already received grants or had contracts funded by one of these special funds are at risk of not getting paid and will prevent new grants to these same local groups from many of these funds.
This is the largest cut in environmental funding ever proposed in the state’s history.
The group billed the proposal as a way to balance the FY 2016-17 and 2017-18 budgets without raising taxes or borrowing large sums of money.
They say it is a $2.246 billion revenue proposal that identifies $1.2 billion in “surplus” and “unused” tax money just laying in 41 special fund accounts-- 15 of which are related to environmental or energy programs totaling more than $453 million.
The proposal also includes--
-- Endorsing Gov. Wolf’s action to put $189.3 million in spending in budgetary reserve, including cutting Heritage Parks and State Parks funding;
-- Diverting the $30.4 million state Attorney General settlement with Volkswagen for air emissions violations to the General Fund, which was included in the Senate-passed revenue package; and
-- Cutting tax credit programs by 50 percent, presumably including the Resource Enhancement and Protection (Farm) Conservation Tax Credit cutting it from $10 million to $5 million, and the Coal Refuse Energy and Reclamation Tax Credit from $10 million to $5 million, although no list was provided.
“This proposal will not cost one job, compromise any program or close any agency,” said Rep. Dan Moul (R-Adams), leader of the group.
House Republicans expect to vote on the plan when they return to session the week of September 11.
The group would take monies from these environmental and energy funds--
-- Agricultural Conservation Easement Purchase Fund (H7*)- $27 million (nearly half the fund) funded from the Cigarette Tax to buy farm conservation easements;
-- Coal Lands Improvement Fund (H17*) - $3.9 million (the entire fund) to fund mine reclamation projects;
-- County Conservation District Fund (H18*)- $3.3 million (half of fund) to fund county conservation districts that enforce erosion and sedimentation, encroachment and Chesapeake Bay Programs to help farmers;
-- Energy Development Fund (H22*)- $3.9 million (entire fund) funding for energy projects by the PA Energy Development authority;
-- Environmental Education Fund (H23*)- $1.2 million (entire fund) funding local and state environmental education programs paid for by penalties imposed by DEP;
-- Environmental Stewardship (Growing Greener) Fund (H24*)- $72 million (more than half the Fund) funds local mine reclamation, watershed restoration, oil and gas well plugging, recreation projects and more.  Payments to these grantees already approved are now at risk if they have not been paid already: May 2016: 114 Growing Greener Grants and January 2015: 109 Growing Greener Grants;
-- Hazardous Sites Cleanup Fund (H30*)- $50 million (half the fund) funds the cleanup of state-listed hazardous waste site, pay for DEP’s emergency response to hazardous waste spills, water replacement around hazardous waste sites, for the state’s share of cleanup costs for 97 federal Superfund sites and for the administration of the Land Recycling Program, including brownfields grants;
-- Highway Beautification Fund (H32*) - $500,000 (nearly the whole fund) for the regulating of outdoor advertising and junkyards;
-- Historic Preservation Fund (H32*)- $7 million (over 60 percent of entire fund) funds preservation, care and maintenance of state historic properties;
-- DCED Industrial Sites Cleanup Fund (H35*)- $10 million (more than half the fund) provide grants and loans to local governments for brownfield cleanups;
-- DCED Industrial Sites Environmental Assessment Fund - $7.5 million;
-- Keystone Recreation, Parks and Conservation Fund (H38*)- $100 million (more than the entire fund balance this year) funds local and state recreation improvement and land conservation projects.  Payments to these grantees are now at risk-- December 2016: 261 DCNR Community Conservation Partnership Grants and February 2016: 176 DCNR Community Conservation Partnership Grants if they have not been paid already.  Another 438 applications are pending for the next round of DCNR Community Conservation Partnership Grants
-- Recycling Fund (H69*)- $75 million (more than the entire fund balance this year) funds local implementation of recycling programs, household hazardous waste collection events, host municipality waste facility inspectors, county waste planning and more.  Payments to these grantees is at risk if they have not been paid already--   -- June 2016: 120 DEP Recycling Implementation Grants and January 2015: 120 DEP Recycling Implementation Grants;
-- Solid Waste  Resource Recovery Development Fund (H74*)- $448,000 (entire fund) to provide grants to support municipalities planning resource recovery and waste management facilities; and
-- Underground Storage Tank Indemnification Fund (H88*)- $100 million (about half the fund) this is an insurance fund for owners of underground storage tanks to pay for leaks and spills that is mandated to be actuarially sound by law and must maintain its funding. Owners of underground tanks risk not being able to collect for claims of leaks and spills. Since the $100 million will have to be restored to the Fund to make it actuarially sound, the Board that operates the Fund will have no choice but to raise the per gallon fee on gasoline to make things right.  This fee is on top of the highest gasoline tax in the nation.
*See Fund details in the Governor’s Executive Budget on this page.
If you’re going to raid special funds, raid them and defend your position, but their proposal is based on a significant misunderstanding about how these funds work.
First, money in these funds can only be spent for the purposes they were intended, by law.  There are no slush funds or unused monies in environmental funds.
Second, there are only two kinds of money in these funds-- funds set aside to pay grants and contracts as they are finished and new funds for new grants and contracts.  Paying grants and contracts is by reimbursement, as local governments and contractors finish work on a project and they are reimbursed.  
That can sometimes take 2 or 3 years depending on the project.  Funds have to be set aside to honor these grants and contracts and that’s why the environmental funds have what may seem to be larger balances.  But they aren’t unused.
These withdrawals will clearly mean monies may not be paid when grantees or contractors thought or never because the money won’t be there or there won’t be any new grants offered affecting hundreds of local governments, small business and local organizations.
Probably both in some cases given the size of these withdrawals.
Here’s the list of House Republicans responsible for this plan: Dan Moul (R-Adams), Keith Gillespie (R-York), Dawn Keefer (R-York), Seth Grove (R-York), Will Tallman, (R-Adams), Cris Dush (R-Jefferson), Kristin Phillips-Hill (R-York), Frank Ryan (R-Lebanon), Dave Zimmerman (R-Lancaster), Joe Emrick (R-Northampton), Kate Klunk (R-York), Ryan Mackenzie (R-Lehigh), Mike Tobash (R-Schuylkill), Paul Schemel (R-Franklin) Stephen Bloom (R-Cumberland) and Eric Nelson (R-Westmoreland).
Local governments, watershed groups, county conservation districts and other grantees and local businesses and contractors that live in districts represented by these House members and who have already received grants or had contracts funded by one of these special funds are at risk of not getting paid and will prevent new grants to these same local groups from many of these funds.
Reaction - Governor’s Office
The reaction of Gov. Wolf to the plan was decidedly negative-- “Raiding these funds will mean cuts to programs. There is no way around it. Taking funds from 9-1-1 centers and volunteer firefighters means less funding to improve public safety response in local communities. Shifting money from public and multimodal transportation sets back progress in municipalities small and large across Pennsylvania.”
He went on to point to the proposed transfers of funding from the Public Transportation Trust Fund, the Key 93 Recreation and Parks fund and the Hazardous Sites Cleanup Fund, as transfers that would handicap the ability of the state to address the issues those funds were created to tackle.
On Wednesday, Gov. Wolf added-- “I feel it’s a bad idea. It’s nonsense. The special funds, these are monies that are dedicated to programs that really make a difference in the lives of Pennsylvanians: volunteer fire companies, highways, 911 systems; those things would be jeopardized in the unlikely event that the majority of the House actually goes along with this. It’s irresponsible.”
“Every dollar they’ve come up with—as far as I know—changes some program that benefits Pennsylvanians,” Wolf said. “If the goal is to get no expense for government, we can do that, then we have no schools, we have no roads, we have no police, we have no judicial system and I don’t think that’s what the people of Pennsylvania want.”
“This is not complicated. These funds support essential Commonwealth programs,” said the Governor’s spokesperson J.J. Abbott. “If the money is not there, every Pennsylvanian will be negatively impacted.”
Reaction - Senate Republicans
Jennifer Kocher, spokesman for Senate Majority Leader Jake Corman (R-Centre), said this in response to a plan-- "While the leaders are open to new ideas... we are fearful that the new House plan would harm agricultural, environmental and transportation projects across the Commonwealth while not addressing long-term budgetary concerns.
"We will await action by the House and if that is completed in the near future, the Senate will analyze the specific details of their plan."
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