PennFuture Summary of Environmental Funding in Governor’s Budget

From PennFuture (http://www.pennfuture.org):

The Governor gave is budget address this morning. His staff briefed the environmental community yesterday afternoon on his budget, as well. The top-line narrative of his budget is increasing investment in education, consolidating government, a severance tax, set a higher minimum wage, and no broad based tax increases (though there is tax base broadening and some new fees).

You’ll mostly hear that his intention is to get at least $150M in new funding for education and consolidate 5 state agencies into 2 (Department of Criminal Justice and Department of Health and Human Services). It also proposes a 6.5% severance tax on natural gas, which they expect to raise $293.8M in 2017-18 and rise to $703M in 2021-22. The current Impact Fee would deducted from the new tax. The Governor has also indicated he won’t personally pursue a new Growing Greener 3 until his second term.

Overall, the budget proposal is a mixed bag that continues to perpetuate funding issues at DEP and DCNR, while actually reverting back to past problems (sourcing DCNRs budget from oil and gas lease royalties). It also proposes a complicated series of maneuvers around the Environmental Stewardship Fund to try and squeeze savings for the General Fund. It does include new investments in water pollution activities at DCNR, DEP, and PDA.

Governor’s budget proposal (% change compared to 2016-17) for select agencies with environmental/conservation investments:

Department of Agriculture

• 7.6% increase in General Operations budget.
• Eliminates Agricultural Research line item (again, he tried this last two years).

Department of Community and Economic Development

• 0.5% decrease in General Operations budget
• No programs impacting environmental concerns seem impacted

Department of Conservation and Natural Resources

• 6% increase in General Operations budget.
• Governor proposes to shift DCNR funding from General Fund back, in part, to Oil and Gas Leasing. This is a reversal from previous Wolf budgets that was weaning DCNR off of relying on state land drilling royalties. This is a huge problem.
  • Budget assumed about $10M/year in additional royalties going to the OGL.
  • 72.6% decrease in state parks budget through General Fund.
    • Replaces this cut ($43.5M) with revenue from Oil and Gas Lease Fund.
    • If realized, this would be an increase of $4M for state parks.
  • 71.5% decrease in state forest budget through General Fund.
    • Replaces this cut ($21.4M) with revenue from Oil and Gas Lease Fund.
    • If realized, this would be an increase of $2M for state forests.

Department of Environmental Protection

• Overall, the budget proposal does nothing to reverse years of budget and capacity cuts.
  • 3.4% decrease in General Operations budget.
  • 2.0% increase in Environmental Protection Operations budget.
  • Chesapeake Bay line item is decreased by a very small amount ($54K).
• Most of the action on increase DEPs budget can be found in the new fee packages they’ve been promulgating for the last 18 months.

Environmental Stewardship Fund

• This fund takes revenue from the tipping fee and uses it to pay back debt financing for Growing Greener 2 as well as provide land and water conservation grants.
• The fund itself is marred in a series of cuts and transfersL
  • The fund revenue from the Impact Fee is cut from $35M to $25M.
  • The Governor proposes transferring $37M from the  ESF to DCNRs Oil and Gas Lease Fund (which is then transferred again to the Hazardous Sites Cleanup Fund).
• The Governor then proposes to float a $387.4M bond issue through the CFA
  • He proposes that $52M/ year of that bond takes the place of original ESF funding priorities. This level is about $5M lower than current Growing Greener funding, so it’s an overall cut.
• Governor proposes to do this bond/fund setup for 3 years to save over a $100M in general funding.
• The tipping fee revenue would go into the General Fund.

New Watershed Protection Investments

• Using $15M from the $387M proposed (see above), the Governor proposes three new investments in watershed activities
  • New $2M to expand the Chesapeake Bay Riparian Forest Buffer Program at DCNR
  • New $4.7M erosion and sediment management plans program at the Department of Agriculture
  • New $8.3M local water quality investments at the Department of Environmental Protection
  • A portion of these last two programs will support a rebate program to farmers to cover the costs for nutrient management, ag erosion and sediment control, storm water control, and ag BMPs.