Sen. Pat Vance

The Joint Legislative Budget and Finance Committee this week released a report estimating the cost for municipal wastewater plant compliance with Chesapeake Bay cleanup standards at over $1.4 billion, matching estimates earlier developed by the PA Municipal Authorities Association and far exceeding estimates developed by the Department of Environmental Protection.

These costs were a prime motivating factor in the General Assembly and Gov. Rendell approving $1.2 billion in new water infrastructure funding in July advocated by the PA Fair Share for Clean Water Coalition.

The report also estimated annual operating costs to meet these clean water requirements at $61 million. Over the last six years, Gov. Rendell and the General Assembly cut annual Act 339 wastewater plant operating funds by $324 million.

If all costs for compliance came from user fees, the report estimated the average annual impact on user costs would be $68 per household per year-- $40 for capital costs and $28 for annual operation costs.

The Committee also reported the existing Nutrient Credit Trading Program that could reduce the cost of compliance was only "rarely" seen as a viable alternative, particularly given there have been only six trades since the program's inception.

The Committee found considerable support among the wastewater community for creating a government-supported clearinghouse for setting long-term prices for nutrient credits and guaranteeing their availability. Similar recommendations were made by the PA Fair Share for Clean Water Coalition.

The report concluded, that without modification, it appears unlikely the Nutrient Trading Program will play a significant role in helping wastewater plants comply with the Bay cleanup standards, other than as a short-term option for a limited number of traders.

The Committee completed the report in response to Senate Resolution 224, sponsored by Sen. Pat Vance (R-Cumberland), passed by the Senate earlier this year.

"This report provides the General Assembly with an independent, realistic assessment of the financial impact of the Chesapeake Bay Tributary Strategy," said Sen. Vance. "Now that we have a nonpartisan analysis establishing the costs for compliance, additional work must be done to help municipalities with this unfunded mandate. Two laws enacted in July will assist with some of the expense, but the available funding is only a portion of the $36.5 billion in water infrastructure needs recently estimated by the Governor's Sustainable Infrastructure Task Force."

The Committee hired an independent consultant, Metcalf and Eddy, Inc., to actually conduct the study.

The report did not address the estimated $600 million in compliance costs farmers will need to shoulder as a result of the Chesapeake Bay cleanup requirements. Neither the General Assembly or Gov. Rendell have dealt with this aspect of the cleanup.

The full report will be available online. A one-page summary is also available.

The Fair Share For Clean Water Coalition supports taking these additional steps to help address Pennsylvania’s remaining clean water issues:

-- Reforms to the state's nutrient credit trading program that will help to make it a viable alternative to provide for both environmental improvements to the Bay and sufficient future sewage capacity for new development;

-- $50 million in direct cost share aid to farmers to install conservation practices ($35 million for Resource Enhancement and Protection (REAP) farm tax credits and $15 million in cost share grants);

-- $10 million to county conservation district to expand technical assistance to farmers; and

-- $10 million to restore cuts to the Department of Agriculture budget in farm programs.

The Coalition includes over 45 farm and conservation groups, businesses, and local government entities, including Pennsylvania Farm Bureau, Pennsylvania Municipal Authorities Association, Pennsylvania Builders Association, Chesapeake Bay Foundation and the Pennsylvania Association of Conservation Districts.

For more information, visit the PA Fair Share For Clean Water Coalition website

11/21/2008