PA Environment Digest

Responding to a deepening budget crisis and the need to deal with a $3.2 billion revenue shortfall, Gov. Rendell this week convened an emergency cabinet meeting and gave each cabinet member specific targets for cutting an additional $500 million from next year’s state budget.

This latest round of cuts eliminates $16 million from the Departments of Agriculture ($5 million), Environmental Protection ($7 Million) and Conservation and Natural Resources ($4 million).

These cuts come on top of $18.2 million in cuts to these same agencies late last year-- Agriculture ($3.4 million), Environmental Protection ($9.7 million) and Conservation and Natural Resources ($5.1 million). (Click here for the latest cuts assigned to each agency.)

In addition, the Governor transfered $174 million in revenue from leasing Marcellus Shale natural gas drilling rights in State Forests from DCNR to the General Fund to help balance the current year's budget. The Senate passed legislation earlier this year to do the same thing.

He proposed another $1 billion in spending reductions during his February budget address.

The $500 million in reductions he identified this week brings his total cuts to $2 billion.

Gov. Rendell also called for enactment of a temporary, three year hike of one-half percent in the Personal Income Tax and a delay in the phase out of the Capital Stock and Franchise Tax to generate $1.8 billion to help balance the state budget.

The Governor has also proposed a severance tax on natural gas production earmarked for the General Fund, not to environmental programs. On June 23 the House Environmental Resources and Energy Committee will consider severance tax legislation and an amendment is expect to devote a significant percentage to fund environmental programs. (See separate story)

Notwithstanding the proposed tax increases and budget cuts, the Governor did not decrease his overall spending request for 2009-10.

Gov. Rendell said he recognizes his proposal for $2 billion in spending cuts is severe and will undoubtedly raise objections from those who will be impacted. But unlike the Senate Republican plan to reduce the budget by $1.7 billion, the Governor said his $2 billion in spending reductions are spread carefully across the board to avoid the deep and extreme cuts to education and economic development initiatives.

“While I agree that we must make dramatic cuts to balance our budget, I am taking a vastly different approach. The Senate Republican plan is full of harsh and debilitating cuts to education and economic development initiatives that will cause local property taxes to soar and cost the state thousands of more jobs,” Gov. Rendell said.

“Balancing the budget by forcing local communities to raise property taxes is the cowards’ approach. I was not elected to make politically convenient decisions that would put concerns about the next election ahead of the needs of the next generation,” added Gov. Rendell.

He also pointed out that the $27.3 billion budget plan passed by Senate Republicans in early May is already a billion dollars out of balance because revenues have continued to decline while the national recession persists. Thus, their budget, as is, would not be a workable alternative unless they raise more money in taxes.

The Governor instructed his cabinet secretaries to adopt his suggested reductions or come back quickly with other ideas that meet his targets for each agency. He acknowledged that this is a difficult task, and additional reductions will require surgical-like precision.

Nearly A Billion Lost In Environmental Funding

In the last six years, $784 million in environmental funding has been diverted to balance the budget or pay for programs that could not get funding on their own. If these new cuts are included in the 2009-10 budget, it means that $938 million, almost a billion dollars, of environmental funding has been diverted to other programs.(Pa Environment Digest 12/29/09)

Here's the list of major funding diversions in the last six years--

-- $174 million from the DCNR Oil and Gas Lease Fund to the General Fund in 2009;

-- $324 million intended to support wastewater plant operations over the last six years to balance the budget;

-- $100 million in 2002 from the Underground Storage Tank cleanup insurance fund to balance the budget (although this is slowly being repaid over 10 years);

-- $52.7 million “one-time” diversion from the Keystone Recreation, Parks and Conservation Fund in 2006 to balance the budget;

-- $50 million in 2007 and 2008 from the Environmental Stewardship Fund, which supports mine reclamation and watershed restoration, to fund the Hazardous Sites Cleanup Program because there was no agreement on how to fund that program;

-- $50 million in 2007 and 2008 from the Environmental Stewardship Fund to pay debt service on the Growing Greener II bond issue and taking funding away from restoration projects each year for the next 25 years – reflecting a pattern of only environmental programs being required to address their own bond debt service;

-- $15 million from the Recycling Fund in 2008 to balance the budget; and

-- $18.4 million put into budgetary reserve in 2008-09 from the Department of Environmental Protection and Department of Conservation and Natural Resources.

Growing Greener Ends

Compounding the impact of all these proposed environmental funding cuts is the fact that Growing Greener II funding will run out next year leaving little or no state funding for mine reclamation, watershed restoration, oil and gas well plugging and other Growing Greener programs.

Scrapbook

Daily Blog

Share this: