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Gov. Wolf’s Budget Bumps DEP, DCNR Budget, But DEP Remains Just Above 1994 Levels

Gov. Tom Wolf Tuesday laid out a $32.9 billion plan for FY 2018-19 that includes the first major investment in workforce development and skills training, including dedicated funding for STEM and computer science education.

[Note: On January 30 the Independent Fiscal Office estimated General Fund revenues for FY 2018-19 would be $33.9 billion.]

The proposal includes a $8.1 million increase in General Fund appropriations for the Department of Environmental Protection, primarily to fund a previously announced increase in staff to bolster its permit review programs and to restore other cuts to the river basin commissions made in this year’s budget.

The proposed General Fund budget for the DEP-- $154.5 million-- is still just above the 1994-94 appropriation of $147.7 million. This only means DEP will still have to rely on increases in permit fees to fund its programs.

The proposed staff complement at DEP is 2,482, significantly below the 3,200 it was in 2002.

The Department of Conservation and Natural Resources would see a $16 million increase in General Fund appropriations comes from reducing the transfers from the Oil and Gas Lease Fund by $11.2 million, however, the Heritage Parks Program was reduced $635,000 to $2.2 million.

In his 2018-19 budget address, Gov. Wolf asked the Republican-led General Assembly to pass a modest, commonsense severance tax that would help ensure all Pennsylvanians benefit from the prosperity of the resources under their feet.

“Let’s understand exactly what a severance tax is,” Gov. Wolf said. “It’s a tax paid by people mostly outside of Pennsylvania to use our natural resources. And by failing to put in place this commonsense tax, we’re paying other states’ taxes - when we fill up our cars, or heat our homes - we’re paying for Alaska’s schools and Texas’ roads. I don’t know about you, but I don’t remember getting a thank you note from anyone in Alaska or Texas.

“That could be us, too. Pennsylvania is blowing most other states out of the water when it comes to production. And by joining every other gas-producing state and passing a severance tax, we could also join them by bringing billions into our own coffers. Ask these oil and gas behemoths to pay their fair share for extracting Pennsylvania’s bountiful resources, and we can build a brighter future for Pennsylvania.”

Senate Majority Leader Jake Corman (R-Centre) expressed his disappointment at the severance tax proposal saying it did not include the “permit reforms” agreed to last year by the Governor.

None of the expected $248 million in revenue to be generated from a severance tax would go to environmental programs.

Here are some quick budget, initial budget highlights--

DEP

-- General Fund increase of $8.1 million from $146.4 to $154.5 million - primarily the previously announced increase in 33 positions for permit reviews

-- Increases funding for the Delaware and Susquehanna River Basin Commissions

-- Staff complement increase of 33 to 2,482

DCNR

-- General Fund increase of $16 million from $105 to $121 million - Increase of $6.5 million for State Park and $8.7 million for State Forests operations

-- Reduces transfer from the Oil and Gas Lease Fund by $11.2 million

-- Eliminates $625,000 for Heritage Parks Program

-- Staff complement increase of 2 to 1,271

Agriculture

-- General Fund cut of $2 million taking out agricultural research, excellence, food marketing and other programs

-- $1.597 million for Spotted Lanternfly detection and eradication

-- Staff complement increase of 16 to 573

Health

-- $2.5 million for Lyme Disease prevention, education and awareness

Note: Budget Secretary Randy Albright said in a press conference the Wolf Administration would be providing a list of $300 million in special fund transfers to the State Treasurer before budget hearings start as required by law.

DEP Permitting Initiative

On January 26 Gov. Wolf announced the administration's plan to reduce permit backlogs, modernize permitting processes, and better utilize technology to improve both oversight and efficiency. New initiatives include:

-- E-Permitting: Expanding the e-permitting system to include several key development permits, reducing the time spent trading paper between DEP and industry;

-- Track Progress: Creating a new analytics program that helps managers track progress on open permit applications – allowing them to know how long permits have been in the system;

-- New Review Processes: Releasing new review processes and registration practices for key development permits for clarification on what is needed to complete an application and make it easier to apply for these permits; and

-- Well Pad Permitting: Supporting common sense legislation that will bring the permit process in line with the industry it is engaged with, such as extending permit terms and allowing multi-well oil and gas pad permitting.

-- Simplified Water Obstruction & Encroachment General Permit Process online by February 2018. Click Here for more.

A copy of the Governor’s FY 2018-19 budget proposal will be posted on the Governor’s Budget Office webpage. Click Here for big budget book. Click Here for budget spreadsheet. Click Here for Budget In Brief. Click Here for proposed budget legislation.

Other documents: Click Here for House Republican summary of the proposal. Click Here for House Democratic summary. Click Here for Senate Democratic summary.

Reaction - Senate

Sen. Gene Yaw (R-Lycoming), Majority Chair of the Senate Environmental Resources and Energy Committee, said, “The severance tax obviously, that's like the swallows coming back to capistrano, everybody knew severance tax was going to be mentioned again. I voted for a severance tax last year, but it had a lot of regulatory considerations with it. Those are absent now. I hope we didn't bypass that opportunity to trade of some really good regulatory controls.” Click Here for audio.

Sen. John Yudichak (D-Luzerne), Minority Chair of the Senate Environmental Committee, said, “A responsible budget must adequately fund the Department of Environmental Protection and other agencies that support economic activity and growth. Environmental permits are required for nearly every energy, construction, environmental remediation, or economic development project in Pennsylvania.

"In the past 15 years, DEP has suffered from substantial funding reductions, and I commend the Governor’s effort to add $2.5 million to help the department increase its staff complement."

Reactions - Environmental Groups

Harry Campbell, PA Office Director for the Chesapeake Bay Foundation, issued this statement on the proposed budget-- “Among the many social, economic, and environmental issues facing this Commonwealth, CBF is encouraged by a slight increase in investments that can protect and restore our rivers and streams.

“This comes at a critical time when a report by the Chesapeake Bay Program indicates that the Clean Water Blueprint is working in Pennsylvania and ultimately, the Chesapeake Bay.

“But progress is tenuous and Pennsylvania has a lot of work to do. The Commonwealth lags significantly behind in meeting its pollution reduction commitments. It will take greater, sustainable investments in the right places and on the right practices to get Pennsylvania back on track.

“CBF supports a reasonable severance tax on natural gas extraction, if funds are applied to reduce water pollution and restore Pennsylvania’s rivers and streams.

“The Commonwealth made clean water commitments to its citizens. We urge legislators to follow-through and provide the investments necessary to meet those commitments.”

Joseph Otis Minott, Executive Director of the Clean Air Council provided these comments, "While Wolf continues to promote a natural gas severance tax, he must acknowledge that it will not protect the environment - the most significant thing he can do right now is fulfill his promise to address unchecked air pollution from the natural gas industry. While DEP has made progress on air pollution standards for new natural gas sources, it must finalize them quickly and set similar standards for existing sources. Increasing funding for DEP - not allowing further cuts - will ensure DEP can develop and effectively implement these protections.”

NewsClips:

Bay Journal-Morelli: PA Senate Approves Bay Funding Bill Without The Funding

Legere: DEP Proposes To Double Gas Drilling Permit Fees

Op-Ed: With New Budget, Wolf Must Champion The Environment, Joe Minott

McKelvey: Bump In Environmental Protection Budget Does Little To Stem Legacy Of Cuts

Schneck: Wolf Aims For Bigger Lyme Disease Battle In Proposed Budget

Republicans Oppose Wolf’s Latest Attempt At Natural Gas Severance Tax

Op-Ed: Lawmakers Out Of Excuses: Pass The Severance Tax

Editorial: Extraction Tax On Natural Gas Long Overdue

AP: Highlights Of Gov. Wolf’s 4th State Budget Proposal

AP: Text Of Gov. Wolf’s 2018 Budget Address

Gov. Wolf’s 2018-19 Budget Winners And Losers