PA Environment Digest

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Gov. Wolf Proposes A $4.5 Billion, 4-Year Restore Pennsylvania Community & Environmental Infrastructure Investment Program

On January 31, Gov. Tom Wolf proposed a $4.5 billion, 4-year Restore Pennsylvania initiative to fund high-impact community and environmental infrastructure projects that he said will help catapult Pennsylvania ahead of every state in the country in terms of technology, development and infrastructure.

Restore Pennsylvania has 5 priority areas-- High Speed Internet Access; Storm Preparedness and Disaster Recovery; Downstream Manufacturing, Business Development and Energy Infrastructure; Demolition, Revitalization and Renewal; and Transportation Capital Projects.

It would be funded by monetizing a severance tax on natural gas production in Pennsylvania that would generate $300 million a year, over and above the existing Act 13 drilling impact fee.

“Over the past four years my administration has worked hard to improve our infrastructure and build strong, stable communities across the Commonwealth,” said Gov. Wolf. “We’ve made progress, but we still have more work to do.”

“It is far past time that Pennsylvanians stop allowing our Commonwealth to be the only state losing out on the opportunity to reinvest in our communities,” said Gov. Wolf. “And as long as that is allowed to continue – my vision of a restored Pennsylvania that is ready to compete in the 21st century economy will never become reality.”

The Governor said this proposal is separate from the budget because it is not intended to make up for funding deficits in the regular budget.

Senators John Yudichak (D-Luzerne), Minority Chair of the Senate Environmental Resources and Energy Committee, and Tom Killion (R-Delaware) will co-sponsor the implementing legislation in the Senate.

Representatives Jake Wheatley (D-Allegheny) and Thomas Murt (R-Montgomery) will co-sponsor the implementing legislation in the House.

“Restore Pennsylvania is a bold and innovative plan to inject billions of dollars into infrastructure projects across the Commonwealth through a fair severance tax,” said Sen. John Yudichak. “I applaud Governor Wolf for working in a bipartisan fashion to craft a plan that will benefit all Pennsylvanians.”

"We can no longer afford to lose billions of dollars by not having a sensible severance tax on drillers,” said Sen. Tom Killion. “I thank Governor Wolf for his strong leadership on this issue. I am proud to work with Senator Yudichak on passing the governor's proposal in the senate. Let's finally get this done for Pennsylvania's families."

“As the Democratic chairman of the House Finance Committee, I appreciate the difficulty behind fairly and effectively raising revenue,” said Rep. Jake Wheatley. “This is a reasonable severance tax, with exciting new ideas on how to maximize our investment. That’s why I’m pleased to be one of the prime sponsors of this legislation, along with looking forward to working with the governor and my Republican colleagues to finally get this done.”

“It is time that we faced our responsibilities honestly and tapped our vast natural gas resources in a way that will allow us to invest in Pennsylvania’s future success,” Rep. Thomas Murt said. “Restore Pennsylvania will help us upgrade transportation infrastructure, fight blight, and address contamination issues like lead and PFAS in my district and throughout the Commonwealth.”

Environmental Elements

The environmental elements include funding for flood damage reduction and floodplain restoration projects, stormwater pollution reduction to help communities comply with the MS4 requirements, helping families recover from disasters, brownfield and contaminated site cleanup, funding to preserve open space, address the State Park maintenance backlog, for farmland preservation, abandoned mine cleanup and creating new recreation opportunities, improving energy efficiency, installing combined heat and power and micro-grid system, improving dirt and gravel roads and for transit capital projects.

This initiative represents the first new funding to support local environmental restoration projects since the Growing Greener Program was enacted in 1999 under Gov. Ridge and had its funding expanded in 2002 under Gov. Schweiker.

With this proposal, Gov. Wolf joins the Republican and Democratic governors of Maryland, New York and Virginia, upstream and downstream of Pennsylvania in the Chesapeake Bay Watershed, who have already laid out extensive plans in their states to address critical water-related environmental funding issues.

Here are some highlights on the environment-related elements of the Restore Pennsylvania proposal--

-- Critical Flood Control Infrastructure: Last year was the wettest year on record in Pennsylvania, and modelling suggests that increased rain will continue.

Communities across the state were impacted by record-breaking rainfall, flash flooding and river flooding across the state, from Philadelphia in the east and Allegheny County in the west to Bradford and Columbia in the north and widespread devastation in Schuylkill, Lebanon, York and Lancaster Counties in Central Pennsylvania, among others.

A single storm in early August created more than $60 million in damage to transportation infrastructure alone in the middle of the state.

A Center for Rural Pennsylvania study done by Penn State in 2017 showed the frequency and duration of heavy precipitation events increased 71 percent from 1958 to 2013.

The devastation these natural disasters leave in their wake demonstrate all too clearly that Pennsylvania’s legacy infrastructure needs to be updated to handle changing weather and new development.

Many needed projects involve streambank restoration to restore flow and prevent future erosion.

Other projects will be for floodplain restoration, which allows stormwater to spread out and slow down, so it can be absorbed into the groundwater, rather than flooding over streambanks.

Additional critical flood control infrastructure includes dams, levees and flood walls.

Restore Pennsylvania will provide funding for flood prevention that will protect against severe weather and save homes and businesses in flood prone areas across the state. It will provide funding to help towns and cities prepare for flooding and severe weather, upgrade flood walls and levees, replace high-hazard dams, and conduct stream restoration and maintenance.

-- Helping Families Rebuild After Disasters: In the aftermath of severe storms and other disasters, homeowners who have in some cases lost everything need immediate assistance to begin to put their lives back together.

While Federal Emergency Management Agency funding is available to assist property owners recovering from events that have been declared a Major Disaster, and funding is available from the U.S. Small Business Administration for some smaller events, there is currently very limited help available for Pennsylvanians who experience catastrophic losses due to localized flooding or other severe weather events that were not declared a Major Disaster by the federal government.

Restore Pennsylvania will establish a disaster relief trust fund to assist individuals who suffer losses that are not compensated by FEMA or other programs.

-- Stormwater Infrastructure: Across Pennsylvania, communities large and small are struggling to implement new federal requirements that they manage stormwater to prevent pollution from flowing into local streams and rivers.

Nearly 1,000 communities with municipal separate storm sewer systems (MS4) are currently preparing to implement a Pollutant Reduction Plan to reduce discharges from their storm sewers into local waterways.

While funding this new infrastructure is a challenge, it is also an opportunity to create local jobs to construct and maintain green infrastructure that captures stormwater where it falls while also beautifying downtowns with rain gardens, parks, and streetscape improvements.

Restore Pennsylvania will provide grants to municipalities moving forward with Pollutant Reduction Plans to help them implement creative solutions to comply with their stormwater mandates and transform their communities.

Additional state funding will reduce the need for new stormwater fees, which have proven unpopular where they have been proposed.

Additional incentives will be provided for communities that are working collaboratively with their neighbors to tackle the problem in the most efficient manner possible.

-- Brownfield Clean-Up: In communities across the state, underutilized and abandoned former industrial and commercial sites sit waiting for cleanup to unlock their potential as a catalyst for new manufacturing and economic development.

Frequently these sites have existing infrastructure, historic buildings and close proximity to transportation that make them attractive locations for redevelopment and reuse.

Revitalizing these locations improves the health and quality of life of our citizens and injects much-needed revenue into our local communities by returning once lifeless properties to the tax rolls.

Pennsylvania’s land recycling program has long been lauded as a national model for the successful cleanup of brownfields, with over 6,000 sites having been successfully cleaned up and returned to productive use.

With the long-anticipated phase out of the Capital Stock and Franchise Tax in 2016, which helped fund the program, there is now a need to identify funding to ensure that this critical work can continue.

Restore Pennsylvania will provide funding to ensure the continuation of Pennsylvania’s Brownfields program, ensuring that more sites can be returned to use for recreation, or returned to the tax rolls as commercial, residential, or industrial sites.

Restore Pennsylvania will increase resources for addressing blight by providing financial resources at the local level to establish land banks and acquire and demolish blighted buildings in order to create new development opportunities or provide new green space. The funding will be administered by entities established by the legislature as land banks or demolition funds.

-- Contaminant Remediation: In addition to remaining brownfields, many residential homes and neighborhoods still face issues with contaminants like lead and Perfluoroalkyl and Polyfluoroalkyl Substances (PFAS).

Studies continue to find elevated lead levels in blood tests of Pennsylvania’s youngest residents, a result of Pennsylvania’s older housing stock, 70 percent of which was built before the 1978 ban on lead paint. Long-term exposure to lead paint can have devastating developmental consequences including lowered-IQ, memory problems, and other neurological and behavioral effects.

To help prevent the ongoing exposure of Pennsylvania’s most vulnerable populations, we must redouble our level of effort to remediate lead paint from homes throughout theCommonwealth.

There have also been recent discoveries of PFAS contaminants in numerous communities across the Commonwealth, threatening the safety of residents’ drinking water. The cleanup costs associated with addressing these chemicals can be significant, and without the Hazardous Sites Cleanup Fund there are few funding options available at the state level.

Restore Pennsylvania will fund expanded efforts to remove lead and other contaminants from communities.

-- Green Infrastructure (Open Space, State Park Maintenance, Farmland Preservation, Pollution Reduction, Abandoned Mine Cleanup, New Recreation Opportunities): Pennsylvania has long recognized the need to invest to protect open space, address maintenance needs in state parks, preserve working farms, install farm best management practices, clean up abandoned mines and restore watersheds, provide funds for recreational trails and local parks, help communities address land use, and provide new and upgraded water and sewer systems.

These projects help create prosperous and sustainable communities, protect the environment, add quality of life value that attracts jobs, contribute to Pennsylvania’s outdoor recreation and tourism industries, and improve public health.

Moreover, the outdoor recreational opportunities provided by our state’s network of parks, trails, greenways, riverfronts and other open spaces are increasingly cited as an important factor in where residents decide to live and work, creating a major incentive to invest in creating these opportunities as a strategy to attract and retain the workforce that will power Pennsylvania’s economy tomorrow.

However, significant need continues to exist. Over 19,000 miles of streams and rivers do not meet federal and state water quality standards. Nearly 200,000 acres of abandoned mine land remain across 43 Pennsylvania counties.

More than 2,000 working farms remain on county waiting lists to be preserved. Over 200,000 orphaned and abandoned wells pollute our landscape.

There is a significant backlog of needed infrastructure work to fix deteriorating buildings, water and sewer treatment systems and trails and roads in the state parks and state forests.

The legislature in recent sessions has recognized the need to continue the success of prior initiatives to address these ongoing issues, but no consensus on a new source of funding has emerged.

Restore Pennsylvania will provide significant new funding to enable new environmental projects and new recreational opportunities across the state, including infrastructure and maintenance in state parks, creation and revitalization of new local parks, and funding for new hiking, biking and ATV trail projects.

-- Energy Infrastructure/Conservation: Pennsylvania has always been an energy powerhouse. Our coal fueled the industrial revolution, our power plants keep lights on throughout the northeast.

Over the past decade, Pennsylvania has emerged as a leading state in production of clean burning natural gas, and we currently outproduce every state but Texas.

The first decade of development has seen a rush to build wells and pipelines to take gas to markets where it can be used.

In the second decade, we need to focus on making sure we capture the benefits of this prolific resource in Pennsylvania to spur manufacturing and drive job creation in downstream industries.

Royal Dutch Shell is currently undertaking the largest development project that this commonwealth has ever seen in Beaver County northwest of Pittsburgh. This is the first major project of its kind in the United States built away from the Gulf Coast region in a generation.

When this ethane cracker plant opens early in the 2020s, it will produce millions of pounds of plastic pellets, the building blocks for everything from water bottles to airplane parts.

To realize the full potential of this massive investment, Pennsylvania needs to seize the opportunity to jump start advanced manufacturing facilities that will take the building blocks, and turn them into high value products, employing Pennsylvanians with well paid, family supporting jobs.

To prepare for this opportunity and assist existing manufacturers and businesses across the state to take advantage of the benefits of locally-produced natural gas to lower costs, reduce emissions, and power an advanced industrial revolution in Pennsylvania.

Restore Pennsylvania will provide funding for infrastructure that helps build manufacturing facilities and other downstream businesses for the natural gas produced in Pennsylvania while helping businesses and individuals use more of Pennsylvania’s natural gas in their homes, creating jobs, lowering costs, and improving energy efficiency.

Restore Pennsylvania will provide funding to develop pad-ready locations in prime locations and areas ripe for development with an emphasis on downstream manufacturers and support for businesses.

This funding will expand the extremely successful Business in Our Sites program which empowers communities and economic development partners to attract expanding businesses by building an inventory of ready sites.

Approved projects can use the funding for any site development activities required to make the site shovel-ready. Sites can be previously utilized property or undeveloped property that is planned and zoned for development including former or underutilized industrial, commercial, military, mining, railroad, or institutional sites or buildings.

Restore Pennsylvania will provide increased spending flexibility to ensure that more communities and businesses across the state have access to low-cost, clean-burning natural gas and will also provide grants to help downstream businesses install combined heat and power and micro-grid systems at existing or new facilities.

-- Transportation/Transit: Pennsylvania has roughly as many state-maintained road miles as New England, New York, and New Jersey combined and keeping our large system in a state of good repair requires continued investment.

The American Society of Engineers’ 2018 “infrastructure report card” gives Pennsylvania a D+ rating for the quality of its roads and bridges and a D for transit.

A safe and reliable transportation network is essential for Pennsylvania residents, businesses, and visitors and improving and maintaining this extensive multimodal system requires stable, sufficient funding.

Restore Pennsylvania will provide funding for local road upgrades, create new flexible funding options for businesses that need local infrastructure upgrades to enable development projects, and multimodal and large-scale capital projects for transit.

Restore Pennsylvania will accelerate progress of projects to resurface, repave and repair four-digit roads and provide technical assistance and funding for dirt and gravel roads throughout the state.

Restore Pennsylvania will create a flexible funding tool to enable capacity upgrades needed to support development where TIIF funding is not available.

Restore Pennsylvania will support new capital projects at public transit capital projects throughout the state.

Click Here for a more detailed description of the entire Restore Pennsylvania initiative. Click Here for the Governor's announcement.

Gov. Wolf will make his formal budget address to a joint session of the Senate and House on February 5.

Reaction

PennFuture is taking a wait and see approach to Governor Wolf’s recently announced Restore Pennsylvania plan, due to concerns about its potential impact on climate change.

“The Governor has put together a bold plan to tackle the many infrastructure problems impacting Pennsylvanians that includes important investments in flood mitigation, recreation projects, and clean water infrastructure, but the devil is in the details,” said PennFuture President & CEO Jacquelyn Bonomo. “A closer look is needed at the size and potential impacts the proposed subsidies for natural gas and petrochemical businesses would have on Pennsylvania carbon reduction goals, which the Governor announced on January 8th.”

Restore Pennsylvania aims to invest $4.7 billion over four years to address five targeted infrastructure issues impacting Pennsylvanians: high-speed internet access, storm preparedness and disaster recovery, natural gas and petrochemical buildout, blight redevelopment, and transportation projects.

Details on how the projects will be chosen and how much investment would go to each bucket of projects have not been announced yet. Projects would be financed by a severance tax on natural gas.

On January 8th, Governor Wolf announced a historic executive order setting the first-ever carbon reduction target for Pennsylvania. The Executive Order calls for a 26 percent reduction by 2025 and an 80 percent reduction by 2050 from a 2005 baseline.

“Pennsylvania was hit hard in 2018 by unprecedented flooding and extreme rain events supercharged by rising global temperatures,” Bonomo said. “Communities need help rebuilding their infrastructure, not help supporting fossil fuel projects that will cause more extreme weather disasters, which is why I’m calling on the House and Senate co-sponsors of the Restore Pennsylvania legislation to take additional steps to allow financing for climate-safe projects like energy efficiency and renewable energy.”

Restore Pennsylvania is being co-sponsored in the State Senate by Senators John Yudichak (D-Luzerne) and Tom Killion (R-Delaware) as well as in the State House by Rep. Jake Wheatley (D-Allegheny) and Tom Murt (R-Montgomery).

Legislative details for the Restore Pennsylvania plan are forthcoming.

House Republican Leaders issued this statement about Gov. Wolf's Restore Pennsylvania proposal-- "The governor's proposal includes three of the worst ways to grow an economy: taxing, borrowing and uncontrolled government spending.

“While improving Pennsylvania's aging infrastructure is a shared goal, it cannot come at the expense of the Commonwealth's economy and taxpayers.

“Unfortunately, the governor has not included the General Assembly in the development of this proposal. If he had, he would know that there are not enough votes to enact a new energy tax, borrow billions of dollars and spend monies on more government programs.”

[Note: In 2012, a Republican General Assembly and Governor authorized a $4.5 billion bond issue to pay back the federal government’s unemployment compensation trust fund securitized by fees paid by state businesses.]

Marcellus Shale Coalition president David Spigelmyer issued this statement--

“Pennsylvania’s tax on natural gas – the impact fee – generates hundreds of millions of dollars annually for critical infrastructure programs across the entire Commonwealth. This existing annual tax revenue, when combined with other business taxes paid by the industry as well as lease bonuses and royalties tied to natural gas development on state land, has provided nearly $5 billion in revenue since unconventional shale gas development began.

“Imposing additional energy taxes will cost consumers, hurt local jobs, especially among the building and labor trades, and negatively impact investment needed to safely produce clean and abundant energy that’s ushering in a new era of manufacturing growth.

“We’ll continue to work with leaders in Harrisburg on solutions to drive continued economic growth, environmental progress and a brighter future for the entire Commonwealth.”

NewsClips:

Gov. Wolf Outlines Plan To Restore Critical Pennsylvania Infrastructure

AP-Levy: Wolf Seeks $4.5B Capital Program Paid By Marcellus Shale Tax

Esack: Wolf Wants $4.5 Billion to Corral Sewage, Attack Blight And Boost Internet Speeds

Wolf Wants Natural Gas Severance Tax To Pay For Massive Infrastructure Rebuild

Gov. Wolf Seeks A Severance Tax Once Again

Wolf Visits Wilkes-Barre To Pitch Severance Tax To Fund $4.5B Infrastructure Program

Wolf’s Plan To Restore PA’s Infrastructure Dependent On Gas Severance Tax

Wolf Again Pitches Plan For Taxing Marcellus Gas Drillers

Meyer: Wolf Wants To Fund Infrastructure With Shale Tax; Republicans Say Nope

Reuters: PA Governor Seeks Natural Gas Tax To Raise $4.5 Billion

Levee Plan In Lycoming Grows Complicated With Wolf’s Infrastructure Proposal