Gov. Rendell this week signed Senate Bill 1100 into law, restoring the Capital Stock and Franchise business tax as the dedicated source of funding for Hazardous Sites Cleanup Program as originally proposed by Gov. Casey in 1988.

Senate Bill 1100 (Pileggi-R-Delaware) provides $17 million for the Hazardous Sites Program for the remainder of this year from the legislative accounts of all four Senate and House Caucuses. It also earmarks $40 million out of the state Capital Stock and Franchise Tax for the following three fiscal years. The bill does not affect the commitment to phase out this tax by the end of 2010.

This is the third Hazardous Sites Program funding proposal passed overwhelmingly by the Senate in the last two years. The bill restores the original funding source for the program Gov. Casey created in 1988. The program used this business tax as the primary source of funding from 1988 to 2002.

This agreement ended the diversion of $50 million from the Environmental Stewardship Fund (the Growing Greener I watershed protection and other programs) over the last two fiscal years to fund the Hazardous Sites Program.

Funding the Hazardous Sites Program was left undone as part of the July budget settlement when an agreement between Gov. Rendell and the Senate to fund the program using excess monies in DCNR’s Keystone Parks, Recreation and Conservation Fund was opposed in the House.

As part of the final budget agreement in July, Gov. Rendell, the House and Senate agreed to find a funding solution for the Hazardous Sites Program before the end of the year, which they achieved.

As part of the mid-year budget briefing last week, Budget Secretary Michael Masch predicted the current fiscal year would end with a $117 million surplus and that the Rendell Administration would ask for a mid-year $40 million in supplemental funding, over and above the surplus, for the departments of Education and Public Welfare to support their programs.

The Governor said he signed the bill because Pennsylvania cannot afford to delay the continuation of the program, especially when there are many sites that could pose significant health risks to residents if they are not remediated.

However, the Governor said he signed the bill reluctantly.

“First, it does nothing to provide a stable, dedicated source of funds for hazardous site cleanup for the long term,” the Governor wrote. “It is a short term fix, and in a few years’ time we will face the exact same funding shortfall we have struggled with for almost my entire 5 years in office.

“I have proposed numerous methods to provide a dedicated source of funds for this program over the past several years, including my original 2004 proposal to use fees on toxic waste emissions and trash disposal. My proposals would have ensured a permanent, reliable and dedicated revenue stream for this critical program.

“Second, SB1100 is bad legislation because it seeks to spend money outside of the annual budget process without providing new revenues to cover the new spending. In my years as Governor, I have worked to assure that spending decisions are made in the context of the entire budget. If revenue is limited to only existing sources, then a decision to spend in one area is by definition a decision to cut somewhere else,” he said.

NewsClips: Editorial: Find Funding for Hazardous Sites

Editorial: Toxic Cleanup Fund Deserves Fair Share

12/21/2007