Four months past the deadline for approving a state budget, Pennsylvania lawmakers have finally agreed on how to pay for the $32 billion spending plan they adopted in July.
They did nothing, though, to bolster a budget that offers no new money for Chesapeake Bay restoration, drinking water protection and other environmental programs. In fact, they opened the door to siphoning money from special funds dedicated to conservation and pollution cleanup.
Gov. Tom Wolf signed revenue bills this week to complete the 2017 budget process, a third of the way into the fiscal year. Since July, the Republican-dominated General Assembly debated and defeated any proposals to levy or raise taxes to fill a $2 billion revenue gap.
Bills that would have taxed the state’s booming natural gas industry and similarly lucrative product warehouse businesses got shot down. Instead, legislators settled on borrowing and expanding gambling, as well as tapping into agency set aside funds to the tune of $300 million. Before the 2017 budget can be finalized, Wolf must choose which special funds will be tapped to provide $300 million for the general fund.
Agency staff and advocates for health care and the environment, among others, are waiting anxiously to see how much will be siphoned from which pots of money.
The House budget had originally called for shifting more than $600 million from special funds, including the Growing Greener environmental program and the industrial sites cleanup fund, to help close the funding gap.
Still, House Republicans continued to bat around a tax on natural gas production — the last remaining version of four gas tax bills introduced since July. This version doesn’t direct any of the prospective revenue to environmental programs, but one advocate, Andrew Heath, executive director of the Pennsylvania Growing Greener Coalition, hopes that can be done with an amendment and that the legislature will finally pass the measure this year. Pennsylvania is the only gas-producing state without a severance tax.
“We have had positive conversations with the Democratic leadership and a small number of Republicans in the House,” Heath said. “I’m hopeful if there ever is a severance tax, that there needs to be an investment made in the environment. At least, it will be a step in the right direction, especially during a time when we were looking at massive cuts and raids.”
The bill is still waiting for House action. House Majority leader Dave Reed didn’t return calls about the bill Wednesday or Thursday.
Wolf, a Democrat, has proposed a gas severance tax for three years running, but has gotten nowhere with the tax-averse Republicans controlling the legislature. The energy industry, meanwhile, has spent a lot of money to fight the tax and regulations affecting its operations, including nearly $60 million on lobbying and about $9.5 million in campaign contributions since 2007, according to Marcellus Money, a joint project of Common Cause and the Conservation Voters of Pennsylvania.
Environmental advocates also worry that a gas severance tax could come with anti-environmental tradeoffs, including a proposed amendment that would strip the state Department of Environmental Protection of authority to review the potential impacts of new oil and gas projects. The industry wants well permitting privatized, arguing that would streamline a cumbersome state review process.
John Dawes, executive director of the Foundation for Pennsylvania Watersheds, called the environmental riders attached to the severance tax bill “disgraceful” and a violation of Pennsylvania’s constitution, which includes an Environmental Rights Amendment that requires lawmakers to protect the state’s natural resources in all their decisions.
Despite repeated warnings from the U.S. Environmental Protection Agency that Pennsylvania is lagging in meeting its obligations to help clean up the Chesapeake Bay, and is failing to provide adequate oversight of the state’s drinking water systems. Overall, environmental programs had their funds cut in the current budget, some by as much as 50 percent.
The only new money for the Bay cleanup in Pennsylvania has come via grants — including $5.8 million awarded by the National Fish and Wildlife Foundation last month. One of those grants provides $750,000 to the state Department of Conservation and Natural Resources to get more trees planted along streams. Last year, the foundation gave the state Department of Agriculture $632,000 to get more farmers to put pollution-reducing “best management practices” on their land.
Several lawmakers, including some Republicans, say the state’s penny-pinching on the environment has to end.
“We need to come up with a separate mechanism to fund water quality programs,” said Rep. Garth Everett, a Republican representing Lycoming County who is chairman of the Chesapeake Bay Commission, a tri-state legislative advisory body. “We are never going to have enough money in the general fund with all of the other issues we have to solve.”
One possibility, Everett suggested, is the so-called Clean Water Procurement bill introduced by two other Pennsylvania lawmakers on the Bay commission. That controversial bill, irreverently dubbed the “Bion bill” because of its drafting by a bio-energy company of that name, would have communities required to reduce stormwater pollution pay instead into a fund to finance projects aimed at reducing farm runoff by converting cattle manure to energy and other byproducts. The newest version included an amendment to make the financial commitment voluntary, but critics still worry that it’s a bailout for Bion Environmental Technologies, which has defaulted on state loans it received for a shuttered manure treatment project at a Lancaster County dairy farm.
“We understand the issues that folks have with the bill,” said Chad Reichard, legislative director for Sen. Richard Alloway II, a Republican representing a portion of Southcentral Pennsylvania. “We will have intimate conversations with people who understand the issues and hammer out the details.”
Another Bay commission member, Rep. Mike Sturla D-Lancaster, has introduced a bill to levy a water-use fee. Revenues would pay for water quality improvement projects. Sturla’s office said that a legislative committee’s study of the costs and benefits should be completed by the end of this year. As proposed, the fee could generate up to $250 million a year statewide for environmental programs. Alloway is expected to introduce a companion bill in the Senate.
Everett said that the EPA has made it very clear that Pennsylvania needs to put more money and more effort into Bay restoration.
“We’re looking at what other Bay states have done, to see if there are solutions that may work for PA,” Everett said. “We’re putting everything on the table … We’re going to need more than one solution.”