Environmental advocates worry over creative math in Wolf’s budget

Gov. Tom Wolf's proposed budget, while avoiding a tax increase, uses an accounting technique reminiscent of a GOP budget plan he blasted in 2017. (Flickr)

Nonsense.

That’s how Gov. Tom Wolf, just two years ago, described a House Republican plan to to raid 47 budget accounts across Pennsylvania state government close a $1 billion hole in the state budget.

Now, as he rolls out the first budget proposal of his second term, Wolf has borrowed their accounting as he aims to funnel nearly $1 billion in new spending on public education, job-training, and pre-k programs while avoiding a tax hike.

A look at Wolf’s full $34.1 billion general fund budget proposal shows nearly $63 million in cuts to the two departments responsible for testing drinking water, preserving state parks and forests and regulating the state’s natural gas industry among other environmental tasks.

Last year, the state provided $129 million from the general fund to the Department of Conservation and Natural Resources, while it allocated $92 million this year. The Department of Environmental Protection, meanwhile, received $132 million after getting $157 million last year.

The administration wants to move money from three independent funds — the Recycling Fund, Keystone Recreation, Parks and Conservation Fund, and the Environmental Stewardship Fund — to fill the gap. 

Pennsylvania has more than 150 different special funds whose coffers are often filled by a specific tax or fee and put to a specific purpose. For example, the Keystone Fund was created in 1993 to preserve green space and fund parks and trails. Its balance is maintained by a 15 percent share of the state’s annual realty transfer tax revenue.

Between 1993 and 2016, the fund has invested $1 billion in over 4,500 different projects in all 67 Pennsylvania counties.

On top of regular expenses, the $68.4 million in transfers would reduce the balance of the Keystone Fund from $152 million to $7.5 million; the Environmental Stewardship fund from $121 million to $5 million, and the recycling fund from $85 million to $61 million by the end of the year.

The transfers would leave both department’s budget higher than last year. For the conservation department, it’s a nearly $20 million funding boast.

The administration contends that this move to use fund money is different from House Republicans’ earlier proposal. It’s not as broad as transfers proposed by legislators in the midst of a drawn out budget clash, won’t interfere with funding new projects, and the revenue out will be replenished.

“The budget office believes these are amounts that the funds can sustain while still meeting grant needs on an annual basis for new projects,” administration spokesman J.J. Abbott said in an email.

The proposed budget also relieves the stewardship fund of $26 million in debt, leftover from the Rendell administration, which the administration hopes can be shuffled back to environmental projects.

According to Wolf’s budget proposal, the fund use is expected to continue for at least the next five years.

Abbott also added that the proposal anticipates the passage of Wolf’s Restore PA infrastructure package, which calls for $4.5 billion in bonds to fund high speed rural broadband, natural gas pad preparations, public transit and a host of other measures.

However, that proposal was absent from Wolf’s Tuesday budget speech. And it received a lackluster reception from legislative Republicans who don’t seem willing to bite on a tax increase at this time despite the promise of investment in some of their priorities.

Still, the reality that the state needs more funds for its environmental agenda, such as better flood water management, is what prevents David Hess, former environmental protection secretary under Republican Gov. Mark Schweiker, from pre-judging the funding shift.

“It could be a wash, but we’re facing a lot of obligations, in particular on the clean water side. That would mean the Governor’s Restore PA initiative is going to be critical,” Hess said.

A decade ago, $60 million was chopped from the environmental protection budget in the midst of recession, leaving the agency with $160 million in funding. That number has not budged since.

“Democratic and Republican administrations have been very quick to cut budgets, and I’ve rarely see the cuts being made up in some other way,” Joe Minott, executive director of the Philadelphia-based Clean Air Council, said.

So overall, some wariness does exist that environmental programs could get the short end of the stick come budget crunch time, John Walliser, senior VP of legal and government affairs at the Pennsylvania Environmental Council, said.

Walliser’s group doesn’t support using the specialty funds to cover operational costs of state agencies, and saw it as taking from one program to support another.

If Restore PA turns out to be success, Walliser noted, the whole argument could be moot as environmental efforts would get an influx of cash. But until the votes are tallied, he’ll be watching.

“We’ll wait and see,” Walliser said. “We’re not sure how it’s all going to play out, but at this point in time we’re concerned.”

Capital-Star reporter Elizabeth Hardison contributed to this story.

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