Tuesday, December 16, 2008

Adk Council: Budget Will ‘Savage Environmental Fund’

Governor Paterson released his budget proposals today and it doesn’t look good for the Environmental Protection Fund. Here is a note, just received from the Adirondack Council’s John Sheehan:

There is a great cause for worry about Gov. David Paterson’s first Environmental Protection Fund (EPF) spending plan, which was released today.

The governor proposes deep cuts in the programs supported by the EPF and proposes a fundamental change in the main source of revenue for the fund – from a stable, adequate source, to a speculative, untried funding scheme that has been blocked by the Senate for 20 years – threatening the EPF’s very survival.

The EPF was created in 1993, during the recession that followed the George H.W. Bush’s one term as president. New York was in a financial mess. Legislative leaders wanted to get out of the bad habit of using bond-act borrowing as the funding source for all major environmental capital projects (new park lands, recycling facilities, trash transfer stations, landfill caps and methane extraction, etc.). So, the Legislature enacted a modest tax on real estate purchases and sales, to be used as a dedicated funding source for the EPF.

The plan worked well. Each year, the EPF grew a little bit bigger to keep pace with the state’s needs. Yet the EPF was consuming less than half of the Real Estate Transfer Tax. For example, in 2008, the RETT generated more than $1 billion. Only about $200 million was directed into the EPF. The remainder was a windfall to the state budget. Even this year, it will generate more than $400 million.

Now, the Governor wants to redirect nearly every cent of the RETT into the state budget’s General Fund, where it can be used for anything (except environmental capital projects). He proposes to replace the RETT with revenue from the proposed expansion of the Bottle Bill – a fee the state has never collected.

For the 20-plus years that New York has required a five-cent deposit on beer and soda containers, any unclaimed deposits were kept by the beverage companies. This amounts to a state-sanctioned giveaway of an estimated $200 million annually. But estimating the amount isn’t the same as collecting the actual money. The state isn’t even sure of the total it might collect if it demanded the return of the unclaimed nickels.

That’s because the NYS Senate has blocked this legislation for 20 years at the behest of the beer and soda industry. Coke, Pepsi, Anheiser-Busch, Miller and other bottlers don’t want to give the money back. For two decades, they have responded to public outcry for an expanded bottle bill by spending millions of dollars on campaign contributions, lobbyists and public relations experts whose goal was to weaken public support. It worked. It always does.

Still, the Governor would have us believe that he will roll right over Coke, Pepsi and Bud. He will get the nickels back and expand the deposits to non-carbonated beverages. He will also, he revealed in today’s budget plan, call on the Legislature to impose a “fat tax” on non-diet soda sold in New York. So that’s two fights at the same time with the state’s best-funded lobbyists.

If the Governor removes the RETT funding from the EPF, but doesn’t manage to collect the unclaimed nickels, the total available for the EPF in 2009 would be $80 million,

Specific Changes proposed to EPF by the Governor: Keep in mind that most of the items listed below are supposed to support mandated services provided by local governments. Without the state’s help, local property taxpayers will be forced to pay the entire cost.

Total Revenue: Drops from $255 this year to $205 next. The Governor and Legislature already raided the EPF fund balance in April 2008, raking out $125 million not yet spent on the projects for which they were dedicated. The budget contains provisions for an additional raid of $50 million in January and another $25 million by April 2009. It is not legal to raid the EPF. The Governor and Legislature must approve specific legislation repealing the “dedicated funding” in the current EPF law before it would be allowed to pry open the figurative “locked box.”

Land Acquisition: Drops from $66.5 million this year to $58 million in 2009; about a 12 percent decrease, or roughly the same as other parts of the state budget.

Waterfront Revitalization: Drops from $27 million to $9 million in 2009.

Farmland Protection: Drops from $30 million to $17.5 million in 2009.

Municipal Parks: Drops from $21 million to $8 million.

Smart Growth (planning assistance to local government): Drop from $2.5 million to $2 million in 2009.

Invasive Species Control: Drops from $5 million to $1.5 million; it should be increasing to $10 million so the state can create an information clearinghouse and support center at Syracuse University, Cornell or another forestry school.

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