July 7, 2016. A few notes on how the General Assembly allocated state funds for the environment.
A New Trend Toward Funding Environmental Studies at UNC-CH — The legislature directed (and in most cases funded) the University of North Carolina at Chapel Hill to study or convene stakeholder groups on environmental and natural resource policies rather than assigning those projects to the Department of Environmental Quality (DEQ) or to a legislative study committee:
♦ The budget directs UNC to create a North Carolina Policy Collaborative to “facilitate the dissemination of the policy and research expertise of UNC for practical use by State and local government”. The Collaborative will focus on research related to natural resource management, including “research related to the environmental and economic components of the management of the natural resources within the State of North Carolina and of new technologies for habitat, environment and water quality improvement.” The legislature appropriated $1 million to the UNC Board of Governors for the N.C. Policy Collaborative for the 2016-2017 fiscal year.
♦ A UNC-led stakeholder group will study efforts to “ecologically restore and achieve economic sustainability” the state’s shellfish aquaculture industry. The budget provision directs the UNC-Chapel Hill Chief Sustainability Officer (Brad Ives, former Assistant Secretary in DEQ) to lead the stakeholder group. The legislature did not appropriate funds for the effort.
♦ The budget creates a new study of water quality programs to reduce nutrient pollution focused on the Falls Lake and Jordan Lake nutrient reduction strategies. See an earlier post for more detail on the substance of this budget provision and the effect on enforcement of the Falls Lake and Jordan Lake water quality rules. The legislation gives the UNC-CH Chief Sustainability Officer responsibility for this study as well and provides funding at $500,000 per year for six years. (The budget provision allocates an additional $1.3 million to DEQ in 2016-2017 to study in situ technologies to reduce nutrient impacts.)
These represent unusually large and extended state investments in environmental studies. The combined UNC/DEQ appropriations for environmental research, collaboration and water quality studies total $2.8 million just for FY 2016-2017. The UNC nutrient study will be funded at $500,000 per year for another five years beyond that. By comparison, the legislature appropriated only $100,000 for a one-year study of another high profile environmental issue — hydraulic fracturing — in 2011-2012. Another reference point may be the annual budget of $4.1 million for the state’s non-point source water pollution program; the 2016-2017 appropriations for environmental studies represent 2/3 of the annual operating budget for the non-point source water pollution program.
Earmarked Funds for Water and Wastewater Infrastructure. Most new funding for DEQ’s Water Infrastructure Division to support local government water and wastewater projects has been earmarked for specific projects. Of the approximately $18.8 million in water/wastewater funding added to DEQ’s 2016-2017 budget, the legislature directed approximately $16.6 million to the following projects:
$400,000 to an unnamed municipality (population < 100) for wastewater improvements needed to eliminate illegal wastewater discharges.
$1,000,000 to Duplin County for improvements to the on-site wastewater system at an elementary school
$700,000 to the Town of Fontana Dam for wastewater system upgrades
$14.5 million to fund extension of water lines to cities and counties in an as-yet unformed Regional Water and Sewer Authority intended to include Guilford County, Rockingham County and one or more municipalities. If the Regional Water and Sewer Authority is not formed by June 30, 2017, the funds revert back to the state’ General Fund. (In other words, the funds cannot be allocated to other water and wastewater projects.)
Restoration of Funds for Commercial UST Cleanups and the Water and Air Quality Account: Some transportation-related environmental programs have long been funded by a small portion of the state’s gas tax. Those programs include the Commercial Underground Storage Tank Fund, (which pays to clean up petroleum contamination from leaking underground storage tanks at convenience stores, gas stations and other businesses) and the N.C. air quality program. In 2015, the legislature replaced the on-going gas tax allocation to these two programs with a one-time appropriation and ordered a program review. The main purpose of the review was to look at the diversion of gas tax money from the Highway Fund to non-highway uses — a legislative concern for several years. The 2016 budget restores the gas tax allocation to both programs, putting them back on a stable (although not necessarily adequate) funding source.