EPA Proposal Cuts Water Infrastructure Funds, Increases Air, Water Pollution Grants

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By Patrick Ambrosio
Contributing to this story was Pat Rizzuto

President Obama Feb. 13 proposed a fiscal year 2013 budget containing $8.3 billion in discretionary funding for the Environmental Protection Agency, a $105 million decrease from fiscal 2012 achieved through cuts to state wastewater treatment and drinking water funds.

The proposed 1.2 percent decrease in EPA funding would mostly come from reduced funding for the clean water and drinking water state revolving funds, which provide capitalization grants to states for loans for water infrastructure.

The president's budget also would reduce funding for superfund cleanup efforts and eliminate a clean diesel grant program and replace it with a combination of rebates and grants.

The budget proposal contains increased funding for priority programs, including a large increase for state and tribal air quality and water pollution programs. While overall assistance to states would decline, EPA's operating budget would increase under the budget proposal from $3.57 billion in fiscal 2012 to $3.74 billion in fiscal 2013.

The proposal would increase funding for targeted water infrastructure and Chesapeake Bay restoration, while maintaining funding levels for leaking underground storage tanks programs and the Great Lakes Restoration Initiative.

Governmentwide Effort to Cut Spending

EPA Administrator Lisa Jackson told reporters during a Feb. 13 telephone news briefing that the proposed budget is part of a “governmentwide effort to reduce spending and find cost savings.”

“It demonstrates the fiscal responsibility called for at this moment,” Jackson said. “Some difficult choices are being made in this budget.”

In other environmental spending, the president's proposed budget for the Energy Department emphasizes development of clean energy sources. The budget proposal also includes a slight increase in funding for the Interior Department. (See related stories in this issue on the Interior Department and clean energy programs.)

Moreover, the administration's budget requests a 1.4 percent increase in federal research programs, including increases for the National Nanotechnology Initiative and climate change. Pipeline safety programs also would see a significant budget increase. (See related stories in this issue on nanotechnology, climate change, and pipeline safety).

Proposed Cuts to Water Revolving Funds

Most of the savings achieved in the president's proposed EPA budget are the result of a $359 million decrease in funding for the clean water and drinking water state revolving funds.

The budget proposal calls for approximately $1.18 billion for the clean water state revolving fund, which provides funds for wastewater treatment and watershed management programs. This is a 19.8 percent reduction from the approximately $1.47 billion enacted in fiscal 2012.

The drinking water state revolving fund would see a smaller decrease under the president's budget, which allows for $850 million in fiscal 2013. The drinking water state revolving fund received $918 million in fiscal 2012.

The revolving funds allow states to make loans to municipalities to fund water infrastructure projects. EPA said in its budget justification document that the agency will work to target assistance to “small and underserved communities.”

Concerns Raised About Cuts

Steve Brown, executive director of the Environmental Council of the States, told Bloomberg BNA that although ECOS was expecting a cut to the SRFs, the proposed cuts are “a little more than we were hoping to see.”

Brown added that “everybody goes to the SRF to find money” when looking for a place to cut funding.

Brown said that ECOS was pleased to see that some of the funding taken away from the state water revolving funds was redirected to state categorical grants.

However, he noted that EPA's decision to eliminate funding for state categorical grants for beaches will likely have some opposition.

“I know there is going to be a reaction to that,” Brown said.

Proposed Increase for State, Tribal Grants

The president proposed $1.2 billion in grants to support state and tribal delegated environmental programs, up from the approximately $1.1 billion enacted in fiscal 2012.

The proposal includes $265 million in state water pollution control grants, an increase of $27 million compared to fiscal 2012, and $302 million in state grant funding for air programs. That funding level will provide an additional $66 million to aid state implementation of more stringent air quality standards.

Bill Becker, executive director of the National Association of Clean Air Agencies, told Bloomberg BNA that he is “very pleased” with the proposed increase to the air quality program grants, which he described as being “sorely needed” following recent federal, state, and local funding cuts brought on by the economic downturn.

“This money will help agencies do better monitoring, develop the infrastructure for their air pollution programs, and provide better services to the public,” Becker said. “We are hopeful that Congress will follow the president's lead on this.”

The proposed budget also calls for the end of the Multi-Media Tribal Implementation grant program in favor of a $29 million increase in funding for the Tribal General Assistance Program, which is designed to build tribal capacity and assist tribes in leveraging federal funding to boost environmental and health protection.

Superfund Tax Proposed

The proposed fiscal 2013 budget would reduce spending on the superfund program, which would see its funding cut by $38 million.

The budget proposal calls for approximately $1.18 billion for the superfund program in fiscal 2013, compared to the $1.21 billion fiscal 2012 enacted level.

Most of the savings are attributed to targeted reductions to the Hazardous Substance Superfund Remedial Program, which would see its budget cut by $33 million to $532 million in fiscal 2013. The reductions will target non-time critical activities in order to ensure that the funding cut does not negatively affect public health, according to the budget.

The president also proposed to reinstate the superfund tax on petroleum products and hazardous chemicals. The tax, which would be used to support the hazardous waste cleanup fund, would generate an estimated $1.45 billion in revenue in fiscal 2013, according to the budget proposal. The administration has proposed in previous budget requests to reinstate the tax, although Congress has rejected the proposal.

In total, the budget estimates that reinstating the superfund tax would generate approximately $21 billion in revenue from fiscal 2013 through fiscal 2022.

The budget proposal calls for the leaking underground storage tanks program to receive $104 million in fiscal 2013, consistent with the fiscal 2012 enacted level. EPA would receive $93 million in funding for the assessment and cleanup of brownfields contaminated sites, a $2 million reduction from fiscal 2012.

Clean Diesel Grant Program Replaced

The president also proposed to eliminate the Diesel Emissions Reduction Act grant program, which funds retrofits and replacements of older diesel engines that emit more pollution than other engines. The grant program received $30 million in funding in fiscal 2012.

The fiscal 2013 proposal calls for the elimination of the grant program, which would be replaced by a program that would provide rebates on the purchase of pollution control technology and grants for state and local revolving loan programs. The grants and rebates would be targeted to communities that exhibit the greatest need, including low-income communities and areas near ports and freight distribution hubs.

The administration proposed $15 million in funding for the rebates and revolving loan grants. The program is designed to transition away from the need for ongoing federal support, according to EPA's budget justification.

Chemicals, Pesticides See Increase

The president's budget request includes $699.2 million for chemicals, pesticides, and pollution prevention activities, a $36.4 million increase over enacted fiscal 2012 levels.

EPA's summary of the request said the increase would enable the chemicals office to develop hazard characterizations for 450 high production volume chemicals.

As a result, by the end of fiscal year 2013, EPA would have completed hazard assessments on 2,433 of 3,761 HPV chemicals identified before new production volume data are filed this year. High production volume chemicals are manufactured in volumes of 1 million pounds or more.

The budget would propose a cut of slightly more than $1 million for work on endocrine disruptor chemicals.

The chemicals program proposed a $2.3 million decrease by eliminating the fibers program that addresses asbestos management and reducing guidance to manage the disposal of polychlorinated biphenyls.

The $699.2 million proposal would provide EPA's pesticides program $129 million in fiscal 2013.

Additional funding for other chemical-related agency activities is requested in sections of EPA's budget addressing research and enforcement.

Funding Maintained for Great Lakes

The fiscal 2013 budget request proposed to maintain funding for the Great Lakes Restoration Initiative at $300 million.

The funding will allow for the implementation of restoration activities focusing on the cleanup of toxic substances and areas of concern—addressing invasive species and the mitigation of habitat degradation and loss.

The budget proposal also would increase funding for Chesapeake Bay restoration by $15 million to aid state efforts to reduce nutrient and sediment pollution in the Chesapeake Bay watershed.

Electronic Reporting Effort Expanded

EPA's fiscal 2013 proposed budget calls for a $36 million investment to upgrade compliance reporting and oversight activities for emissions.

The funding would allow EPA to expand the use of electronic reporting of data on permits and compliance, as well as use new technologies for detecting violations.

The budget proposal also calls for $5 million to increase compliance inspections at high-risk oil and chemical facilities. The increased funding would allow inspections of these facilities every seven to 10 years. Currently, the high-risk facilities are inspected every 20 years.

For More Information

A detailed description of the proposed budget for the Environmental Protection Agency is available at http://www.epa.gov/planandbudget/annualplan/FY2013_BIB.pdf.

A summary of the EPA budget request is available at http://www.whitehouse.gov/sites/default/files/omb/budget/fy2013/assets/environmental.pdf.


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