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Lawmakers question special fund tranfers

Governor seeks to tap money to pay for DEP

HARRISBURG — It didn’t take very long for House lawmakers from both political parties on Thursday to question Gov. Tom Wolf’s decision to tap special funds to pay for Department of Environmental Protection operations.

The first two legislators to pose queries to DEP Secretary Patrick Mc­Donnell during the House Appropriations Commit­tee’s budget hearing for the agency each hit on Wolf’s Fiscal Year 2019-20 state budget proposal that uses a combined $25.5 million from the state’s Environmental Stewardship Fund and Recycling Fund to help pay for the DEP’s general government operations and its environmental protection and management activities. Wolf’s proposed budget would appropriate $137.7 million for DEP, which represents a nearly $20.9 million, or 13 percent, decrease in General Fund appropriations from the current year, with the reduction to be offset by special funds.

According to McDonnell’s written budget hearing testimony submitted to the committee Thursday, the Chesapeake Bay Agricul­tural Source Abatement Fund, Transfer to Con­servation District Fund and funding for several commissions — all of which would come from the General Fund appropriations for DEP — will be appropriated from the Environmental Steward­ship Fund in the amount of $8.031 million. Another $7.449 million from the Environmental Steward­ship Fund and $10 million from the Recycling Fund is proposed to be utilized to augment department operations.

During Thursday’s hearing, the first legislator to ask questions — state Rep. Seth Grove, R-York, noting he’s not against the idea of using the special fund money — queried McDonnell as to why the Wolf administration changed its mind about such transfers.

“I think there’s two things,” responded Mc­Donnell. “One, these (the governor’s transfers) are transfers that are being done without any impact on the level of effort (supported by those funds).”

“In addition, I would say … the budgeting process is an annual one, so as they (the administration) looked broadly at how to manage this year’s budget, in particular in an environment of no revenue increases, this was one of the solutions that they came up with.”

McDonnell explained the decision to move the Growing Greener debt service responsibility of the Environmental Stewardship Fund out of the fund (Wolf proposes creating a restricted account into which $20 million of Personal Income Tax revenue will be deposited to pay for the debt service), allows the budgetary transfer to occur without affecting the operations of the fund. Additionally, he said the Recycling Fund is sitting on an excess of funds — due to a slowing and eventual one-year halt in fund grants being awarded because of prior uncertainties about whether the fee that helps to support the fund would be renewed — which will allow both the budgetary transfer and maintaining the normal level of effort by the fund.

House Appropriations Committee Minority Chair­man Matt Bradford, D-Montgomery, expressed concerns about transferring the money.

“We realize the structural challenges that this budget, and frankly several budgets in a row, have presented,” said Bradford, which he noted have required continued budgetary “hard choices” for lawmakers and the governor.

“The use of special environmental funds trouble many of us, and I wouldn’t be forthright with you if I told you many of my colleagues are supportive of that at this time,” Bradford continued. “They’re real concerned about the sustainability of these transfers long-term, and the impact they’ll have on the important programs that are funded through these special funds.”

He added that while he and his colleagues are glad to see some increases for the DEP, there’s “real tension and some real conflict” regarding the use of the special funds to support those increases.

Bradford said he’s already had some conversations with the administration raising questions about how the policy can be “sustainable over a period of years,” and he and his colleagues look forward to an explanation from the governor and his administration.

McDonnell, Bradford and others noted that while the governor’s Restore Pennsyl­vania proposal — the borrowing of $4.5 billion for infrastructure project with bond payments to be paid by the proceed from a proposed natural gas severance tax — isn’t specifically tied to the state budget, the expected funding could not only go a long way toward protecting against potential problems arising from the special fund transfers, but do far more than those special funds are capable of accomplishing.

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