NY’s Environmental Protection Fund “in deep trouble”
The New York State Environmental Protection Fund (EPF) was enacted during the recession of the early 1990s, at a time when medical waste was washing up on our shorelines, state and municipal parks where being closed or reducing operating hours and farmland was being lost to poorly planned development.
The EPF was intended to be a pay-as-you-go, dedicated source of funds that would be available in good times and bad to address myriad environmental issues including open space protection, solid waste, municipal parks and historic preservation. In the 15 years that the EPF has been in place, it has been a resounding success, jump-starting recycling projects, closing landfills, protecting ground and surface water, revitalizing waterfront communities, saving farmland and creating new state and local parks. But like the State’s budget, the EPF is in deep trouble.
Since it was enacted, the EPF has been funded primarily by the Real Estate Transfer Tax (RETT), growing from $30 million in 1993 to a peak of $255 million in 2008. While appropriations into the EPF have grown, the annual ritual of “sweeping,” unspent balances out of the Fund has undermined the health of the fund and created the current crisis. Since most of the programs funded by the EPF are based on reimbursements, money would accumulate in the EPF as projects developed and worked their way through the bureaucratic process.
Beginning in 2002, in the aftermath of the 9/11, then-Governor Pataki proposed “borrowing” a portion of the unspent EPF funds to help balance the State budget and the Legislature agreed. To ensure that the EPF would stay solvent, the Governor and Legislature included language in the budget allowing the Director of the Budget to make transfers into the EPF anytime there were insufficient funds to meet project commitments.
The environmental community was assured that this situation would not happen until well into the future and that the transfer language would assure that commitments would be met.
Apparently, we’ve been duped.
Since 2002, nearly a half a billion dollars have been “swept” out of the EPF. In the current 2008/09 fiscal year, $125 million was drained from the Fund, bringing its balance down to $3 million in January of this year. Meanwhile, State agencies like the Departments of Environmental Conservation and Agriculture and Markets and the Office of Parks, Recreation and Historic Preservation that administer various EPF programs have been making commitments for a variety of projects, totaling an estimated $100 million or more, and some dating back several years, that are ready for payment. By all appearances, these projects have come to a grinding halt and there is no sign that the State will make good on its multi-million dollar IOU.
It gets worse. In his 2009/10 budget, Governor Paterson recommends a $205 million EPF and yet another $45 million “sweep,” this time dispensing with even the promise to repay the money in the future. Further, the Governor’s budget recommends that only $80 million from the RETT go into the EPF and the nearly all of the balance be funded from the “Bigger, Better Bottle Bill” which would capture unclaimed deposits when consumers don’t return certain beverages to the supermarket. Although we strongly support this bill, which has been proposed in various forms for some 15 years, the EPF should not be left to rely on a revenue stream that is not yet in place and, we hope, will diminish over time as more and more consumers return beverage containers for recycling.
The Environmental Protection Fund has been the cornerstone of progressive, job-creating environmental projects in every corner of New York State for 15 years. It has provided for the protection of thousands of acres of farmland, provided support to museums, zoos and aquaria, increased recycling, and protected more than a million acres of the State’s spectacular open spaces. The practice of borrowing from the EPF to balance the State budget has to stop. New York’s credibility is on the line, as is the credibility of many non-profit organizations like the Open Space Institute, Audubon New York and land trusts from western New York to Long Island, who believed it when the State said that it would make good on its EPF commitments.
Joe Martens Al Caccese
President Executive Director, Open Space Institute Audubon New York
Democrat and Chronicle