Analysis of the 2008-09 Budget Bill: Resources

Department of Fish and Game (3600)

The Department of Fish and Game is responsible for promoting and regulating hunting and fishing for game species, and for promoting resource protection for all California native plants, fish, and wildlife. The Fish and Game Commission sets policies to guide the department in its activities. The department currently manages about one million acres including ecological reserves, wildlife management areas, hatcheries, and public access throughout the state.

The budget proposes total expenditures of $393 million from various sources, a decrease of about $147 million below estimated current–year expenditures. Most of this decrease reflects a reduction in available Proposition 50 bond funds ($57 million), an adjustment to anticipated federal reimbursements ($36 million), and various General Fund budget–balancing reductions ($8.4 million) in the budget year. Of the total proposed expenditures, $87 million comes from the Fish and Game Preservation Fund (FGPF) (22 percent), $75 million from the General Fund (19 percent), $51 million from federal funds (13 percent), $49 million from Proposition 84 bond funds (12 percent), and the rest from reimbursements and other special and bond funds.

Several of the programmatic changes in the department’s budget relate to expenditure of Proposition 84 funds, including expenditures for the CALFED Bay–Delta ecosystem restoration program ($21 million), anadromous fish management ($11 million), and Salton Sea Restoration activities ($11 million).

LAO Recommended Fee Proposals Can Partially Offset Budget–Balancing Reductions and Generate Additional Savings

As part of its budget–balancing reduction proposal, the administration proposes to reduce the department’s General Fund budget by $1.7 million in the current year and $8.4 million in the budget year. We recommend the Legislature increase fees or create new fees for regulatory

programs and shift funding for law enforcement activities to a special fund to offset the Governor’s General Fund reductions for these activities and create additional General Fund savings. We also recommend that the Legislature partially reject the proposed General Fund reduction for administrative activities. The net effect of our recommendations would be an additional $6.6 million in General Fund savings in the budget year. (Reduce Item 3600–001–0001 by $6.1 million. Reduce Item 3600–001–0140 by $650,000. Reduce Item 3600–001–0890 by $100,000. Reduce Item 3600–101–0001 by $500,000. Increase Item 3600–001–0200 by $6.3 million. Increase New Special Fund Item by $3.5 million. Increase Item 3600–001–0320 by $2.6 million.)

Governor’s Budget–Balancing Reductions. The Governor’s budget proposal includes General Fund budget–balancing reductions of $1.7 million in the current year and $8.4 million in the budget year. These reductions are spread across several program areas within the department, as shown in Figure 1.

As is shown in the figure, the budget–balancing reductions will impact a number of program areas, including regulation and enforcement of existing environmental and natural resource laws. In particular, the administration proposes to reduce the department’s review of California Endangered Species Act permits, Natural Communities Conservation Plans (NCCPs), and timber harvest plans (THPs). The administration also proposes to eliminate 38 Fish and Game warden positions.

Recommend General Fund Reductions for Regulatory Programs Be Offset With Increased Existing and New Fee Revenues. Several of the program areas proposed for reductions are regulatory program activities that currently receive some fee–based support or could be supported with revenues from new fees. In particular, the following program areas have existing fees or could be supported by fees:

• California Endangered Species Act Review. State law requires the protection of all species that are designated as threatened or endangered. The department has statutory responsibility to enforce these laws and is also empowered to grant permits for “incidental take” of protected species where activities—such as development—can be done in a way that does not threaten protected species’ long–term survival. Currently, there is no existing fee for this activity in statute.
• NCCP Review. In state law, there is an alternative to the Endangered Species Act approach of looking at individual species. Under the Natural Communities Conservation Planning Act, government agencies and/or private entities can create long–term, ecosystem–based conservation plans designed to protect multiple threatened or endangered species. This system allows for a more comprehensive approach to species protection, while at the same time giving the proponents of a plan assurances about future regulation, thereby allowing them to proceed with projects that may impact species in the future. Under state law, the department is required to review and approve any proposed NCCP. Existing law allows the department to recover its costs through fees, but currently there is no fee in place.
• THP Review. We discuss the department’s role in the review and enforcement of THPs in our “Funding Timber Harvest Plan Review and Enforcement” write–up in the “Crosscutting Issues“ section of this chapter. In current statute, there is a fee charged by the department for THP review—although the fee does not cover the department’s full cost of carrying out review activities.

Currently each of these programs is either partially supported by fees or could be, based on the “polluter pays” principle and the “beneficiary pays” principle. In each case, the department is responding to proposals by the regulated community that impact natural resources. Because the department’s efforts in these programs are driven directly by the activities of the regulated community, we think it is appropriate that the regulated community pay the full cost of operating these regulatory programs. Additionally, approval by the department benefits the regulated community by allowing revenue–generating projects to proceed. Therefore, we recommend that the Legislature:

• Enact legislation to create a new fee to fully fund the review of California Endangered Species Act permits and correspondingly increase the department’s expenditure authority to allow it to spend $3.7 million in new fee revenues from the Fish and Game Preservation Fund;
• Increase the department’s expenditure authority to allow it to spend $3 million in new fee revenues from the Fish and Game Preservation Fund collected under the Natural Communities Conservation Planning Act;
• Increase the department’s expenditure authority to allow it to spend $3.5 million in additional fee revenues from a new special fund to support the review of THPs (we discuss the legislation required to create the new fee and the special fund in our “THP” write–up in the “Crosscutting Issues” section of this chapter) and decrease the department’s appropriation from the Fish and Game Preservation Fund by $443,000 to reflect a shift in funding for this activity to the new fund.
• Reduce the department’s General Fund appropriation by $7.3 million to reflect these funding shifts.

Offset General Fund Reductions for Law Enforcement With Special Funds. In addition to the regulatory programs proposed for reduction, the administration proposes to reduce General Fund support for the department’s Law Enforcement Division. Since 1999, the number of authorized game warden positions has declined about 30 percent—mostly due to budget cuts which eliminated vacant positions. At the same time, the department’s environmental protection responsibilities have increased—including new programs such as the Marine Life Protection Act and increased invasive species prevention. We find that additional reductions in game warden staffing levels will make it increasingly difficult for the department to meet its statutory mandates for environmental protection and the preservation of fishing and hunting opportunities.

We believe that the proposed General Fund budget–balancing reduction in the Law Enforcement Division can be offset in the budget year and subsequent years by providing additional special fund support for this program, as discussed below.

The Office of Spill Prevention and Response (OSPR) within the department is responsible for preparation and response to oil spills. The OSPR is principally funded by the Oil Spill Prevention Administrative Fund (Administrative Fund), which is a special fund supported by a surcharge on imported oil. In the event of an oil spill—such as the recent Cosco Busan spill in the San Francisco Bay—some of the first personnel on the scene from the department are game wardens. The department’s dispatch system and patrol boats allow game wardens to be directed quickly to an area where there is a potential oil spill. Currently there are about 20 game wardens assigned to OSPR and supported by the Administrative Fund. (These wardens participate in oil spill prevention and response activities, as well as enforcing the rest of the department’s statutory responsibilities.) Once on the scene of an oil spill, game wardens can use the department’s dispatch system to coordinate response activities with OSPR, the U.S. Coast Guard, and other response agencies.

We therefore recommend that the Legislature appropriate $2.6 million from the projected balance of the Administrative Fund to offset the proposed General Fund budget–balancing reduction in the Law Enforcement Division. (We note that the Administrative Fund has a persistently large fund balance that can accommodate this augmentation for at least five years at current fee levels and program activity.) Because oil spills occur intermittently and can occur in any coastal waters, we do not recommend assigning additional game wardens to OSPR full–time. Rather, we believe that using the Administrative Fund to support a portion of the existing positions in the Law Enforcement Division will provide the department with the continuing capacity to use game wardens to respond to oil spills, while allowing them to continue to carry out other department responsibilities. (While the department can recoup its costs for all response activities from the parties responsible for the spill, it is important that the department has the resources in place to respond to an oil spill event.)

Our recommendations for fee increases, new fees, and funding shifts in order to offset the Governor’s budget–balancing reductions in the budget year are summarized in Figure 2.

Administrative Program. Of the $964,000 in proposed General Fund budget–balancing reductions for the budget year in the department’s administrative program, we recommend the Legislature reject the proposed reductions for training ($400,000) and accounting services ($287,000). Cutting the department’s training budget may reduce the department’s ability to fill vacant game warden positions—a legislative priority in the current year. The department, like many state agencies, faces a large number of retirements in coming years. Reducing the department’s training budget will decrease its capacity to prepare new and existing employees for future leadership positions in the department.

Given the complexity of the department’s funding sources (27 different funds and dozens of accounts within some of those funds), the department’s administrative personnel must keep careful track of program budgets and activities to ensure that activities are funded from the correct fund or account. Reducing the department’s accounting capacity would reduce the department’s ability to effectively oversee its complex budget. Improving the department’s fiscal management has been a legislative priority in recent years. Reducing the department’s accounting capacity may undo progress made by the department in recent years. These relatively modest General Fund restorations totaling $687,000 are easily offset by the additional General Fund savings created by adopting our fee–based recommendations above.

The net effect of our recommendations for fee increases, funding shifts, and rejected General Fund budget–balancing reductions is a General Fund savings of $6.6 million beyond the Governor’s proposal.