LAO Analysis of the 1996-97 Budget Bill
Resources Overview

Major Issues

State Lacks Long-Term Plans to Protect Resources and Acquire Habitat. The state lacks long-term plans for the conservation and management of its land resources, as well as the acquisition and restoration of habitat and open space. The development of such plans would help identify the state's goals relative to land resources conservation, improve the coordination of the state's land resources programs, and enable the Legislature to assess the state's habitat and open space acquisition needs. (See pages B-13 through B-17.)
Land Acquisition for Natural Community Conservation Planning (NCCP) Needs Legislative Review. The budget requests $600,000 for local grants and $4.4 million for land acquisition for the NCCP pilot program. However, the proposed expenditures for land acquisition represent a significant change in the state's role in the pilot. The Legislature should reevaluate the state's role in this program. (See page B-60.)
Expansion of Pre-fire Management Initiative Is Premature. The Department of Forestry and Fire Protection's proposal to expand a pre-fire management initiative is premature because the department has not yet completed a pilot program to test the effectiveness of the initiative or evaluated its results. We offer some criteria for the Legislature to use when evaluating this initiative. (See page B-51.)
Pesticides Department Will Soon Face Major Funding Shortfall. The Department of Pesticide Regulation's support from a mill tax on pesticide sales will decrease by almost 80 percent with the scheduled reduction in the tax rate on July 1, 1997. At current expenditure levels, the department will face a major funding shortfall beginning in 1998-99. (See page B-83.)
Future Direction of Underground Tank Program Uncertain. The State Water Resources Control Board (SWRCB) is reviewing the standards for the cleanup of leaking underground petroleum storage tanks. In light of a recent study which found that the environmental impact from leaking tanks may not be as great as once thought, the board could make significant changes to this program which would impact costs incurred by both government and tank owners. (See page B-85.)
Water Board Seeking Stable, Flexible, Long-term Funding Solution. The SWRCB is funded currently by a complex mix of over 60 fund sources, most of which are special funds with variable revenues and strict limitations on their use. Bond funds that supported high-priority programs--such as the Water Quality Management Program--in the past are almost depleted. Additionally, permit fee revenues from waste dischargers cover only a small portion of the board's administrative costs in its core regulatory program. To address these issues, the board is developing a proposal for a more stable and flexible long-term funding mechanism to support its various programs. (See page B-88.)

State Liable for Major Cleanup Costs. The state is liable as a responsible party contributing to contamination at two hazardous waste sites, the Casmalia Resources Hazardous Management Facility and the Stringfellow Federal Superfund Site. The budget proposes over $30 million from the General Fund to settle the state's liability at Casmalia and as partial payment for cleanup costs at Stringfellow. The ultimate cost to the state of the Stringfellow cleanup could reach hundreds of millions of dollars over many years. (See page B-90.)

Overview

The budget proposes a slightly lower level of expenditure for resources and environmental protection programs in 1996-97 compared to the estimated current-year level.

Expenditures for resources and environmental protection programs are proposed to total $2.1 billion in 1996-97, which is 3.5 percent of all state-funded expenditures proposed for 1996-97. This level is a decrease of approximately $109.3 million, or 5 percent, below estimated expenditures for the current year. About 61 percent ($1.3 billion) of state support for these programs will come from special funds, including the Motor Vehicle Account, Environmental License Plate Fund, funds generated by beverage container recycling fees, and an "insurance fund" for the cleanup of leaking underground tanks. The General Fund supports the remaining 39 percent of these expenditures.

Figure 1 (see next page) shows that resources and environmental protection expenditures from all state funds increased by approximately $586.6 million since 1989-90, representing an average annual increase of approximately 4.9 percent. This increase primarily reflects the establishment of various programs to address environmental problems such as leaking underground tanks, hazardous waste sites, and solid waste generation. When adjusted for inflation, these expenditures increased at an average annual rate of 1.9 percent. General Fund expenditures increased at an average annual rate of about 0.8 percent over this period. When adjusted for inflation, these expenditures decreased at an average rate of 2.1 percent per year.

Spending by Major Programs

Figure 2 shows spending for major resourcesprograms--that is, those programs within the jurisdiction of the Secretary for Resources.

Figure 3 (see page 8) shows similar information for major environmental protectionprograms--those programs within the jurisdiction of the Secretary for Environmental Protection and the California Environmental Protection Agency.

Spending for Resources Programs.Figure 2 shows that the General Fund provides a relatively small proportion of total support of resources programs except in the case of the California Department of Forestry and Fire Protection (CDFFP) and the Department of Parks and Recreation (DPR). For 1996-97, the budget proposes $297.2 million (70 percent) of the CDFFP's support and capital outlay expenditures from the General Fund. For the DPR, the General Fund will constitute about 32 percent of the department's expenditures in 1996-97. This is a higher percentage than in recent years due to a proposed budget increase discussed in more detail below.

Figure 2
Resources Budget Summary
Selected Funding Sources
1994-95 Through 1996-97
(Dollars in Millions)

Department Actual
1994-95 Estimated 1995-96 Proposed
1996-97 Change From
1995-96

Amount Percent

Conservation

General Fund $14.5 $14.8 $14.9 $0.1 0.7%

Recycling funds 333.4 366.7 385.4 18.7 5.1

Other funds 12.7 15.6 14.1 -1.5 -9.6

Totals $360.6 $397.1 $414.4 $17.3 4.4%

Forestry and Fire Protection

General Fund $310.1 $289.6 $297.2 $7.6 2.6%

Forest Resources Improvement Fund 15.7 14.9 14.6 -0.3 -2.0

Environmental License Plate Fund 4.2 4.0 4.0 -- --

Other funds 106.5 112.2 111.1 -1.1 -1.0

Totals $436.5 $420.7 $426.9 $6.2 1.5%

Fish and Game

General Fund $3.1 $3.1 $3.2 $0.1 3.2%

Fish and Game Preservation Fund 71.4 78.4 75.3 -3.1 -4.0

Environmental License Plate Fund 10.6 9.9 10.8 0.9 9.1

Other funds 70.5 76.6 76.7 0.1 0.1

Totals $155.6 $168.0 $166.0 -$2.0 -1.2%

Parks and Recreation

General Fund $51.2 $51.8 $71.2 $19.4 37.5%

State Parks and Recreation Fund 80.5 97.1 81.0 -16.1 -16.6

Park bond funds 15.6 46.0 2.9 -43.1 -93.7

Other funds 75.7 77.4 64.6 -12.8 -16.5

Totals $223.0 $272.3 $219.7 -$52.6 -19.3%

Water Resources

General Fund $17.7 $25.4 $22.6 -$2.8 -11.0%

State Water Project Funds 743.3 865.1 696.5 -168.6 -19.5

Delta Flood Protection 12.3 9.2 9.1 -0.1 -1.1

Other funds 97.2 76.5 96.9 20.4 26.7

Totals $870.5 $976.2 $825.1 -$151.1 -15.5%

Figure 2 Resources Budget Summary Selected Funding Sources 1994-95 Through 1996-97 (Dollars in Millions)
Department	Actual 1994-95	Estimated 1995-96	Proposed 1996-97	Change From 1995-96
				Amount	Percent
Conservation
General Fund	$14.5	$14.8	$14.9	$0.1	0.7%
Recycling funds	333.4	366.7	385.4	18.7	5.1
Other funds	12.7	15.6	14.1	-1.5	-9.6
Totals	$360.6	$397.1	$414.4	$17.3	4.4%
Forestry and Fire Protection
General Fund	$310.1	$289.6	$297.2	$7.6	2.6%
Forest Resources Improvement Fund	15.7	14.9	14.6	-0.3	-2.0
Environmental License Plate Fund	4.2	4.0	4.0	--	--
Other funds	106.5	112.2	111.1	-1.1	-1.0
Totals	$436.5	$420.7	$426.9	$6.2	1.5%
Fish and Game
General Fund	$3.1	$3.1	$3.2	$0.1	3.2%
Fish and Game Preservation Fund	71.4	78.4	75.3	-3.1	-4.0
Environmental License Plate Fund	10.6	9.9	10.8	0.9	9.1
Other funds	70.5	76.6	76.7	0.1	0.1
Totals	$155.6	$168.0	$166.0	-$2.0	-1.2%
Parks and Recreation
General Fund	$51.2	$51.8	$71.2	$19.4	37.5%
State Parks and Recreation Fund	80.5	97.1	81.0	-16.1	-16.6
Park bond funds	15.6	46.0	2.9	-43.1	-93.7
Other funds	75.7	77.4	64.6	-12.8	-16.5
Totals	$223.0	$272.3	$219.7	-$52.6	-19.3%
Water Resources
General Fund	$17.7	$25.4	$22.6	-$2.8	-11.0%
State Water Project Funds	743.3	865.1	696.5	-168.6	-19.5
Delta Flood Protection	12.3	9.2	9.1	-0.1	-1.1
Other funds	97.2	76.5	96.9	20.4	26.7
Totals	$870.5	$976.2	$825.1	-$151.1	-15.5%

Figure 3
Environmental Protection Budget Summary
Selected Funding Sources
1994-95 Through 1996-97
(Dollars in Millions)

Department/Board

Change From
1995-96

Actual 1994-95 Estimated 1995-96 Proposed 1996-97 Amount Percent

Air Resources

Motor Vehicle Account $74.0 $74.5 $74.1 -$0.4 -0.5%

Other funds 33.4 41.0 33.9 -7.1 -17.3

Totals $107.4 $115.5 $108.0 -$7.5 -6.5%

Integrated Waste Management

Integrated Waste Management $33.1 $34.3 $33.6 -$0.7 -2.0%

California Used Oil Recycling Fund 16.3 25.4 23.8 -1.6 -6.3

Solid Waste Disposal Site Cleanup 5.0 5.0 5.0 -- --

Other funds 9.9 11.3 12.1 0.8 7.1

Totals $64.3 $76.0 $74.5 -$1.5 -2.0%

Pesticide Regulation

General Fund $11.2 $10.8 $10.8 -- --

Pesticide Regulation Fund 30.8 31.8 31.0 -$0.8 -2.5%

Others 4.1 5.6 5.4 -0.2 -3.6

Totals $46.1 $48.2 $47.2 -$1.0 -2.1%

Water Resources Control

General Fund $28.9 $28.4 $28.4 -- --

Underground Storage Tank
Cleanup Fund 128.1 143.8 154.0 $10.2 7.1%

Waste Discharge Permit 10.6 16.9 13.2 -3.7 -21.9

Bond funds 55.4 39.9 37.6 -2.3 -5.8

Other funds 145.5 60.6 57.4 -3.2 -5.3

Totals $368.5 $289.6 $290.6 $1.0 0.3%

Toxic Substances Control

General Fund $1.6 $0.8 $32.2 $31.4 3,925.0%

Hazardous Waste Control Account 67.3 62.2 54.4 -7.8 -12.5

Other funds 45.9 56.0 64.7 8.8 15.7

Totals $114.8 $119.0 $151.3 $32.3 27.1%

Figure 3 Environmental Protection Budget Summary Selected Funding Sources 1994-95 Through 1996-97 (Dollars in Millions)
Department/Board				Change From 1995-96
	Actual 1994-95	Estimated 1995-96	Proposed 1996-97	Amount	Percent
Air Resources
Motor Vehicle Account	$74.0	$74.5	$74.1	-$0.4	-0.5%
Other funds	33.4	41.0	33.9	-7.1	-17.3
Totals	$107.4	$115.5	$108.0	-$7.5	-6.5%
Integrated Waste Management
Integrated Waste Management	$33.1	$34.3	$33.6	-$0.7	-2.0%
California Used Oil Recycling Fund	16.3	25.4	23.8	-1.6	-6.3
Solid Waste Disposal Site Cleanup	5.0	5.0	5.0	--	--
Other funds	9.9	11.3	12.1	0.8	7.1
Totals	$64.3	$76.0	$74.5	-$1.5	-2.0%
Pesticide Regulation
General Fund	$11.2	$10.8	$10.8	--	--
Pesticide Regulation Fund	30.8	31.8	31.0	-$0.8	-2.5%
Others	4.1	5.6	5.4	-0.2	-3.6
Totals	$46.1	$48.2	$47.2	-$1.0	-2.1%
Water Resources Control
General Fund	$28.9	$28.4	$28.4	--	--
Underground Storage Tank Cleanup Fund	128.1	143.8	154.0	$10.2	7.1%
Waste Discharge Permit	10.6	16.9	13.2	-3.7	-21.9
Bond funds	55.4	39.9	37.6	-2.3	-5.8
Other funds	145.5	60.6	57.4	-3.2	-5.3
Totals	$368.5	$289.6	$290.6	$1.0	0.3%
Toxic Substances Control
General Fund	$1.6	$0.8	$32.2	$31.4	3,925.0%
Hazardous Waste Control Account	67.3	62.2	54.4	-7.8	-12.5
Other funds	45.9	56.0	64.7	8.8	15.7
Totals	$114.8	$119.0	$151.3	$32.3	27.1%

Figure 2 also shows significant decreases in the 1996-97 expenditures of the DPR mainly reflecting a continued depletion of bond funds for local assistance and capital improvement purposes. Similarly, Figure 2 shows a significant reduction in the Department of Water Resources' (DWR) 1996-97 expenditures. The reduction will be concentrated in capital improvements on the State Water Project.

For the Department of Conservation, the budget proposes to increase expenditures by $17.3 million over the current-year level. This increase reflects the department's implementation of Ch 624/95 (SB 1178, O'Connell) which modifies the Beverage Container Recycling Program effective January 1, 1996.

Spending for Environmental Protection Programs.As Figure 3 shows, the budget proposes slight funding reductions in both the Department of Pesticide Regulation and the California Integrated Waste Management Board (CIWMB)--each by about 2 percent below the current-year level. Funding for the Air Resources Board (ARB) is proposed to decrease by $7.5 million, primarily due to expiration of a program to pay claims for damages related to the use of board mandated diesel fuel. For the State Water Resources Control Board (SWRCB)--the largest environmental protection program--the budget proposes expenditures of $290.6 million in 1996-97, essentially the same as the current-year level.

In contrast, expenditures for the Department of Toxic Substances Control (DTSC) are proposed to increase significantly, by $32.3 million, or 27 percent, mostly from the General Fund. The increase is requested primarily to allow the department to pay for clean up of two hazardous waste disposal sites.

Major Budget Changes

Figures 4 and 5 (see pages 10, 11) present the major budget changes in resources and environmental protection programs, respectively.

As Figure 4 shows, the budget proposes $16.4 million from the General Fund to maintain the current level of operational support of the DPR. In the current year, reserves from the Beverage Container Recycling Fund were used instead. Local assistance, as well as capital improvement of parks, however, are proposed to decline significantly in 1996-97 mainly due to the depletion of bond funds.

For the DWR, the budget proposes to increase local assistance, mainly from bond funds, for safe drinking water projects. The budget also reflects a projected reduction of $163.5 million in capital improvements on the State Water Project as construction on portions of the project is completed.

Figure 4
Resources Program
Proposed Major Changes for 1996-97

Conservation

Requested: $414.4 million

Increase: $17.3 million (+4.4%)

$18.7 million in refund and processing fee payments for the Beverage Container Recycling Program

$1.7 million in administrative support of Beverage Container Recycling Program

Forestry and Fire Protection

Requested: $426.9 million

Increase: $6.2 million (+1.5%)

$2.7 million in reimbursed staff costs to reflect cooperative fire protection agreement with local governments

$2.0 million for increased costs due to Fair Labor Standards Act lawsuit settlement

Parks and Recreation

Requested: $219.7 million

Decrease: $52.6 million (-19.3%)

$16.4 million from the General Fund to maintain current support

$30.4 million in bond-funded park capital improvement

$18.4 million for local park development and operations

Water Resources

Requested: $825.1 million

Decrease: $151.1 million (-15.5%)

$18.6 million in local safe drinking water projects

$163.5 million in State Water Project capital improvements

Figure 5
Environmental Protection Program
Proposed Major Changes for 1996-97

Air Resources Board

Requested: $108 million

Decrease: $7.5 million (-6.5%)

$6 million due to completion of program to reimburse owners of diesel-powered engines for repair costs

$2.6 million to reflect program efficiencies and reduction of workload and low priority activities

Integrated Waste Management Board

Requested: $74.5 million

Decrease: $1.5 million (-2%)

$2.6 million for loans for recycling market development

$1.4 million for grants in the waste tire recycling program

$1 million to reflect primarily program efficiencies

State Water Resources Control Board

Requested: $290.6 million

Increase: $1 million (+0.3%)

$10 million for increased claims in the Underground Storage Tank Cleanup Fund Program

$2 million to oversee cleanup at leaking underground tank sites

$3.8 million in Water Quality Management Program

Toxic Substances Control

Requested: $151.3 million

Increase: $32.3 million (+27.1%)

$30.3 million to clean up Casmalia Resources Hazardous Waste Management Facility and Stringfellow Federal Superfund Site

$3.2 million in support for various programs as well as the Department of Health Services due to revenue declines

$2.2 million for the Railroad Accident Prevention and Immediate Deployment Program

Figure 5 shows that the budget proposes reductions in both the ARB and the CIWMB to reflect program efficiencies and reduction of workload and other low priority activities. For the SWRCB, the budget requests an additional $10 million to process and pay claims in the Underground Storage Tank Cleanup Fund Program and an additional $2 million to oversee cleanup at leaking underground tank sites. At the same time, funding for the Water Quality Management Program is proposed to be reduced due to a lack of funds.

Figure 5 also shows that for the DTSC, the budget requests increases of $30.3 million from the General Fund to clean up the Casmalia Resources Hazardous Waste Management Facility and the Stringfellow Federal Superfund site. However, various other activities that are supported from the Hazardous Waste Control Account, including the support of the Department of Health Services, are proposed to be reduced due to a decline in account revenues.

Return to LAO Budget Analysis Table of Contents

Return to LAO Home Page

Figure 4 Resources Program Proposed Major Changes for 1996-97
Conservation		Requested:	$414.4 million
		Increase:	$17.3 million	(+4.4%)
	$18.7 million in refund and processing fee payments for the Beverage Container Recycling Program

	$1.7 million in administrative support of Beverage Container Recycling Program
Forestry and Fire Protection		Requested:	$426.9 million
		Increase:	$6.2 million	(+1.5%)
	$2.7 million in reimbursed staff costs to reflect cooperative fire protection agreement with local governments
	$2.0 million for increased costs due to Fair Labor Standards Act lawsuit settlement
Parks and Recreation		Requested:	$219.7 million
		Decrease:	$52.6 million	(-19.3%)
	$16.4 million from the General Fund to maintain current support

	$30.4 million in bond-funded park capital improvement
	$18.4 million for local park development and operations
Water Resources		Requested:	$825.1 million
		Decrease:	$151.1 million	(-15.5%)
	$18.6 million in local safe drinking water projects

	$163.5 million in State Water Project capital improvements

Figure 5 Environmental Protection Program Proposed Major Changes for 1996-97
Air Resources Board		Requested:	$108 million
		Decrease:	$7.5 million	(-6.5%)
	$6 million due to completion of program to reimburse owners of diesel-powered engines for repair costs
	$2.6 million to reflect program efficiencies and reduction of workload and low priority activities
Integrated Waste Management Board		Requested:	$74.5 million
		Decrease:	$1.5 million	(-2%)
	$2.6 million for loans for recycling market development
	$1.4 million for grants in the waste tire recycling program

	$1 million to reflect primarily program efficiencies
State Water Resources Control Board		Requested:	$290.6 million
		Increase:	$1 million	(+0.3%)
	$10 million for increased claims in the Underground Storage Tank Cleanup Fund Program
	$2 million to oversee cleanup at leaking underground tank sites

	$3.8 million in Water Quality Management Program
Toxic Substances Control		Requested:	$151.3 million
		Increase:	$32.3 million	(+27.1%)
	$30.3 million to clean up Casmalia Resources Hazardous Waste Management Facility and Stringfellow Federal Superfund Site

	$3.2 million in support for various programs as well as the Department of Health Services due to revenue declines
	$2.2 million for the Railroad Accident Prevention and Immediate Deployment Program

LAO Analysis of the 1996-97 Budget BillResources Overview

Major Issues

Overview

Spending by Major Programs

Major Budget Changes

LAO Analysis of the 1996-97 Budget Bill
Resources Overview