LAO Analysis of the 1997-98 Budget Bill
Resources Overview



Major Issues

Resources



Governor's Resources Initiatives

Lack Defined Objectives

Expansion of NCCP Program Needs

Legislative Policy Review

River Parkway Program Lacks Goals and Criteria

To Prioritize Projects

Proposed Fire-Related Reductions

Are "Penny-Wise, Pound Foolish"

Waste Board Makes Late Decisions

Fee Changes Should Be Considered

For Hazardous Material Cleanup



Overview

Resources



The budget proposes a slightly higher level of state expenditure for resources and environmental protection programs in 1997-98 compared to the estimated current-year level. No one factor accounts for the increase which will come from various special funds. General Fund support of resources and environmental protection programs will drop slightly in 1997-98.

Expenditures for resources and environmental protection programs from the General Fund and various special funds are proposed to total $2.3 billion in 1997-98, which is 3.5 percent of all state-funded expenditures proposed for 1997-98. This level is an increase of $56.7 million, or 2.5 percent, above estimated expenditures for the current year. About 63 percent ($1.4 billion) of state support for these programs will come from special funds, including the Motor Vehicle Account, Environmental License Plate Fund, bond funds, funds generated by beverage container recycling fees, and an "insurance fund" for the cleanup of leaking underground storage tanks. The General Fund supports the remaining 37 percent of these expenditures.

Figure 1 (see next page) shows that state expenditures for resources and environmental protection programs increased by approximately $618.5 million since 1990-91, representing an average annual increase of approximately 4.6 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 2.2 percent. General Fund expenditures increased at an average annual rate of about 0.9 percent over this period. When adjusted for inflation, these expenditures decreased at an average rate of 1.4 percent per year.

Spending by Major Program

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

Figure 3 (see page 8) shows similar information for major environmental protection programs--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 for 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 1997-98, the budget proposes $298.8 million (65 percent) of CDFFP's support and capital outlay expenditures from the General Fund. For DPR, the General Fund will constitute about 30 percent of the department's expenditures in 1997-98.

Figure 2 also shows that the budget proposes a significant reduction in the 1997-98 expenditures for CDFFP in 1997-98. The reduction reflects primarily a base level of funding for emergency firefighting of $20 million
Figure 2
Resources Budget Summary

Selected Funding Sources

1995-96 Through 1997-98

(Dollars in Millions)
Department Actual

1995-96

Estimated

1996-97

Proposed

1997-98

Change From

1996-97

Amount Percent
Conservation
General Fund $14.5 $15.1 $16.3 $1.2 7.9%
Recycling funds 343.2 379.3 381.0 1.7 0.4
Other funds 14.2 16.2 19.6 3.4 30.0
Totals $371.9 $410.6 $416.9 $6.3 1.5%
Forestry and Fire Protection
General Fund $321.8 $387.4 $298.8 -$88.6 -22.9%
Forest Resources

Improvement Fund

14.9 14.7 14.5 -0.2 -1.4
Environmental License Plate Fund 4.0 4.0 0.8 -3.2 -80.0
Other funds 102.5 139.0 142.9 3.9 2.8
Totals $443.2 $545.1 $457.0 -$88.1 -16.2%
Fish and Game
General Fund $3.1 $3.1 $5.1 $2.0 64.5%
Fish and Game Preservation Fund 83.4 77.0 85.4 8.4 10.9
Environmental License Plate Fund 9.9 11.3 10.7 -0.6 -5.3
Other funds 70.1 77.1 92.2 15.1 19.6
Totals $166.5 $168.5 $193.4 $24.9 14.8%
Parks and Recreation
General Fund $49.8 $73.0 $72.0 -$1.0 -1.4%
State Parks and Recreation Fund 90.8 81.7 81.4 -0.3 -0.4
Park bond funds 21.6 25.7 7.1 -18.6 -72.4
Other funds 57.6 86.5 81.6 -4.9 -5.7
Totals $219.8 $266.9 $242.1 -$24.8 -9.3%
Water Resources
General Fund $19.8 $29.1 $27.2 -$1.9 -6.5%
State Water Project funds 798.2 699.5 633.1 -66.4 -9.5
Delta Flood Protection 5.7 9.1 15.4 6.3 69.2
Other funds 34.8 172.8 184.3 11.5 6.6
Totals $858.5 $910.5 $860.0 -$50.5 -5.5%


Figure 3
Environmental Protection Budget Summary

Selected Funding Sources

1995-96 Through 1997-98

(Dollars in Millions)
Department/Board Actual

1995-96

Estimated

1996-97

Proposed

1997-98

Change From

1996-97

Amount Percent
Air Resources
Motor Vehicle Account $74.5 $74.4 $74.3 -$0.1 -0.1%
Other funds 35.1 35.9 35.2 -0.7 -1.9
Totals $109.6 $110.3 $109.5 -$0.8 -0.7%
Waste Management
Integrated Waste

Management Account

$33.6 $33.4 $31.4 -$2.0 -6.0%
Used Oil Recycling Fund 24.8 24.1 23.9 -0.2 -0.8
Tire Recycling Management

Fund

3.7 5.5 8.8 3.3 60.0
Other funds 6.9 18.1 12.9 -5.2 -28.7
Totals $69.0 $81.1 $77.0 -$4.1 -5.1%
Pesticide Regulation
General Fund $10.6 $10.9 $10.9

--


--
Pesticide Regulation Fund 30.8 33.6 30.6 -$3.0 -8.9%
Other funds 5.0 6.5 5.6 -0.9 -13.8
Totals $46.4 $51.0 $47.1 -$3.9 -7.6%
Water Resources Control
General Fund $28.2 $28.6 $36.7 $8.1 28.3%
Underground Storage Tank

Cleanup Fund

140.8 154.1 244.0 89.9 58.3
Waste Discharge Permit Fund 16.7 14.1 12.1 -2.0 -14.2
Bond funds 32.0 57.5 90.3 32.8 57.0
Other funds 183.4 58.8 51.4 -7.4 -12.6
Totals $401.4 $313.1 $434.5 $121.4 38.8%
Toxic Substances Control
General Fund $2.6 $15.7 $41.6 $25.9 165.0%
Hazardous Waste Control

Account

57.7 54.4 51.1 -3.3 -6.1
Other funds 58.0 66.5 50.1 -16.4 -24.7
Totals $118.3 $136.6 $142.8 $6.2 4.5%


in the budget year rather than anticipated expenditures. As actual emergency firefighting expenditures exceed that base amount, additional funds will be provided through subsequent deficiency appropriations. The budget also proposes reductions in DPR's 1997-98 expenditures by 9.3 percent and reductions of 5.5 percent in the Department of Water Resources (DWR) expenditures. For DPR, the reductions are mainly in park development due to the depletion of park bond funds. In the case of DWR, reductions are due to an anticipated decline in expenditures for construction and operation of the State Water Project.

For the Department of Fish and Game (DFG), the budget proposes higher expenditures in 1997-98. The increased expenditures will be primarily from the Fish and Game Preservation Fund and bond funds authorized by Proposition 204, passed by voters in November 1996.

In addition to the major programs shown in Figure 2, the budget proposes expenditures by other resources programs totaling $269.7 million, an increase of $50.2 million (23 percent) over current-year estimated expenditures. These programs include various land conservancies, commissions, the Department of Boating and Waterways, and the California Conservation Corps. Specifically, the budget proposes significant increases in the State Coastal Conservancy ($12.8 million, or 61 percent over current-year estimated expenditures); the Department of Boating and Waterways ($19.6 million, or 41 percent); and the California Conservation Corps ($11.4 million, or 18 percent).

Spending for Environmental Protection Programs. As Figure 3 shows, the budget proposes significant increases in the State Water Resources Control Board (SWRCB) expenditures in 1997-98. Specifically, the budget proposes increases in payments to tank owners for underground storage tank cleanup and in local loans and grants for water quality and treatment projects funded from Proposition 204 bonds. The budget also proposes to increase the SWRCB's General Fund support by $8.1 million.

Similarly, the budget proposes General Fund support for the Department of Toxic Substances Control (DTSC) to increase significantly (by $41.6 million), to 29 percent of the department's total 1997-98 expenditures. The increase is due to costs to clean up two hazardous disposal sites (Stringfellow and Casmalia) where the state has been found responsible for the contamination.

For the Department of Pesticide Regulation, the budget proposes to keep General Fund support for the department at $10.9 million, the same level as in the current year. This is about 23 percent of total support of the department.

Major Budget Changes

Figures 4 and 5 (see page 12) present the major budget changes in resources and environmental protection programs, respectively.

As Figure 4 shows, the budget proposes various increases in land stewardship programs, including habitat conservation planning and the Natural Community Conservation Planning program under DFG. The budget also proposes significant increases in funding for fish and wildlife habitat preservation and restoration. Specifically, the budget proposes $13.4 million for salmon restoration by DFG. In addition, $24 million in Proposition 204 bond funds is proposed for fish and wildlife habitat restoration by DWR.

For DWR, the budget also proposes to increase expenditures for various water conservation and development projects as well as local flood control and levee rehabilitation in 1997-98. Funding for these increases will mainly come from Proposition 204 bond funds. At the same time, due to the completion of construction of portions of the State Water Project, the budget proposes to reduce departmental engineering and design accordingly.

Figure 5 shows that the budget proposes reductions in the Air Resources Board (ARB) and the California Integrated Waste Management Board (CIWMB) as a result of fee expiration or a decline in revenues. In the case of ARB, the budget proposes a reduction of $3 million in stationary source pollution control to reflect the expiration of fees on nonvehicular sources imposed by the California Clean Air Act. For CIWMB, the budget proposes various support and local assistance reductions of $2.2 million due to the continued decline in revenues to the Integrated Waste Management Account. The budget, however, proposes to increase waste tire cleanup by CIWMB by $5.4 million in 1997-98.

Figure 5 also shows that the budget proposes significant increases in the expenditures of the SWRCB. In particular, the budget proposes an increase of $90 million to reimburse tank owners for the costs of cleaning up underground storage tanks. The budget also proposes $7.4 million from the General Fund to restore funding for water quality planning, permitting, and enforcement. Additionally, the budget proposes expenditures of $54 million from Proposition 204 bond funds for local water quality projects.

For the DTSC, the budget proposes General Fund expenditures of $6 million for direct site cleanup at hazardous waste sites.
Figure 4
Resources Programs

Proposed Major Changes for 1997-98

Forestry and Fire Protection Requested: $457 Million
Decrease: $88.1 Million (-16.2%)
+$15.2 million for locally reimbursed fire protection services
+$4.4 million to refurbish airtankers

-$2.5 million in fire protection activities including support of conservation camp crews
Fish and Game Requested: $193.4 Million
Increase: $24.9 Million (+14.8%)
+$13.4 million for salmon restoration
+$3.1 million for support and local assistance of the Natural Community Conservation Planning program
+$3 million to develop the California oiled wildlife care network
+$2.6 million for habitat conservation planning, land stewardship, and riparian programs
Parks and Recreation Requested: $242.1 Million
Decrease: $24.8 Million (-9.3%)
-$19.2 million in state park capital outlay
Water Resources Requested: $860 Million
Decrease: $50.5 Million (-5.5%)
+$39.9 million for water development, ground water recharge and conservation, and Bay-Delta water quality control projects
+$24 million for fish and wildlife habitat
+$24 million for local flood control and levee subventions

-$54.9 million in State Water Project design, construction, operations, and maintenance
Figure 5
Environmental Protection Programs

Proposed Major Changes for 1997-98

Air Resources Board Requested: $109.5 Million
Decrease: $0.8 Million (-0.7%)
+$1.2 million to retire high polluting light-duty vehicles

-$3 million to reflect sunset of California Clean Air Act nonvehicular fees
Integrated Waste Management Board Requested: $77.0 Million
Decrease: $4.1 Million (-5.1%)
+$5.4 million for tire recycling and waste tire site remediation

-$2.2 million in various programs due to declining solid waste disposal fee revenues
State Water Resources Control Board Requested: $434.5 Million
Increase: $121.4 Million (+38.8%)
+$90 million to pay tank owners for underground tank cleanup
+$54 million for local wastewater treatment, recycling, drainage, and other water projects
+$7.4 million for water quality planning, permitting, and enforcement

-$5 million to reflect a drop in federal funds and reimbursements
Toxic Substances Control Requested: $142.8 Million
Increase: $6.2 Million (+4.5%)
+$6 million for state costs of hazardous waste site remediation

-$4.2 million in federal grants for military base cleanup


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