Major Issues

Resources



Beverage Container Recycling Funds Rise While Recycling Rates Fall

The Beverage Container Recycling Program is amassing large fund reserves while recycling rates for all types of beverage containers are declining. We make recommendations for reversing both trends (see page B-45).

Regulation of Petroleum Pipelines Needs Improvement

We find that jurisdictional boundaries between regulatory agencies are vague, permitting requirements are costly and time-consuming, and past pipeline leaks are going undetected. We recommend the enactment of legislation to designate a lead agency to address these concerns (see page B-27).

Significant Deferred Maintenance in State Parks Negatively Impacts Service

The Department of Parks and Recreation estimates its deferred maintenance to total $180 million. This large backlog negatively impacts the level and type of service the department can provide, as well as reduces the useful life of facilities and devalues the state's assets. We recommend the department prepare a deferred maintenance reduction plan to set priorities for eliminating the backlog (see page B-74).

We also recommend that the Legislature, in determining the state's priorities in funding various programs, consider providing some funding for the department to continue to reduce the maintenance backlog (see page B-85).

State's Unpaid Bills for Local Flood Control Projects Continue to Mount

With no funding proposed to pay the state share of cost for local flood control projects, the unpaid amount owed to local agencies will increase to about $189 million by the end of 1999-00 (see page B-93).

We recommend the enactment of legislation to provide statutory criteria to establish clear statewide priorities for state funding of local flood control projects (see page B-93).

Clean Water Enforcement Can Be Made More Effective

The state's ability to meet water quality objectives is impaired because enforcement and compliance assurance activities are not being carried out, or not being carried out effectively. We recommend that the Legislature reexamine the funding and fee structure supporting these activities, based on an updated analysis of program needs (see page B-109).

The various regional water boards have implemented enforcement policies and procedures inconsistently, leading to increased compliance costs to the regulated community. We recommend that a statewide enforcement policy be codified in regulations, an enforcement action review panel be established, and reporting by regional boards be standardized (see page B-111).

Mandating minimum penalties for serious water quality violations has proven to be a cost-effective enforcement approach in other states (see page B-114).

State Agencies Impeding Efforts to Reduce Landfill Waste Disposal

State agencies are impeding local jurisdictions' ability to meet landfill diversion requirements by failing both to recycle and purchase recycled-content products in substantial amounts (see page B-98).



Overview

Resources





The budget proposes a significantly lower level of state expenditures for resources and environmental protection programs in 1999-00 compared to the estimated current-year level. The reduction primarily reflects the expiration of many one-time expenditures, and fewer General Fund dollars available for resources programs, particularly for local assistance purposes.

Expenditures for resources and environmental protection programs from the General Fund and various special funds are proposed to total $2.5 billion in 1999-00, which is 3.3 percent of all state-funded expenditures proposed for 1999-00. This level is a decrease of about $360 million, or 13 percent, below estimated expenditures for the current year.

The budget proposes a greater reliance on special funds for the support of resources and environmental protection programs in 1999-00 than in the current year. Specifically, the budget proposes that 56 percent ($1.4 billion) of state funding for these programs come from special funds, including the Environmental License Plate Fund, Fish and Game Preservation Fund, funds generated by beverage container recycling fees, and an "insurance fund" for the cleanup of leaking underground storage tanks. The General Fund will support the remaining 44 percent of the these expenditures, a drop from about 49 percent in the current year.

Figure 1 (see next page) shows that state expenditures for resources and environmental protection programs increased by about $750 million since 1992-93, representing an average annual increase of 5.3 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 3 percent. General Fund expenditures increased at an average annual rate of about 5.9 percent over this period. When adjusted for inflation, General Fund expenditures increased at an average annual rate of 3.5 percent.

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 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 (Cal-EPA).

Spending for Resources Programs. Figure 2 shows that the General Fund provides a relatively small proportion of total expenditures 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 1999-00, the budget proposes that 71 percent ($378.9 million) of CDFFP's expenditures come from the General Fund. For DPR, the General Fund will constitute about 31 percent ($75.2 million) of the department's expenditures in 1999-00.

Figure 2
Resources Budget Summary

Selected Funding Sources

1997-98 Through 1999-00

(Dollars in Millions)

Department Actual 1997-98 Estimated 1998-99 Proposed 1999-00 Change From 1998-99
Amount Percent
Conservation
General Fund $13.2 $24.1 $18.5 -$5.6 -23.2%
Recycling funds 354.7 343.0 329.4 -13.6 -4.0
Other funds 16.9 28.2 19.5 -8.7 -30.8
Totals $384.8 $395.3 $367.4 -$27.9 -7.1%
Forestry and Fire Protection
General Fund $318.1 $345.4 $378.9 $33.5 9.7%
Forest Resources Fund 14.5 6.5 12.9 6.4 98.4
Other funds 127.8 135.7 143.1 7.4 5.4
Totals $460.4 $487.6 $534.9 $47.3 9.7%
Fish and Game
General Fund $4.4 $29.9 $18.5 -$11.4 -38.1%
Fish and Game Fund 87.3 72.6 79.6 7.0 9.6
Oil Spill Prevention Fund 16.3 20.0 16.0 -4.0 -20.0
Environmental License Plate Fund 11.1 12.1 15.2 3.5 29.9
Other funds 78.7 79.1 77.2 -2.3 -2.9
Totals $197.8 $213.7 $206.5 -$7.2 -3.4%
Parks and Recreation
General Fund $75.3 $150.1 $75.2 -$74.9 -49.9%
Parks and Recreation Fund 77.5 80.6 81.9 1.3 1.6
Off-Highway Vehicle Fund 31.8 45.8 41.3 -4.5 -9.8
Other funds 47.2 78.1 44.1 -34.0 -43.5
Totals $231.8 $354.6 $242.5 -$112.1 -31.6%
Water Resources
General Fund $41.8 $184.6 $62.7 -$121.9 -66.0%
State Water Project funds 677.7 692.1 725.6 33.5 4.8
Other funds 88.1 115.4 105.2 -10.2 -8.8
Totals $807.6 $992.1 $893.5 -$98.6 -9.9%



Figure 2 also shows that for 1999-00, the budget proposes a reduction in most resources departments, with the exception of CDFFP. Specifically, the budget proposes a significant reduction in DPR expenditures--about 32 percent below the current-year estimated level. The reduction would be mainly in General Fund-supported local assistance and capital outlay expenditures for park development, as well as expenditures on deferred maintenance of state parks. The budget also proposes reductions of about 10 percent in the expenditures of the Department of Water Resources, including mostly local assistance for flood control projects and for groundwater development.

For CDFFP, the budget proposes a 9.7 percent increase in departmental expenditures, mainly for fire protection, funded from the General Fund. As in the current year, the budget includes a base level of $20 million for emergency firefighting in 1999-00. This funding level is likely to be insufficient, as emergency firefighting expenditures have averaged around $40 million in past years. To the extent actual emergency firefighting expenditures exceed that base amount, additional funds will be provided through subsequent deficiency appropriations.

Spending for Environmental Protection Programs. As Figure 3 shows, the budget proposes reductions in all the major environmental protection programs. Specifically, the expenditure level for the Air Resources Board is proposed to decrease by about 20 percent, compared to current-year expenditure levels. The reduction mainly reflects the one-time expenditure in the current year of $25 million from the General Fund for grants to reduce emissions from high-polluting heavy diesel engines.

The budget also proposes to reduce expenditures of the Department of Pesticide Regulation by about 10 percent and the State Water Resources Control Board by about 7 percent in 1999-00. For the Department of Pesticide Regulation, the reduction is the result of projected lower claim payments to local governments for reporting pesticide use and the expiration of one-time expenditures for pesticide research and for office relocation. For the State Water Resources Control Board, much of the reduction reflects lower expenditures from the Underground Storage Tank Cleanup Fund due to lower resources projected to be available in 1999-00.

Figure 3
Environmental Protection Budget Summary

Selected Funding Sources

1997-98 Through 1999-00

(Dollars in Millions)

Department/Board Actual 1997-98 Estimated 1998-99 Proposed 1999-00 Change From 1998-99
Amount Percent
Air Resources
General Fund $2.5 $50.2 $22.6 -$27.6 -55.0%
Motor Vehicle Account 74.3 57.6 58.0 0.4 0.7
Other funds 36.8 38.3 36.9 -1.4 -3.6
Totals $113.6 $146.1 $117.5 -$28.6 -19.6%
Waste Management
Integrated Waste Account $30.0 $32.4 $37.2 $4.8 14.8%
Used Oil Recycling Fund 19.8 24.2 24.2 -- --
Other funds 12.0 27.5 21.6 -5.9 -21.4
Totals $61.8 $84.1 $83.0 -$1.1 -1.3%
Pesticide Regulation
General Fund $10.9 $17.2 $12.2 -$5.0 -29.1%
Pesticide Regulation Fund 31.3 31.2 31.3 0.1 0.3
Other funds 5.0 5.9 5.4 -0.5 -8.5
Totals $47.2 $54.3 $48.9 -$5.4 -9.9%
Water Resources Control
General Fund $34.9 $42.2 $40.6 -$1.6 -3.8%
Underground Storage Tank 244.1 210.6 186.4 -24.2 -11.5
Waste Discharge Fund 11.9 15.4 14.4 -1.0 -6.5
Other funds 155.9 222.8 215.1 -7.7 -3.4
Totals $446.8 $491.0 $456.5 -$34.5 -7.0%
Toxic Substances Control
General Fund $26.0 $32.7 $36.6 $3.9 11.9%
Hazardous Waste Control 51.0 25.8 31.4 5.6 21.7
Toxic Substances Control -- 27.8 35.7 7.9 28.4
Other funds 45.6 46.4 27.4 -19.0 -40.9
Totals $122.6 $132.7 $131.1 -$1.6 -1.2%

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 increases totaling $47.3 million for CDFFP in 1999-00. Of the increase, $30 million would be for ten additional airtankers and related parts and equipment and $13.8 million for a computer-aided dispatch system. The budget also proposes an increase of $6 million for a number of programs to improve forest resources. These programs include urban forestry, incentive grants and cost-sharing for reforestation on small privately-owned forests, forest pest-management--primarily pitch canker, forest research, and operation of state nurseries.

Figure 4
Resources Programs

Proposed Major Changes for 1999-00

Conservation Requested: $367.4 million (-7.1%)
Decrease: $27.9 million
- $14 million in open space/land conservation subventions
- $14 million in beverage container recycling expenditures
Forestry and Fire Protection Requested: $534.9 million (+9.7%)
Increase: $47.3 million
+ $30 million for additional airtankers and equipment
+ $13.8 million to acquire computer-aided dispatch system
+ $6 million for various forest improvement programs
Fish and Game Requested: $206.5 million (-3.4%)
Decrease: $7.2 million
+ $2.4 million for environmental review of streambed alteration projects
+ $4 million to expand fishing opportunities

- $4 million for oil spill prevention due to depletion of reserve
Parks and Recreation Requested: $242.5 million (-31.6%)
Decrease: $112.1 million
- $39.4 million in state park capital outlay
- $38 million in local assistance for park development
- $30 million for one-time deferred maintenance expenditures
Water Resources Requested: $893.5 million (-9.9%)
Decrease: $98.6 million
- $59 million for local assistance for flood control
- $35 million for one-time expenditures for groundwater development

For the Department of Conservation, the budget proposes $2 million for local assistance in open space/land conservation. This is a drop of $14 million compared to the estimated current-year expenditure level. The budget also projects $14 million less in expenditures in the Beverage Container Recycling Program due to the expiration of certain provisions of the law.

Similarly, the budget proposes reductions in the Departments of Parks and Recreation, Water Resources and Fish and Game. In particular, the budget proposes a total reduction of $112 million in the Department of Parks and Recreation's expenditures on deferred maintenance and state and local park development.

For the Department of Water Resources, the budget proposes a reduction of $59 million for local flood control subventions, including the reversion of $44 million in General Fund support appropriated by Chapter 326, Statutes of 1998 (AB 2784, Strom-Martin) for 1999-00 to pay the state's share of the nonfederal costs of flood control projects. The administration advises that it will seek legislation to revert these funds. Additionally, the budget includes a reduction of $35 million in one-time local assistance expenditures to develop groundwater.

For the Department of Fish and Game, the budget proposes an increase of $2.4 million to accommodate environmental review workload for streambed alteration projects, and $4 million to expand fishing opportunities. Due to the depletion of the reserve, the budget also proposes $4 million less in expenditures from the Oil Spill Prevention and Administration Fund for various oil spill prevention activities.

Figure 5 shows that for the Air Resources Board and the Department of Pesticide Regulation, the budget proposes reductions to reflect mainly the expiration of one-time expenditures. For the State Water Resources Control Board, proposed reductions in 1999-00 reflect mainly (1) lower expenditures to reimburse tank owners for the cleanup of underground storage tanks as a result of lower projected resources in the Underground Storage Tank Cleanup Fund, and (2) lower funding for grants and loans to local governments for water quality projects.

Figure 5
Environmental Protection Programs

Proposed Major Changes for 1999-00

Air Resources Board Requested: $117.5 million (-20%)
Decrease: $28.6 million
- $25 million in one-time expenditures for grants to reduce emission of high polluting heavy diesel engines
Pesticide Regulation Requested: $48.9 million (-9.9%)
Decrease: $5.4 million
- $3.5 million in one-time expenditures for pesticide research and for office relocation
- $1.7 million in state-mandated local claim payments for pesticide use reporting
Water Resources Control Board Requested: $456.5 million (-7%)
Decrease: $34.5 million
+ $1.4 million to regulate stormwater discharge
+ $1.3 million to address water rights and landfill permit backlog

- $20 million due to lower Underground Storage Tank Cleanup Fund resources
- $7.5 million in local assistance for water quality projects
Toxic Substances Control Requested: $131.1 million (-1.2%)
Decrease: $1.6 million
+ $7 million for cleanup of Stringfellow superfund site
+ $1.1 million to increase pollution prevention activities

- $2.6 million for military base cleanup
For the Department of Toxic Substances Control, the budget proposes a baseline increase of $7 million for cleanup operations at the Stringfellow superfund site. This increase would bring total budget-year funding for these purposes to about $13 million, a net increase of about $2 million over the current-year funding level. The department also anticipates decreases of $2.6 million in federal funds for military base cleanup.

 


Return to 1999-00 Budget Analysis Resources Table of Contents
Return to 1999-00 Budget Analysis Table of Contents
Return to LAO Home Page