Legislative Analyst's Office Analysis of the 2002-03 Budget Bill

Secretary for Resources (0540)

The Secretary for Resources oversees the Resources Agency. The Resources Agency through its various departments, boards, commissions, and conservancies is responsible for conservation, restoration, and management of California's natural and cultural resources. The following departments and organizations are under the Resources Agency:

The budget requests $168.6 million for the Secretary in 2002-03, a decrease of about $58.6 million (or 25 percent) below estimated current-year expenditures. The decrease reflects primarily a decrease of $56.6 million for projects funded from Propositions 12, 13, and 204 bond funds, and the elimination of one-time General Fund expenditures of $8.4 million that occur in the current year for local assistance. The budget also proposes $10 million from Proposition 40 (the resources bond on the March 2002 ballot) for river parkway projects under the CALFED Bay-Delta program.

Recommend Federal Funding for California Legacy Project

The budget requests $1,945,000 from the General Fund to continue the California Legacy Project. We recommend the Secretary seek available federal funds to partially cover the program's costs. Therefore, we recommend reducing the General Fund appropriation for the California Legacy Project by $1,459,000. (Reduce Item 0540-001-0001 by $1,459,000, increase reimbursements for that item by a like amount, and increase Item 3600-001-0890 by $1,459,000.)

Legislature Recognized Need for Statewide Habitat Plan. Recognizing the need for an assessment of the state's natural resources and a plan to guide acquisition and habitat restoration efforts, the Legislature in the 1999-00 Budget Act provided $250,000 for the Secretary to develop a habitat blueprint. The Legislature specified two goals for the habitat blueprint:

• To assess the current condition of the state's natural resources and habitat.
• To establish a long-term set of funding and policy priorities for future investment in resources protection and habitat acquisition and preservation.

The Secretary named the project the California Continuing Resources Investment Strategy Project. In both 2000-01 and 2001-02, $2 million from the General Fund was appropriated for the project. In 2001, the Secretary renamed the project the California Legacy Project.

The budget requests $1.9 million (General Fund) for the California Legacy Project in 2002-03. The majority of the funding ($1.8 million) is for contracts and operating expenses. There are two positions authorized for the project.

Federal Funding Available for Habitat Planning. Our review finds that a recent federal appropriation provides $80 million nationwide for state wildlife grants to be administered by the United States Fish and Wildlife Service (USFWS). States may use funding for planning or restoration activities. Each state will be apportioned funding based on population and land area. Although the specific formula has not been developed, our discussions with USFWS indicate that California is expected to receive approximately $4 million. The state can use these funds for habitat restoration planning (such as the Legacy Project) as well as restorations activities. The state would be required to provide a 25 percent match for any federal funding received.

The federal appropriation requires that a state's fish and wildlife agency (the Department of Fish and Game [DFG] in California's case) must first apply for the funding. At the time this Analysis was prepared, the department indicates that it had not yet applied for the funding.

Recommend California Legacy Project Access Available Federal Funding. Our review finds that the California Legacy Project appears to be an eligible use of the state wildlife grant funding administered by USFWS. We therefore recommend that the California Legacy Project access this federal funding by way of an application from DFG. In anticipation of federal funding being available for the California Legacy Project, we recommend the General Fund appropriation for the California Legacy Project be reduced by $1,459,000, leaving a balance of $486,000. The balance is sufficient for the state to meet the required match. Because funding from the USFWS must be awarded to the state's wildlife agency (DFG), we recommend increasing federal trust fund authority for DFG by $1,459,000   and increasing reimbursement authority for the Secretary by a like amount to receive the funds for the California Legacy Project.

The use of federal funds for the California Legacy Project will result in a one-time General Fund savings. To the extent the state is eligible to receive funding from future-year federal grants to pay for costs to complete the Legacy Project, we recommend that these federal funds, rather than the General Fund, be used for support of the project.