EPA:

State GHG program funds hit hard under budget deal

While the spending bill Congress and the White House etched out late last week did not handcuff U.S. EPA's ability to regulate greenhouse gases, the agency's climate program still took a hit.

The continuing resolution that lawmakers are expected to vote on this week quietly zeroed out proposed funding states hoped to use to implement new climate regulations.

In the administration's initial fiscal 2011 budget, Obama had requested $25 million to help fund states' efforts to comply with new climate regulations. But that money -- along with another $57 million to assist with other new air pollution programs was rejected in the budget deal that Congress hammered out late Friday.

Failing to net those funds and putting a gash in other programs states and tribes depend on to prepare for new federal rules or shore up water infrastructure could spell trouble, said Bill Becker, executive director of the National Association of Clean Air Agencies.

"These programs are the bloodline of our existence, so it will have a dramatic impact," he said. And without the funding to help finance greenhouse gas permitting programs, it could take longer to move applications through the system, he said.

As of Jan. 2, large stationary sources with a sizable carbon footprint must seek greenhouse gas air permits from local or federal regulators if they are building a new facility or modifying an old one.

The money 'would have been nice'

In order to finance these greenhouse gas permitting activities without the assistance funds, Becker said, states may have to go to their state legislatures to ask for money or hike the costs of greenhouse gas permits.

Few of these greenhouse gas permit applications have come through the system so far, state regulators say, so they have been able to get by with existing funds and permit fees. But several states -- including Washington -- say they are expecting more permit applications in the next six months.

Stuart Clark, the program manager for the Washington Department of Ecology's Air Quality Program, said his state had been hoping for some of the federal assistance funds -- but it was not counting on them.

"There has been so much uncertainty with the federal budget since the fall that we have just been thinking we should just expect the 2010 status quo," Clark said. "Still, it would have been nice to get the money."

The lack of these funds will not be a big problem for Washington, since the state is in the process of raising its permitting fees, said Clark. He said the state's plans to charge higher fees did not hinge on the greenhouse gas permit costs.

So far, the state has not been put to the test on its greenhouse gas permit financing, since no completed permit applications have reached Clark's desk, he said.

New Jersey, too, has not yet seen any completed greenhouse gas applications, said Larry Ragonese, a spokesman for that state's Department of Environmental Protection. He said New Jersey planned to fund such work with existing permitting fees and was still assessing what the continuing resolution could mean for its future plans.

Total EPA cuts: $1.6 billion

Becker attributes the low number of greenhouse gas permit applications to several factors: the down economy, the fact that some permit applications were greenlighted under the wire -- before Jan. 2 -- and that some companies may be watching to see what Congress will do on this issue before submitting their applications.

The continuing resolution would finance the government for the remainder of the fiscal year and cut nearly $40 billion compared to last year's budget.

Details of the legislation were released yesterday, and the bill is expected to be voted on later this week.

EPA's budget would see a $1.6 billion reduction, a 16 percent cut from last year's level.

Its science programs would be trimmed by about $31 million as compared to fiscal 2010, leaving $815 million for the remainder of the year. Meanwhile, Superfund would net $1.28 billion, a cut of about $23 million from fiscal 2010.

Many of EPA's budget cuts came at the expense of its air and climate programs at the state level, said Becker.

The budget would include $1.12 billion in cuts to state and tribal assistance grants and rescind $140 million in unobligated funds from that area.

States cannot afford the cutbacks, since they are already struggling to finance these programs, he said.

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