Bacon's Rebellion

Another One-Time Spending Initiative: Money for Chesapeake Bay Clean-Up

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James A. Bacon
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Gov. Mark R. Warner has proposed a $243 million environmental package — the largest single investment in water quality in state history — for the Fiscal 2007-2008 budget. The initiative will, among other objectives, accelerate upgrades to 92 waste water treatment plants in the Chesapeake Bay watershed, helping meet the state’s new, “strictest in the nation” water regulations. (See the Governor’s press release for details.)

There has been a common theme to Warner’s recent budgetary announcements. The bulk of his new spending initiatives — $550 million for R&D in Virginia’s public universities, $290 million to build new, state-of-the-art mental health facilities, and $243 million dedicated to water clean-up — represent one-time expenditures.

Perhaps I’m a trifle over-optimistic here, but my sense is that Warner is being careful not to dump the state’s massive budget surplus into ongoing programs that will inflate the state’s long-term spending commitments. As I’ve argued before, if Warner isn’t willing to give the money back to taxpayers — which, politically, he can’t without admitting that he’d made a mistake raising taxes back in 2004 — the next best use is to apply the surplus funds to one-time expenditures that don’t permanently swell the size of state government. Bravo, Governor, Bravo!

Still, I can’t help but choke on Warner’s rhetoric. “Getting our state finances back on track,” he said, “has allowed us to make significant progress… blah, blah, woof, woof…”

This would have been more accurate: “Increasing taxes back in 2004 gave us a surplus we never anticipated, but now that we’ve got more money than we ever dreamed of, we’re putting it to good use.”

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8 responses to “Another One-Time Spending Initiative: Money for Chesapeake Bay Clean-Up”

  1. James Atticus Bowden Avatar
    James Atticus Bowden

    I like your last paragraph’s exposition of what really happened. If the GA doesn’t have the will to give the money back, the Christmas presents they are buying for one year – like the water plant upgrades aren’t bad. But, they really aren’t gifts to The People. The are like children buying presents for Daddy using his credit card. Voter Hint: Act surprised.

  2. Anonymous Avatar
    Anonymous

    His excellency so far looks like he will not be putting significant amounts of the GF surplus into transportation, putting the squeeze on the House of Delegates. But Friday we will see the whole picture. The water and sewer plants of course could bebeen upgraded 100 percent with user fees paid by the utility ratepayers, so this subsidy in effect keeps water and sewer fees lower, especially in the older urban localities….no such luck with a similiar subsidy to continue to keep Virginia’s gas tax so low?

  3. Anonymous Avatar
    Anonymous

    The transportation system needs help, but what good will more roads do if the economy of half of Virginia tanks because the bay becomes too polluted? What if Virginians don’t have clean drinking water? Our public universities lag behind both national and international competitors in R&D?

    I would argue that these are not ‘gifts’ (ie we don’t need them, but they are nice) but are necessities. While conservatives clamor about Warner’s tax reform and related budget surplus, they neglect to think about the necessity of the programs proposed by the out going Warner administration and the incoming Kaine administration for the use of those funds.

  4. subpatre Avatar
    subpatre

    It needs to be pointed out that the Commonwealth, not the localities, signed the Chesapeake Bay Agreement; it’s the state’s responsibility to fund it.

    Warner’s funding is for capital costs only. To meet the new standards also requires much higher continuing costs, both materials and personnel. Citizens need to remember their sewer rates will rise substantially, though not as much as if they funded the new plants.

    New plants may meet tighter standards most of the time, but the sewer lines won’t. During storms, rainwater and runoff gets into the lines (‘I&I’, pronounced eye-n-eye) making an enormous increase in volume at the plant. Most treatment facilities become overloaded or overflow, and untreated discharge is the rule. [A consolation is the rainwater causing the problem also greatly dilutes the overflowing raw sewage.]

    All sewer authorities with older pipes have to find the rainwater infiltration and repair it; usually pipe replacement. This is unforeseen capital cost, contributing to higher service bills. Many have played a shell-game, taking deposits and hook-up fees meant to finance current and future capital, instead using it for ongoing pipe replacement. This keeps service fees lower, but leaves no reserve for plant improvements or additions.

    No matter how you look at it, sewer fees are going up… a lot. Whether it will make a whit of difference to the Chesapeake has yet to be seen.

  5. Ray Hyde Avatar
    Ray Hyde

    I believe that modern cities have separate stormwater and sewage systems. That is one of the high costs of retrofitting the infrastructure of already built areas that does not get talked about.

    The Bay deserves to be kept clean, no doubt about it. We would never treat the Grand Canyon the way we treat the Bay. But the Bay is more than just Virginia’s problem.

    As far as the governors comments go vs Jim’s, I don’t see a difference that makes a difference. Maybe getting the budget in order recognized that the Bay cleanup would need to happen, maybe the surplus was never a surplus, but a means to meet the unmet needs which are largely ignored, postponed, or pooh-poohed.

  6. subpatre Avatar
    subpatre

    Let’s look at this: $50 million/year starting in 2005 through 2010. Governor Warner cuts that amount by 20% and gets praised.

    Ray – Stormwater and sewer drainages are separate; rainwater infiltration is an expensive problem all sewer systems have. And yes, the above link demonstrates that the surplus is really a surplus. New clean water needs weren’t “largely ignored, postponed, or pooh-poohed”, but fully funded. Just that now the surplus is used for budgeted items, the budget that would pay for this has to be reworked, probably ending up as surplus.

  7. Jim Bacon Avatar
    Jim Bacon

    Subpatre, As a point of information, the Warner is not cutting spending on the Chesapeake Bay Clean-up. The law that you reference would have put $50 million per year into the Virginia Water Quality Improvement Fund over six years. Warner is proposing to put $200 million into that fund in the next two years, which accelerates the investment in the clean-up by $100 million.

    Admittedly, I missed the fact when I made my original post that the legislation you cite would have required a $100 million investment in the next biennial budget. Adding $100 million dollars to the Bay clean-up is less dramatic than adding $200 million. Clearly, there’s somewhat less to the Governor’s press release than meets the eye.

    However, as I read the press release more closely, Warner did not claim that his initiative represented all new money. Indeed, he said that it would “accelerate” improvements, implying, to those who read it closely that there was something already in place to accelerate. He also thanked legislators for their bipartisan support.

    Still, by omitting mention of the $100 million required by existing legislation, the press release created the impression that Warner deserves credit for the full $200 million. I will be alert to such rhetorical tricks in the future.

  8. subpatre Avatar
    subpatre

    Thanks Jim. It’s frustrating to see our legislators work on real needs, enact it in a responsible manner, and get no decent press out of it; then have the Governor effectively ‘scoop’ the issue with a less responsible and less effective measure.

    The original bill called for funding through 2015, a more realistic date; and the code leaves that funding in, though with more possibility to cut-off as needed. The reality is that –after authorization by the locality or authority– it will be years before the price of a new plant is known. There are few firms that design and construct treatment plants, plant design and engineering takes a year or two, then there are additional access and setback requirements that the lawyers will have to work out.

    For practical purposes, it’s now 2006. Having new, state-of-the-art treatment plants in operation across all the watersheds by the end of 2010 is just not going to happen. DEQ will enter consent agreements as a way to grant grace periods, but the funding’s still necessary past that date.

    This doesn’t even start to address some of the land-owner issues of real, supposed and imagined agricultural runoff. Tied with that is the disposal of quadrupled sludge output, a fertilizer and soil amendment that’s disapproved by many of the same people urging Bay cleanup.

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