Fund ‘sweep’ upsets many

The state’s Environmental Protection Fund was created 15 years ago with the goal of ensuring that th
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The state’s Environmental Protection Fund was created 15 years ago with the goal of ensuring that the state could fund environmental projects such as land conservation, landfill closures and new recycling facilities in good economic times as well as bad.

Now, state environmental organizations are upset about Gov. Eliot Spitzer’s proposal to move, or “sweep,” $125 million in unspent funds from the Environmental Protection Fund to the state’s general fund to help balance the 2008-09 budget. On Monday, they will descend upon the Capitol to implore legislators to reject the move, and they’ve sent out action alerts to members urging them to contact their representatives.

“The Environmental Protection Fund, the main source of environmental funding in the state for the last 15 years, is being raided. Without your help, many open space, water quality and recycling programs may be in jeopardy,” reads the Adirondack Council’s action alert.

“We’re steaming mad,” said John Sheehan, a spokesman for the Adirondack Council.

“[The Environmental Protection Fund] is a lockbox, and they’re using it as a political slush fund to balance the general fund,” said Paul Ertelt, a spokesman for the Adirondack Mountain Club. “We want to put a stop to it. That’s not what the fund was intended to be.”

Matt Anderson, a spokesman for the New York State Division of Budget, said environmental funding is not in jeopardy. Money borrowed from the fund will eventually be returned; state law also mandates that should the EPF run out of money, the state would be obligated to return the funds it borrowed, he said.

“This will not impact any current or future spending for environmental protection,” Anderson said.

At the end of the 2007-08 fiscal year, the budget will have a balance of $128 million; next year’s budget will add $270 million in revenue if the proposed expansion of the bottle bill is approved by the state Legislature. The state projects that it will spend about $160 million out of the EPF next year, according to the Division of Budget, which means that, even with the sweep, there will still be a balance of $113 million at the end of the 2008-09 fiscal year.

“Given the substantial balance available, we don’t believe [the sweep] will have any impact on environmental spending,” Anderson said.

Additional sweeps totaling $75 million are proposed for the next three years.

Spitzer proposes budgeting $250 million for the Environmental Protection Fund next year. But the environmental groups contend that that isn’t enough money, and suggest raising the funding to $275 million. The proposed budget sets aside $66 million in the EPF for land acquisition, but the environmental groups would like that amount to be closer to $100 million.

Last year the Legislature agreed to increase the size of the Environmental Protection Fund to $300 million by 2009.

Done before

Sweeping money from the Environmental Protection Fund to the general fund is not unprecedented.

In 2002, when the state struggled to recover from 9/11, Gov. George Pataki, citing the poor national economy, proposed moving $100 million from the EPF to the general fund. In five of Pataki’s last six years, similar sweeps occurred, totaling $322 million.

“They’ve never repaid a cent of that,” Ertelt said.

Other environmental activists said they were concerned about the sweep, and opposed to it, but understood the reason for it.

“It’s a fairly large sweep,” said Richard Schrader, the New York state legislative director for the National Resources Defense Council. “As these sweeps become more substantial, they may impact the funding of programs. We’re asking that the sweep be diminished. We understand that [in tough budget years] there will be sweeps, but this is a dramatically large sweep.”

Laura Haight, senior environmental associate for the New York Public Interest Research Group, said NYPIRG’s primary concern is seeing the funding for the EPF increased to $275 million. “We oppose the sweep, but we think people are paying too much attention to it,” she said. “What we really need is increased funding.”

“We see environmental needs as immediate,” Haight said. “As more land gets swallowed up by developers, there’s more of a need for the types of things the EPF funds.”

Permanent fund

In 1986, the state passed a bond act to fund big environmental projects, such as the acquisition of open space. But by 1989, the money was running out. Another bond act was proposed in 1990, but this one failed. As a result, the state decided to create the Environmental Protection Fund, a permanent fund that would provide steady funding for environmental projects even in an economic downturn.

“These are projects we always have a need for,” Sheehan said. “The idea was to make sure these needs were met whether or not the economy was going gangbusters.”

He said communities expect financial assistance from the state when they close landfills.

“They’ll scramble to find that money on their own,” he said. “Recycling plants will go unbuilt. We’ll miss important land acquisition opportunities.”

If the Environmental Protection Fund isn’t properly funded, “the only people with the money to buy land are speculators,” he said. “We’ve seen massive subdivisions proposed for the Adirondacks and Catskills.” He said that right now there are at least $200 million worth of land acquisition projects in the Adirondacks alone.

“This is something we didn’t expect from the Spitzer administration,” Sheehan said. He pointed out that the governor cannot sweep the money without the support of the Legislature. “We think there’s heavy resistance,” he said. “We’ve got to make it plain the public doesn’t want this.”

The majority of the Environmental Protection Fund’s funding comes from revenue from the Real Estate Transfer Tax. The state has proposed expanding the bottle bill, which currently applies only to carbonated beverages, to cover water, juice, iced tea and sports drinks. This would generate an additional $25 million for the Environmental Protection Fund, but there’s no guarantee that it would pass.

A similar effort failed last year, but environmentalists say they are optimistic that this year’s proposal will be successful.

“The sweep points to how badly the state needs this money,” Haight said.

Categories: Schenectady County

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