What Proposed EPA Budget Cuts Mean for the States

Chesapeake Bay pollution sources
Chesapeake Bay blueprint for clean water

What Proposed EPA Budget Cuts
Mean for the States

Will cutting EPA will make state environmental programs stronger? EPA Administrator Scott Pruitt and Colorado Senator Cory Gardner justify gutting EPA by claiming that States should take the lead in environmental protection. They argue that eliminating “overbearing environmental regulations” will unburden states and allow them to take their “proper role.” This is doublespeak. Weakening EPA will weaken state environmental agencies, not make them stronger.1

(1) Money for state environmental programs

More than half of EPA’s budget is passed through to states for use on everything from air quality monitoring to wastewater plants. (See Figure 1.) EPA and states work together to determine where state funding goes. EPA grants currently fund state programs addressing air quality improvement (~$230 million per year); water and groundwater pollution (about $230 million per year); drinking water improvements ($100 million per year); as well as toxic chemical reduction; hazardous site cleanup; and a variety of programs to address regional pollution – which states can’t address on their own.2 EPA’s revolving loan programs provide long term, low cost funding for water and wastewater treatment plants3 and cleanup of industrial waste sites.4 Some EPA funding is also directed to state university research programs; environmental education in schools; and a variety of state and local pollution prevention programs. (See Figure 2.)

The Trump Administration’s proposed budget would eliminate or drastically reduce funding in every environmental program.

The Colorado Department of Public Health and Environment receives $28-30 million from EPA each year, mostly in the form of grants.  “This represents approximately one-third of the funding CDPHE relies upon to implement and ensure compliance with a variety of federal laws, including the Clean Water Act, the Hazardous Waste Program and the Clean Air Act,” according to CDPHE Director Dr. Larry Wolk.5

Since the early 2000s, about 300 grants worth more than $500 million have been awarded to Colorado. These grants have helped the state fulfill clean air and water mandates and pay for Superfund cleanups. The 22 active Colorado grants, worth tens of millions of dollars, primarily fund drinking water safety and wastewater management efforts statewide but also fund cleanup of the Captain Jack Superfund site in Boulder County, assistance to the Colorado River Indian Tribes’ Environmental Program and a handful of university research projects. 6 [In 2014] Colorado Department of Public Health and Environment received $17.6 million in grants from the EPA, while the Colorado Water Resources and Power Development Authority received $25 million. The authority provides low-cost financing for water and wastewater infrastructure projects.7 The city of Durango recently received loans of $62.2 million to rehabilitate a wastewater treatment plant through the revolving grant program. The EPA also tracks the management of toxic chemicals at some 228 facilities all across Colorado, helping to reduce waste in our air and water that poses a threat to human health.8

Colorado, with its Tabor-constrained budget, is not in a position to fill the financial gaps left by proposed EPA budget cuts. The Governor and legislature are struggling to find dollars to cover essential services already on life support – like education and transportation – in addition to dealing with the fall-out from health care changes. In this constrained fiscal environment, we are fortunate that CDPHE’s budget has merely been been flat or dropping slightly over the last few years. Whether that will continue into the future is unclear – but it is clear that Colorado lawmakers will not be able to give CDPHE sufficient dollars to cover the loss of federal funds.
Update: This year, Colorado has an estimated $500 million spending gap for the upcoming budget year (2018) and needs to fill a $110 million shortfall in the current year (2017). “It’s Halftime”
Ellen Gilinsky, former director of the Virginia Department of Environmental Quality’s water program, recently said, “States totally depend on the grants they get under the Clean Water Act, Clean Air Act, the Safe Drinking Water Act [and other federal environmental laws]. Fifty to 60 percent of the funds for the Virginia water program came from the EPA. If we had doubled our permit fees to help fund our water program, we still wouldn’t have covered the cost. And if we had, the business community would not have appreciated higher permit fees.”9
Other states are in a similar or worse position. Forty state environmental agencies have reduced staff in recent years, according to an October 2016 report by the Center for Public Integrity. Since 2007, staffing at environmental agencies in Illinois and Arizona dropped by more than a third, in New York by nearly a quarter, and in Michigan and Florida by a fifth.10
With state cutbacks like those, there’s a clear need for more support from the EPA, not less.

(2) State Economies & Jobs

EPA contracts with private companies, bringing jobs and millions of dollars to states. EPA- funded contractor services range from hazardous waste handling and water quality testing to software and engineering services. Some programs, like Superfund, are required by law to be carried out through private contractors. Nationally, EPA has more than $6.4 billion in contracts in place with over 600 companies.11 Cuts to EPA will result in lost revenue to companies and organizations, starting a cascade of cutbacks and lost jobs in the private sector.

During the 2017 fiscal year, EPA funded grants and contracts for work in Colorado with a total value of $6.37 million.12
Colorado currently has more than 600 EPA contracts for projects by businesses and institutions. Aerospace company Lockheed Martin, with a major presence in Colorado, has done $373 million worth of work for the EPA since fiscal year 2008. The engineering firm CH2M Hill did more than $11 million worth of work for the EPA just in fiscal year 2016, including $117,000 worth in Colorado. Colorado State University currently has almost $5 million in active EPA grants funding projects involving 700 faculty members. Bayaud Enterprises, a Denver nonprofit that provides employment and support for people with disabilities and other barriers to employment did more than $500,000 of contract work for the EPA last fiscal year, placing disabled people in mailroom jobs and printing jobs at the agency’s downtown Denver headquarters.13
Denver is home to EPA’s regional headquarters for the six-state Mountain and Plains Region (Colorado, Montana, North Dakota, South Dakota, Utah, Wyoming) and 27 tribes). EPA Region 8’s budget brings to hundreds of millions of dollars per year. It directly employs roughly 600 civil servants in Colorado and hires hundreds of private-sector contractors.14 A number of environmental consulting firms and law practices maintain offices in Denver to gain proximity to EPA’s Region 8 staff.
The Trump administration has directed EPA to consolidate two of its ten regional offices, and signaled that the Denver office is one of those targeted for possible closure. EPA must present a plan to accomplish regional consolidation to the Office of Management and Budget (OMB) by June 15, 2017.

(3) Technical support to state environmental agencies

States already have the lead for environmental permitting and enforcement for almost all environmental programs in almost every state. Once a state legislature creates an environmental agency and creates legislation giving that agency legal authority comparable to the federal statue, EPA “delegates” legal authority to that state agency. Where federal law does not provide delegation authorities, EPA has established state partnership programs.
Delegation does not mean that EPA fades into the background. To use a baseball analogy, EPA serves as a backstop and a deep bench for state environmental agencies. EPA has professionals with deep expertise in every area of environmental science and public policy. Staff at EPA’s Headquarters and 10 regional offices routinely provide technical support to state agencies, functioning as team members, trainers and consultants – it’s how a significant portion of EPA staff time is spent. EPA Regional staff are also 1st responders in every kind of emergency, from oil spills to hurricanes to space shuttle disasters. No individual state could afford to maintain this extensive network of environmental expertise.
EPA’s staff has already shrunk by 10 percent over the last decade, from 17,000 in 2007 to about 15,000 today. (See Figure 4.) The Trump Administration’s proposed budget would reduce EPA staffing by another 20 percent, to about 12,000 ( a loss of 3000 civil service jobs). EPA hasn’t been that small since the mid-1980s – and its statutory and programmatic responsibilities have grown substantially since then.15
“The EPA provides more than just money,” said Ellen Gilinsky, former director of the Virginia Department of Environmental Quality’s water program. “It provides supporting information, new technology evaluations, training materials, and other expertise. The EPA water division, for example, offers a permit writing training course for state workers. EPA experts train them. States don’t have the wherewithal to provide training.”16
“Having served as a state environmental commissioner, I know from personal experience that state environmental agencies are already strapped,” Ken Kimmell, a former Massachusetts environmental director, wrote in a recent blog post. “They typically lack the technical experts employed at the EPA, and stand in no position to take on additional enforcement responsibilities shed by the EPA… If the EPA’s budget is cut, it will mean even fewer resources for states, because states now receive a significant share of the EPA’s budget to cover enforcement activities.””17

(4) Public health, cross-boundary pollution and the“Gorilla in the Closet”

State boundaries were not created with water- and air-sheds in mind. Pollution does not stop at state borders – but state environmental authorities come to a hard stop at the state line. EPA’s regional and geographic pollution programs – like those in the Great Lakes, Gulf of Mexico and Chesapeake Bay – bring EPA’s cross-border jurisdictional authorities to the table to address cross-border problems that no individual state can manage. OMB proposes to eliminate or drastically reduce (by 93-97% ) all of these critical water quality programs.
In these days of multi-national companies, many corporations own polluting facilities in several states, making it difficult for one state agency to police them.
“Electric utilities, oil refineries and retailers like Walmart are all national companies,” said Eric Schaeffer, director of EPA enforcement from 1997 to 2002. “Only the federal government can deal with them. Take a BP refinery [in Indiana or Ohio]. It is polluting in more than one state.” When the EPA takes enforcement action against a refinery, Schaeffer explained, states “could be assured that refineries in other states were being treated the same way for the same violations.” Walmart — the nation’s biggest retailer — “had a consistent pattern of stormwater violations in a number of states,” said Schaeffer, now executive director of the Environmental Integrity Project. “It makes sense to deal with the company nationally. Why leave underfunded state agencies to deal with [Walmart] when you have these violations across the country? If you leave it to state agencies, companies can evade prosecution in states that don’t have the ability to enforce the law.” 18
The US Constitution’s Commerce Clause (in which our federal environmental laws are grounded) was set up to ensure that the playing field for companies is equal across all states. In the days before EPA, states would sometimes compete in a “race to the bottom,” lowering environmental standards to attract industry. Even today, it’s often hard for a state agency to stand up to local political pressure against a polluting company lobbying against the need to install controls or pay fines for non-compliance.
Enter EPA in its “Gorilla in the Closet” enforcement role. EPA maintains oversight over state programs after they are delegated, and has authority to step in to require tougher controls or stiffer fines agains a company where necessary. EPA does not take “over-filing” lightly, and never takes such action without first working with the state. State permit writers and enforcers often use this as a negotiating tool: “Better to settle with us,” they tell companies, “than have to deal with EPA.”
OMB has proposed cutting EPA’s enforcement program by 11%.
“You won’t see a state agency, say in Ohio, bring an enforcement action against a large coal-fired power plant,” Schaeffer explained. “It is not just a job issue. The bulk of the pollution from the coal plant is likely going into Pennsylvania, so you won’t see Ohio sue.” That’s why, Schaeffer said, “it’s a good thing to have the feds come in from the outside to enforce environmental laws. Having the EPA standing behind state environmental agencies gives them leverage to negotiate with violators. States can say to a polluter: ‘Either deal with us or with the EPA.’” 19
Today, some states are once again engaged in a race to the bottom – with the Trump administration now leading the race downhill.
Florida is a prime example. Over the last six years, Governor Rick Scott has ripped the state’s Department of Environmental Protection (DEP) to shreds. When he ran for reelection in 2014, the Tampa Bay Times ran a scathing editorial calling his first term an “environmental disaster.” But Scott did much more than just “weaken” enforcement. He virtually eliminated it. In 2015, the Florida DEP began 81 percent fewer enforcement cases than in 2010, according to an analysis of state records by Public Employees for Environmental Responsibility (PEER). Case outcomes, meanwhile, were worse than in nearly any previous year.
Despite the DEP’s sorry record under Governor Scott, a freshman U.S. representative from Florida, Matt Gaetz, introduced legislation in early February that would eliminate the EPA by the end of 2018 and devolve all of its responsibilities to state environmental agencies. Like Pruitt, Gaetz maintains that “states and local communities are best positioned to responsibly regulate the environmental assets within their jurisdictions.” The Florida DEP collected the lowest number of fines in 28 years, PEER found, and assessed no penalties in a third of its cases.
“In Florida, polluters do not need a ‘Get Out of Jail Free’ card because few pay any fine and virtually none risk going to jail no matter how egregious the environmental offense,” Florida PEER Director Jerry Phillips, a former Florida DEP enforcement attorney who conducted the analysis, said in a press release. “Under Gov. Scott, DEP staff are strongly discouraged from bringing enforcement actions and the plummeting numbers reflect it.” 20
Other examples of states on the downhill racecourse:
Wisconsin Gov. Scott Walker cut his state’s Department of Natural Resources (DNR) budget by $59 million since taking office in 2011 and eliminated nearly 200 positions, including half of its scientists. Last June, state auditors found the Wisconsin DNR doesn’t follow its own enforcement policies to protect state waters from livestock, factory and sewage treatment plant pollution.21
West Virginia Department of Environmental Protection is not enforcing state coal mining regulations, according to a three-year investigation by the U.S. Interior Department. The report found the agency routinely fails to monitor water quality, enforce mine reclamation standards, or ensure mountaintop removal doesn’t trigger local flooding.22
North Carolina state legislators have stymied efforts to clean up electric utility coal ash dumps, reduced that state’s North Carolina Department of Environmental Quality staff by a third, and instructed DEQ regulators to soft-pedal the enforcement of air pollution standards.23
And then there’s Oklahoma, where Scott Pruitt’s served as State Attorney General until his recent appointment as EPA Administrator. The AG’s job is to prosecute violations of environment laws, but…
“In 2016, Pruitt dismantled his office’s Environmental Protection Unit, halted efforts to reduce poultry manure that pollutes streams in Oklahoma and Arkansas, and sued the EPA 14 times to block stronger air, water and climate safeguards, including standards that would reduce regional smog and airborne mercury pollution. Pruitt also stood idly by while hydraulic fracturing made Oklahoma the most earthquake-ravaged state in the country. Earthquakes from fracking have increased due to deep well disposal of fracking’s produced water. Last week the Pawnee Tribe in Oklahoma sued several oil companies over earthquake damage to their properties.24
Although Pruitt’s AG office did not regulate oil and gas development, he could have intervened to protect residents, for example, when their insurance claims were denied. And like Pennsylvania’s attorney general, he could have investigated — and prosecuted — frackers for violating environmental laws and polluting the water supply. He did nothing….Reading between the lines, Pruitt’s vow to empower “the people” really means empowering corporations, which, after all, are considered people under the law. And when he says his agency is going to “advance freedom,” he’s really talking about advancing the freedom to pollute.”25

 1 This analysis is based on the OMB budget markup provided to EPA on February 27. Details of funding cuts may change in the Trump Administration’s budget proposal scheduled for release on March 16.

2 Data on dollar amounts contributed by EPA to air, water and drinking water programs from https://www.nrdc.org/sites/default/files/how-epa-protects-environment-and-health_20170227_1.pdf

3 https://www.epa.gov/cwsrf/learn-about-clean-water-state-revolving-fund-cwsrf

https://www.epa.gov/cleanups/basic-information-about-cleanups

5 http://www.denverpost.com/2017/01/25/colorado-epa-funding-freeze/; Personal conversation with CDPHE budget

6 http://www.coloradoan.com/story/news/2017/02/14/what-happens-colorado-if-epa-shrinks/97897260

7 https://www.denverite.com/trump-epa-freeze-colorado-organizations-csu-lockheed-martin-27824/

8 https://www.denverite.com/trump-epa-freeze-colorado-organizations-csu-lockheed-martin-27824/

9 http://www.huffingtonpost.com/entry/gutting-epas-budget-and-staff-would-endanger-the-health_us_58b75494e4b0563cd36f6496

10 http://www.huffingtonpost.com/entry/gutting-epas-budget-and-staff-would-endanger-the-health_us_58b75494e4b0563cd36f6496

11 https://www.denverite.com/trump-epa-freeze-colorado-organizations-csu-lockheed-martin-27824/

12 http://www.denverpost.com/2017/01/25/colorado-epa-funding-freeze/

13 https://www.denverite.com/trump-epa-freeze-colorado-organizations-csu-lockheed-martin-27824/

14 https://www.coloradostatesman.com/denver-region-8-epa-consolidation-trump-pruitt/

15 By comparison, nearly 100,000 people work at the Agriculture Department, nearly 47,000 are at the Commerce Department, and nearly 78,000 are at the Department of Health and Human Services. The Department of Defense employs 742,000 civilians, with over 1.3 million men and women on active duty. https://www.defense.gov/About

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