KRC Budget Testimony

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KRC Budget Testimony  Posted: February 21, 2003


KRC presented testimony before the Senate Appropriations and Revenue Committee this afternoon (Thursday). Click the headline above to read the presentation.

KRC has suggested that the budget resolution, which carries the force of law, include language override other state laws limiting permit fees, and that the Cabinet be authorized to adjust permit fees to capture the full cost of processing and conducting compliance inspections on regulated facilities. Typically permit fees capture a small fraction of the real costs, amounting to a pollution subsidy that the state can ill-afford. Truing up the costs of permitting and regulatory oversight will also encourage pollution reduction, just as the imposition of emissions-based permit costs for Title V air permits did for air emissions.

Send a message to the Senate members urging them to end the pollution subsidy, and to restore the natural resources budget (including the Environmental Quality Commission and Kentucky Nature Preserves Commission) to the budget levels requested by the Governor. Here is a list of the Senators: Williams, Roeding, Kelly, Borders, Tori, Worley, Turner, Jackson, Guthrie, Neal, Boswell, Herron, Leeper, Moore, Pendleton, Shaughnessy, Jones, Kerr, McGaha, Palmer, Seum, Stivers, Robinson, Denton, Harris, Mongiardo, Rhoads, Karem, Tapp, Stine, Thayer, Casebier, Westwood, Buford, Sanders, Scorsone, Saunders, Blevins. The LRC fax line is 502-564-6543; the legislative message line is 1-800-372-7181.



Kentucky Resources Council, Inc.

Post Office Box 1070

Frankfort, Kentucky 40602

(502) 875-2428 phone (502) 875-2845 fax








Chairman Sanders, members of the Senate Appropriations Committee, I appreciate the opportunity to submit these concerns regarding the proposed FY 03 and 04 budget for the Natural Resources and Environmental Protection Cabinet, including the Environmental Quality Commission and Kentucky Nature Preserves Commission.


The environmental programs of this state are at times not the most popular, particularly in the halls of this building, since in order to protect the interests of the public, and to safeguard for our children and theirs the air, water and land resources, the toes of some powerful interests get stepped on. We tend not to think a lot about environmental quality until it directly affects us, but the business of protecting our state's environment is a 24/7 job, carried out with a small fraction of our state budget by a staff more dedicated than we have any right to expect.


KRC fears that the House-passed Cabinet budget, coming after administration-mandated reductions in expenditures, will result in significant curtailment of the progress that has been made in many areas in recent years. The impact will be felt both by the regulated community, who relies heavily on the assistance and expertise of the agency in processing permits and assuring compliance with environmental laws, and by your public constituents, who expect prompt response and investigation of environmental complaints. The reductions contained in the budget bill will have a significant negative effect on an agency that is already called upon to do so much with too little, protecting at short pay the very building blocks of a healthy state and a healthy economy. It is important that the capacity of the agency to protect the public and environment over the long-term not be damaged further in the Senate proposal, and that instead the agency be allowed to augment the general fund appropriations in order to fill critical vacancies in technical support and compliance.





KRC has these specific recommendations concerning the budget for the Cabinet:


1. Authorize the Cabinet to adjust Permit Fees To Fully Capture Costs Of Permit Review And Compliance


The budget resolution should direct the Cabinet to adjust permit fees in order to fully capture the actual costs of processing the permit applications and of periodic inspections required to be conducted during the permit term.


Currently, most permit fees, which are set by statute, capture only a small fraction of the real costs of processing, reviewing, and issuing or denying the applications. This failure to pay the real costs of the government service amounts to a pollution subsidy that the state can ill-afford. Those funds should be returned to the agency to help offset the budget cuts.


2. Fully Fund EQC and KNPC


The Environmental Quality Commission, an advisory body attached to the Natural Resources Cabinet, has been an important sounding-board for environmental issues ? providing a public forum on major environmental issues; and producing the only barometer of environmental progress in its State of the Environment reports. The Commission has been subject to periodic assaults on its budget by special interests, and there is apparently some that believe the current budget shortfalls provide a convenient excuse to eliminate EQC. At 262.5 thousand in FY 03 and 276,300 in FY 04, whatever minute gain might be achieved from cutting that budget item would be offset by the significant and lasting damage that would be done to the public's interest by removing a multi-interest panel that has for a quarter of a century provided an important forum on current and emerging issues and given the state a periodic report card on environmental performance that we need even though we may not be thrilled sometimes to be reminded of the grades we've earned.


I would also ask that you review the funding for the Kentucky Nature Preserves Commission and restore the FY 03 and 04 funding and staffing levels recommended by the Governor. Part of the benefit that permit applicants for air, land, waste and water permits receive but don't pay full value for is the review performed by the Nature Preserves Commission of the potential impact of activities on protected species and their habitat. The important work of inventorying the remnant natural areas of the state, of managing those nature preserves that you have established, and of facilitating the permitting of industrial and commercial activity by advising on permit reviews, is managed with a very small budget and staff. Cuts that a larger agency might be able to absorb without significant curtailment of services are disproportionately felt by smaller agencies such as the KNPC. I ask your careful consideration of the important role served by KNPC and their budgetary needs.


3. Maintain Ownership and Control Language


Finally, KRC appreciates the commitment of the Committee Chair and Senator Stivers to retaining, during the current budget cycle, the language contained in the budget regarding the blocking of new mining permits for outlaw coal companies with links to current permit applicants. Permit blocking based on ownership and control links has been an important tool in preventing those who would violate the law from gaining benefit through corporate artifice, by barring new permits for those who are owned or controlled by those who have outstanding violations of the law. Given the long history of abuse of the mining laws by a small segment of the industry, continuation of this permit blocking mechanism is essential for both the public and the industry. We look forward to working with the Cabinet, the industry and the legislature to place this permit blocking requirement into statute during the 2004 Regular Session, and appreciate your commitment to retain it as budget resolution language until that time.





By Kentucky Resources Council on 02/21/2003 5:32 PM
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