Impressions From Governor Tom Wolf’s First Budget Address

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PEC President and CEO Davitt Woodwell shares his thoughts on Tom Wolf’s first budget address as Governor of Pennsylvania:

Governor Tom Wolf has presented his first budget address. By all accounts, it has given just about everyone something to talk about: from taxes, corporate, personal, property, and shale to programs economic, education, community, and energy and environment. Not to mention pensions and bond issues.

The next few months will undoubtedly be full of discussion, debate, and, likely, deals as the deadline for a balanced budget approaches in the face of a structural two billion plus dollar deficit.

Shortly after the Governor finished with his address, acting Secretaries Cindy Dunn of DCNR and John Quigley of DEP held a briefing on what the budget proposals mean to their agencies. While there were some specific numbers talked about, the presentation and questions focused more on the broader impacts and implications of the Governor’s budget.

The major take-away is a philosophy toward strengthening the capacities of both DEP and DCNR. This will not happen in one year, but, if the proposals stand as presented, there will be significant change in how the agencies are supported fiscally. As a prime example, there is renewed commitment ($20 million) to support DCNR through the General Fund instead of from revenues from development on state land.

While this may not seem like a lot in a state budget of about $30 billion, remember that DCNR has had to rely heavily on Oil and Gas Fund monies for its day-to-day operating funds. This was, to me and others in the conservation community, more than a stretch of how those royalty funds were to be used. Any move that gets DCNR back to the General Fund is a positive start.

Another example of this commitment is proposed additional funding for DEP to build back some of its staffing complement that has been severely impacted for close to a decade – more than any other agency, in fact. This is not only a critical step to help ensure DEP meets its mission of protecting the environment, it will help it better meet the needs of the regulated community as well.

The Governor’s proposed budget also vigorously re-enters the world of alternative energy and energy conservation through a new series of funding initiatives. This is a win-win for addressing climate change as well as opportunities for economic development and costs savings.

While the details will emerge over the days, weeks, and months to come, the general tone of the day, and the enthusiasm of both Secretaries bode well for environmental and conservation programs. While other policy and budgeting issues remain to be addressed, it appears that budget discussions will not be solely about fighting rollbacks to our resource protection agencies. But how this plays out remains to be seen, and PEC will be more than watching. It will be an interesting few months.

A Note on the Severance Tax

A primary topic of the budget season has been a severance tax on shale gas. PEC’s position on this has consistently been that, if any such tax is enacted, regardless of its amount or structure, it must dedicate a significant portion of the funds raised to environmental and conservation programs. We are waiting to see the full proposal for the Governor’s severance tax before determining a position. However, it is clear that the opportunity exists to increase support for our resource protection agencies while preserving the funding currently provided to communities and programs under the current impact fee that is to be rolled into the proposed severance tax.