Has Christie Killed DEP “Polluter Pays” Policy?

I want to followup quickly on one important policy issue raised by the recent slashing of the Valero oil refinery fine by $1.5 million, particularly because development of next year’s DEP budget is underway behind the scenes.

DEP has long implemented what is known as the “polluter pays” policy. The policy is simple: polluters should bear the burden of costs associated with DEP oversight of their operations.

DEP collects permit fees and enforcement fines from polluters to fund DEP operations. The other sources of DEP revenue are federal funds and taxpayer contributions from the General Fund.

Governor Christie and his pro-business DEP Commissioner Martin are reversing this longstanding bi-partisan policy and providing subsidies to business interests at the expense of taxpayers and the environment.

The Valero deal (a 65% pollution fine reduction) is evidence of and reflects that policy change. This key point was ignored in the Philly Inquirer story.

As I previously wrote:

NJ taxpayers pay less than 2 tenths of 1% of the State budget to fund the operating budget of DEP. This implements the polluter pays policy. There is no taxpayer savings to be had by further slashing DEP budgets. ONLY 24.7% of DEP’s FY 2009 $230 million operating budget, just $56.81 million, is paid by taxpayers from the state general fund. (read DEP budget here);

The percentage of DEP funds that come from fines and fees has increased over time, thereby increasing the polluters’ burden and decreasing the taxpayers’ burden.

According to DEP legislative testimony on the FY ’09 budget:

Over the past decade and a half, DEP has, with the Legislature’s approval, steadily weaned much of our operations away from General Fund support by systematically increasing the reliance on fees and user charges. This reliance shifts the burden to specific parties that are responsible for the problems that we are working to correct or benefit from the services we provide. As a result, the percentage of DEP’s FY 2009 operating budget covered by the taxpayers will be only 24%,  significantly down from 41.3% in FY 2002.

Back in June, as the fine print on the State Budget emerged, we tried to warn the public that the Christie Administration’s first DEP budget violated this policy by slashing permit fee and fine revenues, and shifting the burden to taxpayers (for details and links to relevant documents, see: NEW JERSEY SLASHES POLLUTION ENFORCEMENT – Plummeting Fines and Fees Will Shortchange Future Enforcement Budgets).

We were not successful in blocking this radical policy change last year.

However, perhaps this year the Legislature will be more willing to protect the public interest and push back against Christie policies – which provide subsidies to corporate polluters – and block this move.

[End Note:  We recognize the reliance on permit fees has very negative consequences, which include:

• incentives to rubber stamp pemits to generate fees;
• shifts in DEP staff to permit fee generating programs; and
• starving critically important DEP functions, like science, monitoring, and natural resource management programs that are not fee funded.

However, solutions to these serious problems are to EXPAND the basis for calculating fees to include critical support services, like science, data collection, monitoring, and natural resource management. This will tend to INCREASE fees.

DEP also needs stronger regulations, stricter permit reviews, more aggressive monitoring and enforcement oversight, and stiffer fines.

Christie and DEP Commissioner Bob Martin are headed in the opposite direction on all these issues.

Cutting fees only makes the problesm WORSE.

Rolling back regulation, cutting staff, and pursuing a pro-business policy of considering polluters and developers “customers” is a recipe for the kind of disaster we saw in the Gulf of Mexico.