OMB Proposes Cuts to EPA Budget/Grants

February 28, 2017 – The U.S. Office of Management and Budget (OMB) has provided EPA with the FY 2018 budget “passback,” which outlines proposed devastating cuts to the agency’s budget, including a 30-percent reduction in state and local air grants from FY 2017 levels, a 24-percent cut to EPA’s overall budget and a decrease of 19 percent to staffing levels at EPA.  The 23-page document details funding levels for EPA’s programs and includes the following significant provisions, among many others: $159.5 million for state and local air quality management grants (Section 103/105 grants), which is a 30-percent reduction from the FY 2017 level of $227.8 million; $6.16 billion for EPA’s overall budget, which is a 24-percent reduction from the FY 2017 level of $8.24 billion; a 12,397 full-time equivalent (FTE) staffing level for EPA, which is a 20-percent reduction from the FY 2017 level of 15,376 (some of which will be due to attrition, early retirement, buyouts or reductions in force); consolidation of 10 EPA regions into eight (a comprehensive plan to accomplish this is due to OMB by June 15, 2017); elimination of the Diesel Emission Reduction Act grant program (“other sources of federal and state funding are available to fund high priority projects and the legacy fleet will eventually be replaced by vehicles that use newer, cleaner engines.”  The passback identifies the Volkswagen settlement as a possible alternate source of funding.); elimination of Targeted Airshed Grants; reduction of 69.4 percent in the Climate Protection Program. Funding is maintained for greenhouse gas reporting, accounting and basic analytical capabilities, but funding for  regulatory and voluntary climate change mitigation programs is substantially reduced; elimination of the Indoor Air Radon Program and State Indoor Radon Grants; elimination of the Environmental Justice (EJ) office and a reduction of EJ funds by 77.7 percent from FY 2017 levels (“policies in place are strong enough to continue forward”); shift in focus for enforcement and compliance programs to “eliminating potential duplication of effort” including activities carried out by states.  EPA will “shift focus to non-delegated programs and encourage states with delegated authorities to assume more active enforcement roles”; reduction of 32 percent in EPA’s Science and Technology budget; and elimination of a list of geographic and other programs, including Alaska Native Villages; Beach and Fish programs; Brownfield projects; Clean Power Plan implementation; Climate Voluntary partnership programs (14 programs); Endocrine grants; Energy Star grants (transfer “ownership and implementation of Energy Star to a non-governmental entity”); environmental education; geographical programs (Lake Champlain, Long Island Sound, San Francisco Bay and South Florida and near elimination of the Chesapeake Bay, Great Lakes Restoration and Puget Sound programs); Global Change Research; Mexico Border grants; multi-purpose grants; Office of Public Engagement; Science to Achieve Results (STAR) Research grants; Small minority business assistance; U.S. Mexico Border Program; and WaterSense. A passback is OMB’s response provided annually to federal agencies’ and departments’ initial budget proposals.  Agencies have an opportunity to respond to the passback (in this instance, EPA was given until Wednesday, March 1, 2017 to respond) and then the Administration’s budget proposal is compiled based upon this process.  The result is the Administration’s proposed budget that is sent to Congress.  It is important to note that the Administration’s proposal is not the final budget. In appropriating funds, Congress can heed the Administration’s request or develop other budget amounts.  News reports of the reactions of members of Congress indicate that some Representatives and Senators from both parties have expressed concerns about such significant cuts to EPA’s budget.  In response to reports of significant cuts to state environmental grants, the Environmental Council of the States (ECOS) sent a letter to OMB Director Mick Mulvaney and EPA Administrator Scott Pruitt emphasizing the critical importance of grants to state programs and expressing concern about the profound impacts that grant reductions would have on states’ ability to “implement the core environmental programs as expected by our citizens.”  ECOS noted that “[t]he time is now to meaningfully invest in state environmental agencies though robust – not reduced – STAG categorical grants.”