Appropriations

FY 2018 Budget and Congressional Appropriations

Background

On March 16, 2017, the Administration released its “Budget Blueprint” for FY 2018 containing general information about its proposed budget, which calls for cuts to EPA’s budget of 31 percent, reductions in EPA staff of 21 percent and a 45-percent cut to categorical grants (Section 103 and 105 air quality grants are under the categorical grant line item).  The budget proposal, entitled, America First: A Budget Blueprint to Make America Great Again, is not detailed enough to ascertain the impact on state and local air quality grants specifically; however, it states that “[t]his funding level eliminates or substantially reduces Federal investment in State environmental activities that go beyond EPA’s statutory requirements.”  Other significant reductions in the budget blueprint include a 25-percent cut to funding for the Office of Enforcement and Compliance Assurance and a 48-percent decrease to the Office of Research and Development.  The blueprint also calls for discontinuation of funding for the “Clean Power Plan, international climate change programs, climate change research and partnership programs, and related efforts;” elimination of funding for specific regional programs, such as the Great Lakes Restoration Initiative, the Chesapeake Bay and other geographic programs (stating “[t]he budget returns the responsibility for funding local environmental efforts and programs to State and local entities, allowing EPA to focus on its highest national priorities”); and elimination of over 50 EPA programs, including, among others, Energy Star; Targeted Airshed Grants; the Endocrine Disruptor Screening Program; and infrastructure assistance to Alaska Native Villages and the Mexico Border.  In May 2017, the Administration is expected to propose a more specific budget, which will be submitted to Congress for consideration. Congress has the ultimate say in how much to appropriate to federal programs.

Key Actions

July 18, 2017 – The House Appropriations Committee marked up and approved by a vote of 30-21 a bill to provide EPA’s funding for FY 2018.  It is unknown when the full House will take up this bill for a floor vote.  The House Appropriations Subcommittee on Interior, Environment, and Related Agencies had approved this bill on July 12, 2017 (see Washington Update of July 10-14, 2017 for details).  Additionally, on July 17, 2017 the committee released the draft committee report that accompanies the legislation and provides additional details and instructions related to FY 2018 funding.  The bill provides level funding (compared to the FY 2017 enacted level) – $228.2 million – for state and local air grants under Sections 103 and 105 of the Clean Air Act (the Administration requested $159.5 million for FY 2018).  The bill includes $7.5 billion in FY 2018 for EPA’s overall budget (the Administration requested $5.7 billion; the FY 2017 appropriation was $8.1 billion). The bill calls for retaining funding for fine particulate matter monitoring under Section 103 authority, rather than transitioning to Section 105 authority as EPA proposed, includes $75 million for grants under the Diesel Emission Reduction Act (DERA) program and provides $40 million for the Targeted Airshed Grant program.  Among the riders in the bill is a postponement of the implementation of the 2015 ozone National Ambient Air Quality Standards (NAAQS) such that governors would submit their designations by October 26, 2024, EPA would promulgate final designations by October 26, 2025 and states would submit their State Implementation Plans under Section 110(a)(1) by October 26, 2026.  Further, the rider would exempt permitted sources from the 2015 ozone NAAQS under certain circumstances, instead allowing them to comply with the previous, less stringent ozone standard.  During the full committee mark-up, there were several amendments related to air quality that did not pass.  Rep. Betty McCollum (D-MN) offered an amendment that would remove several air quality-related riders from the bill (e.g., the schedule for the implementation of the ozone standard, restrictions on greenhouse gas reporting), but it was not adopted.  Rep. Mike Quigley (D-IL) offered an amendment intended to ensure that the 10 EPA regional offices would remain open.  This failed, with opponents arguing that recent testimony from EPA Administrator Scott Pruitt implied that this was not a concern and that Congress would have the ultimate say in those decisions through the appropriations process.  Rep. Matt Cartwright (D-PA) proposed report language requiring agencies to prepare for and mitigate the effects of climate change.  This amendment also failed.  The report and bill text address several air-related provisions, including the following:  grant allocation (page 53 of the report states “Further, if EPA is proposing to change State allocation formulas for the distribution of appropriated funds, then EPA should include such proposals in the Congressional justification”); ozone provisions (page 136 of the bill); Energy Star and permit effectiveness funding (page 56 of the report); geographic programs (page 57 of the report for the narrative and page 155 for a chart); DERA and Targeted Airshed Grants (page 65 of the report for the narrative and page 159 for the chart); and State and Local Air Grants (page 160 of the report for the chart).  For further information:  https://appropriations.house.gov/uploadedfiles/23918.pdf (EPA section begins on page 52 and the EPA charts begin on page 153), https://appropriations.house.gov/uploadedfiles/fy18_interior_xml.pdf  and http://www.4cleanair.org/sites/default/files/Documents/EPA_Memo_on_House_App_Mark-up-2017-07-19.pdf.

May 25, 2017 – NACAA has submitted testimony to the House and Senate Appropriations Subcommittees on Interior, Environment, and Related Agencies expressing opposition to the Administration’s proposed FY 2018 budget cuts in grants to state and local air pollution control agencies under Sections 103 and 105 of the Clean Air Act.  The proposed budget called for, among other things, a 30-percent reduction in state and local air grants (from $227.8 million in FY 2017 to $159.5 million in FY 2018).  NACAA requested that Congress, at a minimum, continue to fund state and local air grants at least year’s level.  NACAA reported that state and local air agencies would have difficulty accommodating any cuts, especially of the magnitude being proposed.  The reductions would impede their ability to continue essential programs, some of which would have to be reduced or eliminated.  The testimony reported on the responses to NACAA’s recent survey of its membership (see related article) and described some of the adverse impacts that individual agencies could expect to see if the grant reductions are enacted.  NACAA also requested that grant funds for fine particulate matter monitoring remain under Section 103 authority, where matching funds are not required, rather than being shifted to Section 105 authority.

May 23, 2017 – President Trump released the FY 2018 budget request for the federal government, including EPA, calling for a 30-percent cut in federal grants to state and local air pollution control agencies under Sections 103 and 105 of the Clean Air Act – from $227.785 million in FY 2017 to $159.450 million in FY 2018.  The budget would reduce EPA’s total budget by 31 percent (from $8.2 billion in FY 2017 to $5.7 billion in FY 2018) and would decrease EPA’s staffing levels by 25 percent (from 15,416 full-time equivalents to 11,611).  The proposal also includes reduction of the Diesel Emission Reduction Act (DERA) grants by 80 percent (from $50 million in FY 2017 to $10 million in FY 2018); elimination of the Targeted Airshed grant program ($20 million in FY 2017) and the Multipurpose Grant program ($21 million in FY 2017); elimination of funding for a dozen geographic programs including those for the Chesapeake Bay, Great Lakes and Puget Sound; reduction of EPA’s Science and Technology Budget by 39 percent (from $733 million to $451 million) and a decrease in EPA’s Environmental Program and Management budget (i.e., the agency’s overall operating budget) by 35 percent (from $2.6 billion to $1.7 billion). The budget will now be sent to Congress for consideration and enactment of appropriations legislation.  Budget details are available on several webpages:  EPA’s Budget in Brief, EPA excerpt from the full budget and the White House’s FY 2018 budget website.

May 22, 2017 – NACAA has prepared a report describing the adverse impacts on state and local air quality programs of the Administration’s proposed reductions of 30 percent in FY 2018 federal grants to those agencies.  The report, which is based on a survey of NACAA members, is entitled, Impacts of Proposed FY 2018 Budget Cuts on State and Local Air Quality Agencies.  The report reflects input from 31 state and local air quality agencies and presents a dismal picture of the effects of such cuts, with agencies outlining the devastating impact on their efforts to provide healthful air quality for the American public.  Respondents indicated that their programs could face severe curtailments, including loss of staff, cancellation of activities, return of program elements to EPA and a diminished capacity to obtain and maintain healthful air quality.

May 19, 2017 – A document prepared by the Administration shows that the Fiscal Year (FY) 2018 budget request President Trump is expected to release on Tuesday, May 23, 2017, will include a 30-percent cut in federal grants to state and local air pollution control agencies under sections 103 and 105 of the Clean Air Act – from $227.785 million in FY 2017 to $159.450 million in FY 2018. NACAA has published a set of tables that contain information taken directly from an Administration document detailing the FY 2018 budget request for EPA. Other notable components of the anticipated budget request are a 31-percent cut in EPA’s overall budget, a 39-percent cut in EPA’s Science and Technology budget, a 35-percent cut in EPA’s Environmental Program and Management budget (i.e., the agency’s overall operating budget) and the elimination of funding for a dozen geographic programs including those for the Chesapeake Bay, Great Lakes and Puget Sound. The President also seeks to cut the Diesel Emission Reduction Grant Program by 80 percent, from $49.9 million in FY 2017 to $10 million in FY 2018, and to zero out Targeted Airshed Grants.

April 3, 2017 – An EPA memorandum (dated March 21, 2017) providing information about the Administration’s upcoming FY 2018 budget proposal has become public, providing specific details that have heretofore been unavailable about the implications of the Administration’s “Budget Blueprint” released on March 16, 2017.  The latest information indicates that air grants (under Sections 103/105 of the Clean Air Act) would be reduced by 31 percent from FY 2016 levels (FY 2017 levels are currently very similar to FY 2016 levels, due to the Continuing Resolution under which the federal government is operating).  This means that grants would go from $228.2 million in FY 2016 to $159.5 million in FY 2018.  Previous information indicated cuts of 45 percent were being proposed for categorical grants (e.g., air, water, solid waste grants), but did not break down the information by media.   This provides greater specificity related to individual media grants, including air.  With respect to EPA’s overall budget, the agency would experience a 31-percent reduction in funding, to $5.7 billion, and a reduction of 24.9 percent in staffing levels, for a total of 11,548 full-time equivalents.  Under the proposal, the Diesel Emission Reduction Act (DERA) grants would be reduced from $50 million in FY 2016 to $15 million, the Targeted Airshed grants would be eliminated ($20 million in FY 2016) and the Multipurpose Grants would be eliminated ($21 million in FY 2016).  The figures in the memorandum differ in certain respects from preliminary data NACAA had obtained from an Office of Management and Budget document on February 28, 2017).

March 27, 2017 – NACAA sent a letter to the House and Senate leadership of the Appropriations Subcommittees on Interior, Environment, and Related Agencies expressing the association’s deep concern about the significant reductions to the FY 2018 budget for EPA that are proposed in the Administration’s Budget Blueprint that was released on March 16, 2017.  The letter notes that the possible reductions of 45 percent to state and local air grants under Sections 103 and 105 of the Clean Air Act would be devastating to state and local air quality programs.  State and local air quality agencies already struggle with insufficient resources and increased responsibilities.  They rely on federal grants for a host of critical programs.  Any cuts to those grants would be hard to accommodate, but the steep proposed cuts in the Budget Blueprint could result in significant adverse impacts to their programs and to public health and the environment.  Additionally, NACAA’s letter discussed the fact that state and local agencies must rely on EPA to carry out its responsibilities in assisting state and local air programs.  Therefore, it is vitally important that EPA be adequately funded as well.  NACAA sent the letter to Senators Lisa Murkowski (R-AK) and Tom Udall (D-NM), Chair and Ranking Member, respectively, of the Senate Appropriations Committee on Interior, Environment, and Related Agencies and Reps. Ken Calvert (R-CA) and Betty McCollum (D-MN), Chair and Ranking Member, respectively, of the House Appropriations Committee on Interior, Environment, and Related Agencies.