State environmental department at odds with Legislature on budget future

Piggy bank budget money

Amid the ongoing budget fiasco has strained almost every relationship in Montgomery, you can add another pair of fiscal foes to the list: the Alabama Department of Environmental Management (ADEM) and the state Legislature, particularly the House.

The state governmental institutions are at odds over agency funding and the source and amount of fees collected by ADEM being transferred to the state’s general revenue fund to cover an expanding budget shortfall.

As funding from the state general fund has bottomed out to zero in recent years – or even negative levels, like it’s expected to next year  – at the request of Lance R. LeFleur the Director of ADEM, it has begun to implement a program that would cut their reliance on the state and be completely reliant upon funding from permitting fees granted to agricultural firms and other industry players who must pass muster with ADEM in order to do business with the state.

In other words, the regulators are relying on the regulated for their existence.

While ADEM also receives funding from federal EPA grants and fees levied on Alabamians for certain purchases to mitigate environmental damage, permits held by industrial interests provide by far the bulk of the agency’s budget. The Alabama Environmental Management Commission (EMC) must approve fee increases prior to them changing.

Alabama Environmental Management Commissioner Terry Richardson sees an inherent conflict there.

“We’re being asked to shift the burden of the people to the permit holders, again,” Richardson said earlier this month. “I see an agency whose primary function is to manage the environment for the people of this state, more and more, being funded by the people we’re managing or protecting this environment from.

“I don’t see that as a good situation to get into. It almost seems that it makes us more beholden to these industries and these permit holders,” Richardson continued.

While the Legislature by and large does not see that state of affairs as compromising the agency, ADEM faces a threat in the wake of the cuts nonetheless.

The agency will almost certainly seek permission to raise even more revenue from permit holders when the EMC meets in December, a move that will likely prove unpopular aside from the fact that it may exacerbate ADEM’s dependency on private sector sources.

ADEM permitting fees were raised by 19 percent in 2011,  just raised by 50 percent back in 2013. Some fear that may damage their already-weakened leverage when it comes to dealing with polluters, easement holders and other actors the state agency regulates.

The state’s current budget for FY 2016 – banged out over two contentious Special Sessions in Montgomery which saw Gov. Robert Bentley veto an early version of the plan, and lawmakers nearly overriding the veto right back – contains just $280,000 in appropriations for ADEM. Adding insult to injury, says agency administrators, is a requirement the department pay back into the state’s general fund some $1.2 million the department collected for scrap tire and solid waste disposal.

The situation is stoking fears in Montgomery that the EPA will revoke Alabama’s state water permitting authority, a move Director LeFleur says would be catastrophic.

“EPA taking over the program would have a devastating impact on both attracting new industry and retaining existing industry,” LeFleur said.

LeFleur and Richardson have yet to indicate publicly that such move – called for by environmental activists in years past, who see the state incapable of managing its own land and water – is imminent anytime soon, it is raising what Alabama Environmental Management Vice-Commissioner W. Scott Phillips called “hard questions” about the viability of the agency going forward.

Testimony by Terry Richardson earlier this month at a department meeting summed up the budgetary situation best.

“Are we a critical state agency? Or aren’t we?” Richardson intoned twice during ADEM’s most recent confab. “It doesn’t seem like our colleagues in the Legislature believe that we are.”


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