January 11, 2000
By Bill Patterson
On February 14, 1996 an article, "Officials Fear EPA Takeover In Alabama," appeared in The Wall Street Journal. The business daily reported that EPA, worried about the Alabama Department of Environmental Management's water quality program, was considering whether "to take over part of the state environmental department's job." The article noted that Alabama's water quality program ranked low in inspectors per water-discharge site, water testing and budget.
Since 1996, despite national publicity and scrutiny by EPA, the Alabama legislature has appropriated less and less money for ADEM. Apparently, after years of inadequate funding, the agency has reached a crisis. In November, ADEM's director, James Warr, sent a letter to a mailing list that included state environmental activists that pointed to inadequate state funds, suggesting that a lack of funds threatens ADEM. According to Warr, appropriations from the General Fund for the agency have dropped from $5,600,000 in fiscal year 1991 to $4,000,000 in fiscal year 2000. He wrote: "The implications of a gradual decline over the last nine years while new initiatives and demands have grown is obvious."
The Harbinger spoke last week with Marilyn Elliott, the Deputy Director of ADEM, about Warr's letter. Elliott, the top merit system official at the environmental agency, is responsible for day-to-day operations of ADEM. Elliott said the agency had sent out the letter to increase public awareness and explain "historically why the agency had not asked for additional funds." She said that the ADEM Director wanted to protect funding for ADEM's "base programs," the programs needed to maintain a staff and infrastructure. Elliott pointed to three causes of ADEM's budget pressures: reductions from the General Fund, level federal funds for base programs and level permit fees. Elliott said that the "leaders of the agency would be remiss" if they did not seek additional money. She indicated that in the fiscal year 2001, if the General Fund appropriation was not increased, ADEM would do fewer inspections, take more time to issue permits and deliver its services in "a less timely manner."
Congress requires that all states must enforce environmental standards that meet or exceed EPA standards. An ADEM document states how the Alabama agency met this obligation: "ADEM assumed these responsibilities only after demonstration that state laws and regulations are at least equivalent to federal standards and that the state has matching funds and personnel available to administer the programs." EPA has a duty to take over ADEM if the state legislature fails to raise an adequate budget. ADEM's Elliott declared that, within the next two years, the agency will "no longer function without additional funds."
ADEM's funding is drawn from three sources: the state's General Fund, ADEM fees and fines, and federal funds. From 1991 to 1999, according to figures provided by ADEM, the agency's budget increased from $20,263,307 to $34,399,157 -- see table. As the General Funds have dropped, ADEM fees have become increasingly important. But Elliott said ADEM fees had not kept pace with the agency's needs. Presently the Alabama legislature only allows ADEM to collect a fee for processing a permit. The agency's fines are not a significant or stable source of budget revenue, Elliott says, because ADEM does not keep the fines it levies, only what it spent to collect the fine. Most of the fines go directly into the state's General Fund and are spent on programs other than environmental protection.
As in 1996, the main problem at ADEM today is in its water quality program. Elliott said for the last four or five years the federal government has criticized its water program. She said the federal agency had noted, during its mid-year and year-end reviews, that ADEM's water program did not have adequate funding nor adequate staff. She said that federal officials warned, through "hints," that they might take over the water program. "The federal Government could do that" she said. Elliott believes that the state's program is not in danger of a takeover in 2000 or 2001, but could be later.
On November 4, The Harbinger talked with Doug Mundrick, the director of the EPA's Surface Water Permits and Facilities Branch in Atlanta. According to Mundrick, while EPA does not question ADEM's authority to administer its water quality program, the state agency faces a "permit backlog" and a diminished "enforcement capability" because of funding problems. Mundrick believes the main reason for Alabama's dilemma is that Congress greatly increased the responsibilities of federal, and thus state, water quality agencies during the 1990s. He says Congress has forced the nation's environmental regulators to issue tougher storm water permits, regulate animal waste disposal and increase water quality monitoring.
Asked why he thought ADEM sent out a letter about the General Fund appropriation, Mundrick said that "Jim Warr has real concerns about loss of efficiency" at ADEM. The EPA official suggested that Warr is responding to "pressure from business leaders" who fear a "permit backlog" will stop companies from opening businesses in Alabama. Mundrick pointed to Mississippi as a state with a funding problem so severe that the EPA nearly took over the water quality division of the state's Department of Environmental Quality in the mid-1990s. "Four or five years ago funding in Mississippi was way down," he said, "then the EPA administrator went to Mississippi and had a 'heart-to-heart' with the legislators." Subsequently the legislature came up with increased funds for the state's water program and the EPA relented.
In July 1995 the Legal Environmental Assistance Foundation, together with the Alabama Sierra Club and Alabama Citizen Action, petitioned the EPA to force it to take over portions of ADEM's water program, a petition that is still pending. The Harbinger spoke last week with David Ludder, General Counsel for LEAF, about the Warr letter and ADEM's budget. Ludder noted that, while the 1995 LEAF petition "did not relate to funding," he believed it was "extremely significant" that the ADEM director had sent out the appeal for more money.
Ludder worries most that "the control of purse strings and policies" at ADEM is in the hands of interests unfriendly to environmental protection. He indicated that ADEM officials have difficulty implementing the agency's programs because they "face anger in the legislature over every decision." Ludder believes the solution to ADEM's funding problem is an increase in its fees, a revenue source he believes would free the agency from political pressure. "If ADEM established fees at appropriate levels it wouldn't need General Funds," he said. Ludder believes this could be done if the Alabama legislature amended the Alabama Code to allow ADEM to collect fees to cover the expenses not only of processing its permits, but also of administering and enforcing them.
Ludder doubted legislators would appropriate more money for ADEM: "The Alabama legislature has not been responsive on environmental issues." He said that he, together with the Alabama Rivers Alliance, "will look at the agency's funding over the next year" and possibly petition to lift ADEM's administration of the water quality programs.
Brad McLane of the Alabama Rivers Alliance, an organization that has taken legal action against ADEM in the past, told The Harbinger that his group was examining the ADEM budget. "It's a distinct possibility that the Alabama Rivers Alliance would file a petition in the next year" to force EPA and ADEM to bolster funds for Alabama's water quality program, he said. "Unfortunately in Alabama we don't solve problems until there is a crisis," McLane noted, adding he hopes his group can "manufacture a crisis" that would force the state to improve water quality enforcement. McLane believes that, if EPA took over ADEM water quality programs, "industries and cities would have to go to Atlanta and Washington to get permits." He thinks just the threat of an EPA takeover would cause the legislature to increase funds for ADEM.