United States: The Federal Funding Cut To The Chesapeake Bay Cleanup Program Will Have Potential Environmental And Economic Impacts

Last Updated: April 7 2017
Article by Van P. Hilderbrand Jr

In our previous post entitled "EPA's Budget was Cut How Much? Making Sense of the White House's 'Budget Blueprint to Make America Great Again,'" we discussed the White House's proposed fiscal year 2018 budget outline for the federal government, including spending at the Environmental Protection Agency ("EPA"). One line item in the proposal that affects a large portion of the nation, and the mid-Atlantic region in particular, is the proposed funding cuts to the Chesapeake Bay cleanup program. Since many of our clients call this region home and because this proposal will have potential economic impacts, we wanted to highlight them here.

The Chesapeake Bay watershed, at roughly 64,000 square miles, has a wide reach, stretching as far north as New York and running through Delaware, Maryland, Pennsylvania, Virginia, West Virginia, and the District of Columbia as it makes its way to the Atlantic Ocean. It contains 50 major rivers and streams and is utilized in some fashion by seventeen million people who live within its influence. In addition to sustaining native habitat and fisheries, the Bay supports commercial industry in all its bordering jurisdictions, including fishing and crabbing, tourism, commerce, agriculture, and manufacturing. According to the Chesapeake Bay Foundation's ("CBF") 2016 State of Bay report card, the Bay is the healthiest it's been in years.

EPA Serves a Coordinating Role and Federal Funds Help Vital Water Quality Projects

The White House's budget proposal doesn't just reduce the program's FY 2017 budget of $73 million; it eliminates all funding for FY 2018. This means that no EPA resources or staff will be dedicated to work with watershed stakeholders. But how important is EPA's role? Will the progress of the Bay's cleanup be threatened if funding is eliminated?

In 2010, EPA established total maximum daily loads or TMDLs for nutrients (nitrogen and phosphorus) and sediment in the Bay watershed. TMDLs are the amount of pollutants a body of water can handle and still be able to support beneficial uses such as aquatic life, fishing, drinking water, and recreation. To achieve what many call this "pollution diet," EPA mandated a goal for each of the six participating states and the District of Columbia to achieve reductions by 2025. Although these limits were set as a result of a lawsuit against EPA, the federal agency has been a driving force in the cleanup. These jurisdictions and EPA signed the Chesapeake Bay Watershed Agreement on June 16, 2014 to set further goals and to track the watershed's restoration progress.

In a press release published shortly after the budget was proposed, CBF noted that EPA plays an essential role in coordinating the cleanup and monitoring efforts across the Bay watershed. According to CBF, "[t]he EPA's role in this cleanup is nothing less than fundamental. It's not just important, it is critical." Moreover, "there is a very real chance that if this budget were implemented, the Bay will revert back to a national disgrace with deteriorating water quality, unhealthy fish and shellfish, and water borne diseases that pose a real threat to human health." From an environmental and economic perspective, this would be a tragedy. For industry and businesses whose own commercial viability and health is tied to the health of the Bay, this is a grave concern. Especially so if the region doesn't fully realize a $130 billion economic boon that many believe will come in the next 10 years with a restored Bay watershed.

Without EPA's oversight and coordination, there is a possibility that the goals established in the Watershed Agreement may not be met and water pollutants will again go unchecked. This is due to the fact that the states have no authority over one another and EPA has served to push lagging states toward their goals. Yet, lack of oversight is just one worry. A majority of EPA's funding appropriated for the Bay cleanup flows directly to the individual states for grants to fund projects focused on improving water quality, such as upgrading deteriorating waste water treatment infrastructure and controlling chemical runoff, and habitat restoration. Thus, many of the programs to be implemented through the watershed implementation plans in Maryland and in other states will be impacted. If the crucial restoration efforts are to continue, that money will have to come from individual state budgets, which will be problematic as states face their own resource constraints.

For some industry groups, the budget cuts may be welcomed. After EPA established the TMDLs for the watershed, several agricultural and development groups and numerous states, none of which later signed the Watershed Agreement, challenged the standards in federal court arguing Clean Water Act overreach and that the approach infringed on states' rights to manage their own waters and make decisions with regards to land use. A federal district court judge and an appellate court panel sided with EPA. Facing a potential 4-4 split on the issue after the death of Justice Antonin Scalia, the U.S. Supreme Court declined to hear the case, leaving the appellate decision as law. Although the watershed TMDLs will stay in place for the time being, without federal funding and EPA involvement, it is conceivable that states will find it difficult to maintain enforcement and monitoring of these goals.

Cuts to the Bay Cleanup Program Have Been Opposed by Many Local Stakeholders

There has already been an outpouring of disagreement with the budget proposal among environmental and conservation groups, and state lawmakers, including Maryland and Virginia Congressional representatives. Virginia Governor Terry McAuliffe, a Democrat, has opposed the proposed budget. Further, Democratic leaders in the Maryland General Assembly introduced a resolution on Thursday, March 23 that calls on Republican Governor Larry Hogan to oppose the proposed cuts in federal funding. In response, a spokeswoman for the governor reiterated that Gov. Hogan "has already made it clear he will always fight for the Chesapeake Bay and that he opposes hypothetical cuts at the federal level." As the budget proposal gets more detailed over the next few weeks, we expect many more stakeholders and states will voice their opposition to the elimination of this imperative program.

Keep in mind, as we noted in the last post, the budget outline is just a proposal and not that last word. We will follow this issue and post updates to this blog. Please check back.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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