UMRBA Update

March 2, 2001


Washington News

Corps of Engineers:  President Bush is proposing $3.9 billion in FY 02 for the Corps of Engineers' civil works activities.  This is a 13 percent reduction from FY 01 and 5 percent below the FY 00 level.  According to the overview, the budget proposal "gives priority to projects and programs that provide significant national benefits in the Corps' principal mission areas--commercial navigation, flood damage reduction, and environmental restoration and enhancement."  The budget also focuses on completing current projects rather than new starts and "redirects funds from 2001 congressional add-ons that are inconsistent with established policies."  The President would also provide less funding to study potential new projects, citing a $40 billion backlog of authorized construction projects.  Operation and maintenance spending is focused on busy commercial ports and waterways, redirecting funds from recreational harbors and less used inland waterways.  Funding for the Mississippi River and Tributaries project would focus on "priority flood damage reduction projects," with funds redirected from "ongoing projects that are not economically justified, are environmentally damaging, or violate other established policies."  The Corps' wetland regulatory program would receive an increase.  Noting recent controversy surrounding the Corps' analyses of water resources projects and the Army Inspector General's findings concerning a potential "institutional bias," the Administration is considering possible reforms, "including the need for independent review of Corps planning reports involving controversial or costly projects." 

 

Department of the Interior:  The FY 02 budget for the Interior Department would be $9.8 billion under the President's plan, a 4 percent reduction from FY 01, but 15 percent above the FY 00 level.  Among the President's higher profile spending proposals is $900 million for the Land and Water Conservation Fund (LWCF).  This represents full funding for the LWCF and includes $450 million for state and local conservation grants.  The federal portion of the funding includes $50 million in matching grants for states to establish Landowner Incentive Programs to enhance critical habitat and $10 million for Private Stewardship grants to support private conservation efforts.  In addition, the President is requesting funds to eliminate the National Park Service's deferred maintenance backlog within five years.  While it does not provide details, the blueprint also promises reforms "to better target many U.S. Geological Survey activities" and suggests that these changes will attempt to focus USGS on providing information needed by DOI's land management agencies.  The President's tax plan also includes a 50 percent capital gains tax exclusion for private landowners who willingly sell their property for conservation purposes.

 

Environmental Protection Agency:  President Bush's FY 02 budget includes $7.3 billion for EPA, 6 percent below FY 01 and 4 percent below FY 00.  According to the blueprint, the reduction relative to FY 01 "is almost entirely due to the elimination of unrequested earmarks."  The FY 02 request provides $3.7 billion for EPA's Operating Program, including more than $1 billion for grants to states and tribes to administer environmental programs.  The Administration is also requesting $1.3 billion for the wastewater state revolving fund (SRF) program and wants to direct a portion of these funds to new sewer overflow control grants.  In addition, the budget proposal calls for increased innovation within EPA, including more market-based incentives; recommends increased enforcement grants to states; and emphasizes the need for "better and more appropriate use of information and analysis" to make science-based decisions and measure performance.  The President's tax plan would also extend favorable tax provisions designed to encourage brownfields reclamation.

 

Department of Transportation:  The President is recommending $57.2 billion in FY 02 for the Department of Transportation, 7 percent above FY 01 and 17 percent above FY 00.  This includes $5.1 billion for the Coast Guard, a $545 million increase above FY 01.  The Coast Guard's increase is targeted to operational needs and vessel and aircraft replacement.  However, $243 million of this amount is for equipment to enhance drug interdiction efforts.  As part of "an effort to trim corporate subsidies," the President did not include any new funding for the Title XI Maritime Guarantee Loan Subsidy Program.  In addition, the Maritime Security Program, currently administered by the Maritime Administration, would be transferred to the Defense Department.  President Bush is also recommending new user fees to support federal pipeline and rail inspections. 

 

Federal Emergency Management Agency:  The Federal Emergency Management Agency would receive 2.0 billion in net budgetary authority, 17 percent below the FY 01 level.  The Administration's FEMA budget includes several proposed policy changes.  Among these, the federal share for projects under the Hazard Mitigation Grants Program would be reduced from 75 percent to 50 percent, resulting in an estimated $83 million in savings.  In addition, a phased-in public building insurance requirement would generate an additional $83 million in federal savings.  According to the budget outline, "these changes will help to ensure that States and localities make a significant commitment to preparing for disasters before they happen."  Changes to the National Flood Insurance Program (NFIP) would eliminate subsidized insurance for repetitive loss structures if any new claims are submitted and would phase out subsidized premiums for "vacation homes, rental properties, and other non-primary residences and businesses."  These modifications to the NFIP are estimated to save $12 million in FY 02.  FEMA would also be tasked with developing improved guidelines to govern the federal disaster declaration process, "enabling both the States and the Federal Government to better delineate their respective roles in disaster recovery."

 

Department of Agriculture:  The President's FY 02 budget includes $17.9 billion for the USDA, 4 percent below FY 01's non-disaster-related funding and 5 percent above the FY 00 level.  The blueprint document does not include any specifics for the USDA's conservation programs.  However, it does indicate that President Bush will continue an effort initiated during the previous Bush Administration to reduce the department's county offices.  The conservation programs are generally delivered through these offices.  Noting that "there are still about 5,600 USDA county-level offices serving one million farmers," the budget includes "funds to continue efforts to streamline and modernize USDA's county office structure." 

 

New Bills

 

Committee Action

Jon Craig of the Oklahoma Department of Environmental Quality spoke on behalf of the Association of State and Interstate Water Pollution Control Administrators (ASIWPCA), also decrying the "plethora of rules and policies issued over the past several months [that] significantly affect already overburdened state and local programs."  He called the TMDL workload alone "staggering," estimating that 1.5 TMDLs will need to be approved each work day for the next 10 years by each of the ten EPA regional offices.  Craig also criticized the recent "Water Infrastructure Now "(WIN) report, in which the water industry calls for $15 billion in new spending for water infrastructure.  Craig  described the proposal as "limited in scope," ignoring nonpoint and watershed needs by focusing exclusively on municipal treatment works, duplicative of the "highly effective" Clean Water State Revolving Funds, and inappropriately focused on grants rather than loans.  Craig also registered ASIWPCA's objections to EPA's requirement that states adopt water quality standards for nutrients and waters impaired due to fish advisories, methyl mercury, and sediment.  With regard to funding, the ASIWPCA representative called for increasing Section 106 funding from $172 million to $350 million annually and increasing Section 319 nonpoint pollution funding to $500 million annually, and eventually to $1 billion annually.

 

Other witnesses at the February 28 hearing included Oregon Governor John Kitzhaber, speaking on behalf of the Western Governors' Association and Christophe Tulou of the Environmental Council of the States.  Background and testimony from the hearing are available on the subcommittee web site.

 

Future Committee Schedules

·  Mississippi River Issues---On March 14, the Mississippi River Caucus has scheduled a hearing on flood control needs and will hear from the Upper Mississippi, Illinois, and Missouri Rivers Flood Control Association.  On March 15, the Caucus is scheduled to review issues related to the UMR navigation study and has asked MVD Commander Edwin Arnold, former Rock Island District Commander James Mudd, and representatives of MARC 2000 to address the Inspector General's report and the recently released National Academy of Sciences study.

 

River Basin News

Economics--The committee found that the Corps' spatial equilibrium model, which was developed to forecast barge traffic, "represents a major advance over previous economic models" and recommended that it "be used as a foundation for the feasibility study."  However, the committee judged the assumptions and data used as input to the models to be flawed.  In addition, the committee criticized the lack of consideration of nonstructural options for decreasing waterway congestion, recommending that lock extensions not be pursued until nonstructural approaches such as better scheduling, tradable lockage permits, and congestion fees are fully assessed.

 

Inland Waterway and Water Resources System Planning--The committee found that the study lacks a comprehensive assessment of how changes in navigation might affect economic, environmental, and social systems.  In particular, the committee recommended that the economic implications of environmental impacts from barge traffic be considered.  Although acknowledging that the Corps has conducted many environmental investigations as part of the navigation study, the committee concluded that "it is not clear how these environmental studies are incorporated into the decision regarding lock extensions."  Given the complexity and cost of the study, the committee also called for an independent review of the final study by an interdisciplinary group of experts from outside the Corps.  Finally, the committee determined that the comprehensive planning framework contained in the Principles and Guidelines is not reflected in the study and that "environmental improvements--not just the mitigation of incremental environmental damages--should be examined as part of the navigation feasibility study."

 

Environment--The committee recommended systemwide research on the cumulative ecological effects of the existing navigation system, environmental effects of recent navigation system improvements, cumulative effects of increased tow passage, and site-specific effects of future construction activities.  However, the committee recommended that "this research not be shouldered by the Corps alone" and suggests that the Environmental Management Program (EMP) research effort be enhanced "to improve assessment of the current navigation system's cumulative effects on the environment and broadened to include studies of the impacts of barge traffic on ecology."  The committee also calls for the Corps to conduct its navigation feasibility study based on the principles of adaptive management, but faults the "adaptive mitigation" strategy described in the study for treating the environment "as a planning constraint rather than as a resource on par with waterway infrastructure investments."

 

Engineering--The committee found that the Corps' estimates of the savings that would be achieved if rehabilitation of aging locks was not necessary are "sensible."  However, the Corps' 25 percent construction cost contingency was judged by the committee to be too low.

 

The committee emphasized that the Corps has not yet completed its study and thus the committee's review focused on a July 2000 draft.  The committee also acknowledges that some of its recommendations will require "sustained and significant resources" and that the Corps may not be able to unilaterally implement them, given that Congressional action may be necessary.  The committee's report is available at the National Academy Press web site.


For more information regarding Congressional action and links to related sites, visit http://thomas.loc.gov/.

 
The UMRBA Update is produced by the staff of the Upper Mississippi River Basin Association, an organization formed by the Governors of Illinois, Iowa, Minnesota, Missouri, and Wisconsin to represent the states' common water resource interests.  Questions and comments may be directed to bnaramore@umrba.org.