Fw: State Budget Overview
Bill Sabey
Hi Folks,
As most of you probably know, a state budget and the accompanying code bills were passed late last Thursday. The biggest points of disagreement were mainly around education funding, both higher ed and basic ed while environmental issues were relegated to the back burner. Overall, the budget is what we’ve come to expect over the years: mediocre, timid, and disappointing. Below is an overview of the portions of the budget related to our work.
Dept of Environmental Protection
DEP saw a roughly 10% increase over last year’s budget. This includes:
$10.5 million to fund permitting process/activities initiative. This should result in an increase in staff focusing on permitting at regional offices across the Commonwealth and to upgrade, improve, and modernize permitting IT systems.
$6 million to the Well Plugging Account to support the operation of the DEP Oil & Gas Regulatory Program
$1.5 million for PFAS ‘forever chemical’ testing
$9.9 million transferred to the Environmental Stewardship (Growing Greener) Fund to pay debt service on Growing Greener II bond issue
Even with these increases, this budget is still roughly 10% below the Governor’s funding requests.
Dept of Conservation and Natural Resources
DCNR saw a 15% increase over last year’s budget. This includes:
Using $67.79 million from the Oil & Gas Lease Fund to support DCNR operations, $120.79 million less than in FY 2023-24.
DCNR in-lieu of tax payments are increased from $2.40 to $3 per acre with the increase paid for from State Gaming (Gambling) Funds.
Game and Fish & Boat Commission in-lieu of tax payments increased by the same amount with the increase paid for from State Gaming (Gambling) Funds.
Even with these increases, this budget is nearly 21% below the Governor’s funding requests.
Community Solar
Community Solar did not make it into the budget. House Bill 1842 (Schweyer) is currently in the Senate Consumer Protection and Professional Licensure committee. The bill can still potentially move this Fall, although there is no funding attached to it. Trying to move this forward is still a priority for the Chapter.
Solar for Schools
Solar for Schools is covered in Section 1753.2-E. Commonwealth Financing Authority. Starting in fiscal year 2024-2025, a Solar for Schools project approved by the department shall be an eligible project for the Solar for School Grant Program, which was allocated $25 million. The grants can be used in conjunction with IRS direct pay tax credits. This win can greatly enhance our chapter’s Clean Communities and Community Advocates for Clean Energy programs. This bill was also a trade for Sb 656, which established fees for electric vehicle drivers ($200 in 2025, $250 in 2026, then tied to the Consumer Price Index). The trade was supposed to result in $25 million/year for 10 years, but we were only given $25 million for a year, meaning there will likely be a battle every year to secure additional funding for this program.
Solar for All language
Under Section 1724-H. Department of Environmental Protection: IRA Solar for All: It is stated “No money shall not be encumbered, committed or expended unless authorized by state law on or after the effective date of this section.” We have heard that this is just an annoyance, however, it does have potential implications for the $156 million Solar for All award expected to come to Pennsylvania this fall. The Greenhouse Gas Reduction Fund programs have periods of performance in which funds have to be spent. Additionally, Solar for Schools and community solar, if passed, are relying on these federal funds. The Solar for All program is intended to enable and accelerate low-income residential solar per federal requirements.
Clean Streams Fund
$50 million allocated to the Clean Streams Fund annually.
71.5% to State Conservation Commission
12% to PennVEST
10% to Nutrient Management Fund
4% to DEP for Stormwater Management Grants
0.5% (from 4%) to DCNR for Keystone Tree Restricted Account
2% for Abandoned Mine Drainage Abatement
Whole Home Repairs
Did not receive any funding in this budget. However, this budget did raise the funding cap for PHARE, which is somewhat similar to WHR, from $60million to $100 million. PHARE is meant to assist with the creation, rehabilitation, and support of affordable housing for low to moderate income households.
Cryptocurrency
Cryptocurrency operators had been taking advantage of a tax exemption offered to attract data centers like Google, Meta, etc. This budget prohibits that exemption for crypto.
Waste Coal
The Coal Refuse Energy and Reclamation Tax Credit was increased from $20 million to $55 million annually. The subsidies for this industry are bordering on outrageous at this point.
Electric Vehicle Fees
While not part of the actual budget, this bill was part of the Solar for Schools budget deal. The Senate and House gave final approval to Senate Bill 656 establishing a new tax on electric and plug-in hybrid vehicles that is now on its way to the Governor (detailed above).
SPEED (permit review program)
Streamlining Permits for Economic Expansion and Development Program
Provides the Department of Environmental Protection with staff augmentation by allowing third party review of air permit plan approvals (PA Code Chapter 127), earth disturbance permits (PA Code Chapter 102), and water obstruction and encroachment permits (PA Code Chapter 105).
DEP will issue an RFP to identify qualified professionals and will forward permit applications for review to those professionals upon an applicant’s request.
Once DEP receives the recommendations from the qualified professional, it conducts a final review according to its regulations and procedures and either issues the permit, denies it, or sends a technical deficiency letter to the applicant.
The Program relies on timelines established within the Permit Decision Guarantee Policy which are the same as the timelines in the PAyback program, ranging from 43 business days for an Erosion and Sediment General Permit to 150 business days for a Major Facility Air Plan Approval.
Requires DEP to create a secure tracking system for applications submitted electronically on the department's website (as long as funding is provided).
Carbon Capture and Sequestration (CCS)
Both chambers passed Sb 831, which establishes a framework for regulating the geologic sequestration of carbon dioxide through injection wells. This was not included in the budget but was passed immediately after the budget was voted on.
PA Sites
Pennsylvania Strategic Investments to Enhance Sites Program
Authorizes the Commonwealth to issue bonds up to $500,000,000 for new funding to invest in site development, preparation, and readiness for businesses to locate or expand in Pennsylvania. (No more than 15% of the proceeds shall be used for loans).
Funded by a bond issuance through the Pennsylvania Economic Development Financing Authority (PEDFA), the program will include both grant and loan options, and will be open to private, public, and nonprofit site developers working on both industrial and non‐ industrial economic development sites.
Eligible project uses: property acquisition/demolition/rehabilitation/remediation; infrastructure construction and rehabilitation (water/sewer, electric, etc.); transportation needs (road improvements, rail improvements, port improvements); communications needs (telephone, fiber, wireless, etc.); and administrative and permit costs (limited to 5% of total award).