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Debate rages over new rules for TMDLs
As talk of TMDLs turns into action, here's what you should know
Most streams, many wetlands could lose protection
Calling the Chesapeake an imperiled national treasure, a panel of political and business leaders is calling for the federal and state governments to establish a $15 billion Bay cleanup fund to help meet the region’s restoration goals.
The Blue Ribbon Finance Panel said the Chesapeake restoration effort has long suffered from underfunding and that without a major “bold” investment, backed by a permanent funding base, cleanup goals would not meet the Bay Program’s 2010 deadline—if ever.
“To save the Chesapeake, we must act now and act boldly,” former Virginia Gov. Gerald Baliles wrote in the panel’s final report, which was issued in late October. “A major financial investment is needed, coupled with improved coordination of the restoration effort on a watershedwide scale.”
To provide that coordination, the panel recommended that a new regional financing authority be established to make loans and grants to the “best” nutrient and sediment control projects available, regardless of geography. The panel called for the federal government to pay a total of $12 billion into the finance authority, and the states $3 billion, from 2005 through 2010.
The panel’s report said that failure to act now could doom the Bay because “time is not on our side.” It noted that more than 100 acres of forest—the most beneficial land use from a Bay health perspective—are being lost daily, while 100,000 people a year move into the watershed, adding more pressure to its resources.
The panel’s report said that “with each passing year, population growth and development in the watershed make it more difficult and thus more and more expensive to protect Bay water quality. Financially, it is wise to make this investment in the Bay now.”
The panel further noted that a court-approved deadline makes it essential for the state-federal Bay Program to meet its 2010 deadline or risk potentially restrictive regulations for failing to remove the Chesapeake from the EPA’s list of “impaired” waters.
“Legally, it would be imprudent to ignore the consequences that would flow from failure to make the investment,” the panel’s report said.
The Chesapeake Executive Council called for the panel last December, after saying Bay restoration goals could not be met without new funding. The 15-member panel was appointed earlier this year by the governors of all six states in the watershed—Delaware, Maryland, New York, Pennsylvania, Virginia and West Virginia—the mayor of the District of Columbia, the EPA administrator and the chair of the Chesapeake Bay Commission.
In addition to Baliles, the panel included other high-profile members such as former Interior Secretary Bruce Babbitt; Jim Perdue, chairman of the Board of Perdue Farms Inc.; and Will Baker, president of the Chesapeake Bay Foundation.
The panel’s report goes to the Executive Council, which is set to meet in December. “It is certainly our hope, if not expectation, that the Executive Council would be in a position to indicate the course that it intends to pursue,” Baliles said in an interview.
The Executive Council is the top policy-making body for the 21-year-old Bay Program partnership. It includes the governors of Maryland, Virginia and Pennsylvania; the District of Columbia mayor; the EPA administrator; and the chair of the Chesapeake Bay Commission, which represents state legislatures.
The Bay Program last year set sharp nutrient reduction goals, which are needed to help the Chesapeake achieve water quality standards that would protect fish, shellfish and important habitats within the nation’s largest estuary.
Nutrients and sediment foul the water, killing underwater Bay grasses that provide food and shelter for a host of creatures. Nutrients also fuel algae blooms that lead to huge summertime oxygen-starved “dead zones” in the Bay.
To meet the goals, all of the states within the watershed have been developing river-specific cleanup plans, known as tributary strategies. But paying for the strategy implementation has emerged as a huge impediment. As strategies have been developed over the past year and a half, the estimated cost of the cleanup—once pegged at about $11 billion—has mushroomed.
The latest estimates for fully implementing tributary strategies has grown to about $28 billion in up-front capital costs and an additional $2.7 billion in costs that recur each year, such as the operation and maintenance of wastewater treatment plants and annual payments to farmers for conservation practices.
The panel cast doubt about those estimates, saying they were often developed without cost-effectiveness in mind. Further, the panel said the tributary strategies included many activities that were already required by regulations, or which primarily benefited local water quality, not the Bay.
As a result, the panel reached a consensus that $15 billion should be targeted to help fund efforts that would primarily benefit Bay water quality, especially upgrades at wastewater treatment plants and the implementation of runoff control practices at farms across the watershed, which the panel identified as “the most cost-effective” cleanup actions.
That would leave a more modest amount of funding for retrofitting stormwater controls in old urban areas and upgrading septic systems, the least cost-effective actions in the tributary strategies.
According to Bay Program estimates, the implementation of agricultural controls and wastewater treatment plant upgrades would achieve 84 percent of the nitrogen reductions in the tributary strategies, at 30 percent of the total $28 billion capital costs. By contrast, controlling nitrogen from septic systems and urban runoff achieves 16 percent of the nitrogen reductions, but accounts for 70 percent of the projected costs.
The panel acknowledged that some of the more costly nutrient control tactics may be needed to meet the goals, but added that technological innovations and initiatives, such as nutrient trading, may provide better ways to achieve cleanup goals. Further, it said the tributary strategies are “state specific and do not incorporate the benefits of interstate and collective action.”
That would change if the panel’s financing authority were adopted. The authority is patterned after the EPA Clean Water State Revolving Loan Fund (SRF) which provides low-cost loans for infrastructure improvements, such as wastewater treatment plant upgrades.
Like the SRF, the panel calls for an 80 percent federal, 20 percent state funding match to capitalize the $15 billion that would be overseen by the financing authority.
Unlike the SRF, the authority would not only make loans, but also outright grants for projects that benefit the Bay cleanup effort. The panel said it was unlikely that farmers and cash-strapped urban areas were likely to embrace the program if it relies solely on revolving loans.
The authority would be governed by a board that included representatives from the EPA, each state in the watershed, the Chesapeake Bay Commission, the environmental community and stakeholder groups such as agriculture, business and wastewater treatment plant officials.
It would seek to fund projects based on cost-effectiveness and innovation, not geography.
While the panel provided the conceptual framework for the authority, many details would have to be fleshed out—such as determining the share each state would have to pay. But it said the authority should be established no later than Jan. 1, 2007.
In the interim, it said the states should build a voluntary funding coalition that could receive state and federal funds and pay for high-priority projects.
In addition to the up-front $15 billion to capitalize the fund, the panel said the states needed to establish sustainable, dedicated financing mechanisms, such as sewer and septic surcharges, to ensure the long-term maintenance of the finance authority. The panel said the states could keep a portion of those funds to support state and local cleanup efforts.
To pay its $12 billion share of the finance authority, the panel calls for Congress to provide $1 billion next year, with the annual payments increasing to $2.5 billion in 2009 and 2010.
The outlook for such a large chunk of federal money is uncertain. It would require Congress to provide more money to the Chesapeake region for several years than the $1.3 billion it provides to the entire nation under the EPA’s State Revolving Loan Fund.
In 2003, all six U.S. senators from Pennsylvania, Maryland and Virginia wrote President George Bush requesting $1 billion a year in federal spending on the Bay, with no success.
Baliles acknowledged that the cost “is a difficult number to grasp.”
“It’s a case of sticker shock,” he said. “But after the shock of the sticker price wears off, one realizes that you either do something, or you don’t regardless of the cost. In this case, the Bay’s condition, if understood by the public, will make it easier for the states and the federal government to secure the support that’s required to finance the cleanup costs.”
The report, summary of recommendations, additional background information, and panel member biographies are available at www.chesapeakebay.net/blueribbon.htm
- Blue Ribbon Finance Panel Funding & Tax Policy Recommendations
- Bay state voters overwhelmingly willing to pay for Bay cleanup
