DENR budget boost a far cry from pre-recession funding

Posted June 11, 2014

John Skvarla, secretary of the Department of Environmental and Natural Resources, listens to Gov. Pat McCrory speak at a news conference at the governor's mansion on Jan. 21, 2014. (Kelly Hinchcliffe/WRAL)

— If budget proposals from the governor and both chambers of the General Assembly are any indication, the state's environmental regulator will see a funding boost for the second straight year heading into July. 

But no matter what the final budget version shows when lawmakers emerge from their committees over the coming days, state funding for the Department of Environment and Natural Resources won't come close to what it's lost since 2008.

North Carolina's recession-plagued economy, coupled with a distinct policy shift from the General Assembly's new Republican majority, drastically reduced the state's contributions to the agency. To lawmakers and others who have long advocated for a leaner environmental regulator, the budgetary changes have led to increased efficiency and common-sense reorganization.

But environmental advocates say the cuts, which at one point reduced state funding for DENR by nearly half, have diminished the ability of the agency to prevent environmental disasters and keep natural resources safe. As proof, they point to political leaders' new efforts to restore regulator positions shed over the years – measures present in all three budget plans to deal with the February coal ash spill.

"These proposals for new positions indicate people think there aren't enough bodies out there to do what needs to be done on coal ash," said environmental lawyer Robin Smith, who worked as DENR's assistant secretary for the environment from 1999 to 2012.

Boom and bust

State appropriations for the N.C. Department of Environment and Natural Resources peaked in 2007 in the waning days of the Easley administration. The agency's budget took a hit during the recession, but major cuts came in 2011, when the GOP gained a majority in the General Assembly. Click and drag the cursor over the graph to zoom in, or double click to reset.

Source: NCGA Fiscal Research

To Steve Wall, a policy research associate at the University of North Carolina at Chapel Hill's Institute for the Environment, the coal ash measures look familiar despite the change in leadership.

Whether it's responding to issues such as hog waste, drinking water contamination or the more recent coal ash spill into the Dan River, he said political leaders respond to big problems only when they come to a head.

DENR Watch

An occasional series on the evolution of the state’s role in protecting natural resources while promoting business growth.

"The [General Assembly’s] response to adding positions for coal ash seems fairly consistent with the actions over the last 10 years of state leadership in adding environmental positions when an environmental problem is identified," Wall said in an email.

Grady McCallie, policy director for the North Carolina Conservation Network, said that's a problem because these budget increases aren't focused on long-term solutions.

"What the budget is really about is having state government be effective across the board at doing the job we ask them to do," McCallie said. "That doesn't mean just responding to the crisis of the day."

With reorganization comes reduction 

For most of the time Wall worked as one of DENR's chief policy analysts in the mid-2000s, budget bills were good to the agency.

Democratic leaders during that period pushed the growth of divisions focused on coastal habitat protection, private well water quality and a range of other environmental programs.

"The focus on environmental programs and what was happening in the state was moving things in the right direction and creating a good quality of life," Wall said.

But not everyone agreed with the trajectory of that growth. Republicans, then the minority, were concerned that expanding and unnecessary regulations were strangling business development.

When North Carolina voters made them the majority party in both the House and Senate in 2011, GOP leaders moved quickly to rein in what they saw as overreach.

State funding for the agency in 2011 dipped by about 15 percent, even after two years of recession-era budget cuts. In addition to less operating funding, many of these cuts came from wholesale transfers of divisions that had been in DENR's organizational structure.

"What started happening in 2011 was really different," Smith said. "At that point, the economy was starting to recover, but there was this round of reorganizations, many of which the department itself opposed." 

That included the transfer of Forest Resources and Soil and Water Conservation, which both moved into the Department of Agriculture and Consumer Services. The reorganization reduced DENR's budget by $50.5 million in 2012.

Wall said the reorganizations had the practical effect of stripping away missions that didn't directly tie into regulation.

"Soil and Water was doing technical assistance and helping farmers," Wall said. "Now, the department doesn't have that purpose or existence. It changes the dynamic."

When Republican Gov. Pat McCrory took office in 2013, state funding did begin to change course, ticking up 40 percent. But DENR officials point out this was largely due to a technical change by legislators.

Instead of drawing revenue directly from large environmental trust funds, the legislature opted to route that money through the state's General Fund, then back to DENR.

McCallie said that decision can help consolidate spending, but it can also reduce the flexibility of civil servants within the department.

"What they're essentially doing is getting total control of the purse by the legislature. That's a policy choice," McCallie said. "What it has to end up doing is restricting [the agency's] options."

With another fiscal year on the horizon, the governor, House and Senate have all called for more funding for DENR in targeted areas.

Rep. Tom Murry, R-Wake, who chairs the House Appropriations Subcommittee on Natural and Economic Resources, attributed the additional money to lawmakers who are becoming "more and more comfortable with the operations at DENR."

"We're watching them. We're definitely not giving them a blank check by any stretch," Murry said. "But we want to make sure we are properly funding DENR to the level where they can execute regulations to protect our water, protect our air and protect our environment."

Fallout from coal ash extends to budget

For the House's part, those additional resources include about $1.8 million for additional regulators and infrastructure for coal ash enforcement and cleanup. That's marginally higher than the Senate's $1.75 million budget proposal for similar measures.

In both cases, Murry said, lawmakers worked closely with DENR to figure out what the agency needs.

DENR spokesman Drew Elliot attributes that working relationship to the efficiencies Secretary John Skvarla has adopted at the agency since taking the helm under McCrory.

"Part of the secretary’s strategy has been to establish trust with the General Assembly," Elliot said in an email. "When compared with the previous administrations, we have made great strides in proving to legislators that we can effectively manage the department. This, in turn, gives us credibility when we ask for more resources."

Big environmental disasters such as the coal ash spill can force political leaders to reexamine their assumptions, Smith said. That includes lawmakers who targeted DENR divisions such as water quality, which she said experienced much deeper cuts over the years than other regulatory divisions.

"The assumption was that DENR and the water quality program were over-regulating," Smith said. "The coal ash spill in the Dan River certainly doesn't indicate over-regulation."

Although she acknowledged that coal ash facilities had long been under-regulated by Democratic leaders, she said GOP lawmakers seem to be signaling a critical need in some of the same areas they've previously slashed. 

But Murry said the budgetary increases are not an acknowledgement that DENR funding has dropped too low.

"Whenever you have a new administration, you find a new way of doing business," he said. "That breeds efficiencies, and it also illuminates areas where we need to make more investments. That's the process we're working through right now."

After 20 years of running the state's environmental regulator under Democratic control, Murry said Republican lawmakers are working as quickly as they can to make improvements. 

"I think, over the past 18 months, we've found a new way to do things and hopefully make things better, make things more efficient and have better results for the environment," he said. "That's the ultimate bottom line."


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  • Carl Keehn Jun 11, 2014
    user avatar

    View quoted thread

    The Coal Ash "thing" was not a thing until the rupture of a coal ash dump in Tennessee in December of 2008. That served as a national wake up call that these storage facilities were ticking time bombs. At that time the NC Legislature ordered the study of coal ash dumps to determine how to deal with them. About the time that DENR was to release their report, the incoming Legislature in 2011 stripped them of funding and effectiveness.

  • Grand Union Jun 11, 2014

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    Its always funny when todays tea party pretend to forget they are the Democrats (dixiecrats) that were in power when these things were built........A skunk by any other name....................

  • Grand Union Jun 11, 2014

    View quoted thread

    Was DENR ever tasked to prevent or get rid of them? They can only implement State and federal law. And it wasn't the Democrats that stepped in and pretended to sue Duke for pollution just to stop anyone else from successfully that was McCrory protecting his old employer....and he would have likely gotten away with it if the ash pond had not failed and made the national news.............

  • dirtydozen431 Jun 11, 2014

    The Democrats need $4,000.00 extra from each taxpayer to implement their programs. They should create a special account for their constituents to mail the contribution to.

  • notexactly Jun 11, 2014

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    Um the coal ash thing was created on the dems watch!! 100% their watch in fact. So ur spin don't hold any truth as usual. And There are not to many budgets up to where they were before 2008. I know my budget is not and where I work is not either. Some are but not many.

  • notexactly Jun 11, 2014

    View quoted thread

    LIKE WHAT?? I have complained about dems since sleesly came in. I did somewhat like hunt but what was better in your opinion? The money wasted by the dems surely wasn't one of them. They just proved throwing money at something is not the answer to fixing it. That has been proven with the coal ash thing. Need better people to do the job and politicians with the guts to make it happen. That we surely didn't have under the dem rule for so long

  • Maurice Pentico Jr. Jun 11, 2014
    user avatar

    Well you know the benefit of having less funding than in 2009 is that DENR can use this as yet another excuse for allowing bad stuff to happen in NC.

    But apparently a fully funded DENR didnt catch the coal ash problem.. and a host of other regulatory issues like the hog lagoons.

  • dirtydozen431 Jun 11, 2014

    Remember all the Democrats that refused to run and the first female governor that scrammed when they saw this financial disaster coupled with Republican landslide rolling downhill.

  • Joseph Smith Jun 11, 2014
    user avatar

    DENR are useless. A complete waste of $.

  • dirtydozen431 Jun 11, 2014

    Did all the money the Democrats spent on DENR prevent the coal ash ponds.