December 4, 2019. The 2019 legislative session was distinguished by its slow pace and lack of movement on significant legislation until very late in the session. The session finally ended in late October — and then reconvened to take up redistricting.
The session failed to produce a comprehensive two-year budget. Governor Cooper vetoed the budget bill passed by the two chambers (H 966). Although the House voted to override the veto, the Senate has not taken an override vote. In the absence of a comprehensive budget bill, the legislature adopted several smaller appropriation bills to provide continued funding for state agencies. House Bill 111 (Session Law 2019-242) provided base-budget funding for a number of state agencies, including the Department of Environmental Quality (DEQ).
The irregular budget process means fewer details on spending; the appropriations bills generally focus on top-line numbers. There is no equivalent of the joint appropriations committee report that always accompanies the budget bill to provide detailed information on funding/staff changes at the program level.
DEQ Top Line Budget Numbers: The table below compares 2018 budget numbers for DEQ to the funding included in H 111 for the 2019-200 fiscal year. Note: “Receipts” includes both fees and grant funding. “Appropriated” funds represent monies allocated to DEQ by the legislature from the state’s general fund for the 2019-2020 fiscal year; that figure can include both continuing program funding and one-time appropriations for a specific purpose.
| Receipts | Appropriated | Total |
| 2018: $154,234,668 | 2018 $95,647,490 | 2018: $249,882,158 |
| 2019: $114,576,705 | 2019: $114,576,705 | 2019: $193,918,082 |
| (-$39,657,963) | (-$16,306,113) | (-$55,964,076) |
The figures show an overall reduction of $55, 964,076 in funding for DEQ programs by comparison to 2018 numbers — around 20%. The reduction reflects a $39,657,963 reduction in receipts and a reduction of $16,306,113 in state appropriated funding. The level of funding also falls nearly $20 million short of the funding provided in the vetoed budget bill.
The drop in receipts likely reflects in part the normal timing of grant cycles rather than an unusual reduction in funding. Otherwise, the fact that H 111 only funds the “base budget” — the cost of maintaining current funding levels for ongoing operations — accounts for the difference. As a continuation budget, H 111 appropriated no new money on either a one-time or continuing basis.
Additional Appropriations. Several other bills include additional appropriations for particular purposes, many related to disaster relief.
Senate Bill 429 (Disaster Recovery) appropriates $8 million to DEQ for disaster-related water and wastewater infrastructure projects, cleanup, coastal management planning and dam safety activities. Another $11.5 million will go into DEQ’s Coastal Storm Mitigation Fund to offset the cost of beach and dune restoration projects. A local government can receive up to $2.5 million in project funding and the provision waives local cost sharing.
Other funds appropriated in Senate Bill 429:
$2 million to UNC’s N.C. Policy Collaboratory to study flooding in Eastern North Carolina and measures to increase resiliency in flood-prone communities. The provision requires the Collaboratory to develop a flooding and resiliency implementation plan and report back to the legislature’s Emergency Management Oversight Committee by December 1, 2020.
$1 million to the Wildlife Resources Commission for removal of derelict and abandoned vessels from coastal waters.
$3 million in new funding to DEQ for grants to Surry County for three infrastructure projects. These appropriations do not appear to be disaster-related.)
House Bill 200 (2019 Storm Recovery) includes $17.6 million in state matching funds needed to draw down the next award of federal grants for the Clean Water State Revolving Fund and the Drinking Water Revolving Loan Fund. Those state/federal revolving loan programs provide low and zero-interest loans to local governments for water and wastewater treatment systems.
Off the Table (For Now). The unresolved conflict over House Bill 966 means that several provisions in the budget bill have fallen off the table at least for the time being. House Bill 966 appropriated about $15 million in new money for water/wastewater infrastructure. It also directed infrastructure funding to specific projects — including a $15 million project in King, N.C. and $5.1 million in funding for infrastructure projects in other communities.
H 966 had included another provision redirecting $2 million from a DEQ fund to address contamination associated with poly- and perflourinated (PFAS) compounds such as GenX to a number of unrelated projects. Over $800,000 of the PFAS funding would have been used to extinguish a conservation easement in a Burlington park that had generated mitigation credits for N.C. Department of Transportation projects. (That provision was described in an earlier post.)
For the time being, the new infrastructure funding will not be available and funds in the PFAS Recovery Fund will remain dedicated to that purpose.