Pound-Wise and Penny-Foolish in the Chesapeake Bay

It’s a staple of the right-wing assault on government that “bloated” government programs, like those intended to protect the environment, are a burden to taxpayers. In my home state of Maryland, the numbers demonstrate otherwise. The percentage of taxpayer dollars spent by the Maryland Department of the Environment (MDE) is tiny and getting tinier.  In 2014, less than one-quarter of 1 percent of the state’s general funds were expended by MDE, a 40-percent reduction in this share since 2004.  In fact, MDE’s general fund budget actually shrank between 2004 and 2014 – not just in inflation-adjusted terms, but in absolute terms – even as the state budget increased by more than 60 percent.  

That’s not to suggest that the state abandoned environmental programs. Over this same period, Maryland created several major new revenue streams, including a Chesapeake Bay Restoration Fund, the Chesapeake and Atlantic Coastal Bays 2010 Trust Fund, and the local Watershed Protection and Restoration Funds, which provide hundreds of millions of dollars annually to restore the Chesapeake Bay and other waters of the state.  But those funds don’t conduct the sort of regulatory enforcement that MDE is charged with; they’re focused instead mostly on capital projects. Clearly, policymakers in Maryland are interested in funding such capital projects, but appear willing to neglect the need for scientists, engineers, inspectors, and other officials charged with implementing state and federal environmental laws.  

It may be tempting for state appropriators and budget officials to see the operating budget of an agency as chock full of administrative overhead and an easy target while making difficult budget decisions.  Indeed, budget documents are littered with references to “fiscal discipline,” “doing more with less,” and “creating efficiencies,” all of which are either expedient labels for budget balancing efforts in lean years or deliberate efforts to shrink the size of government.  But cutting positions and reducing the resources used to support agency staff can be the very antithesis of efficiency.  Having two people do one person’s job is inefficient, but hiring one person to do two jobs is every bit as ridiculous.

Maryland’s policymakers have made important choices over the last decade amounting to billions of dollars of projects that will reduce pollution from municipal wastewater treatment plants, urban impervious surfaces, and farm fields.  Numerous studies have tried to measure the cost-effectiveness of these investments, in terms of dollars per pound of pollution reduced.  And the results vary greatly, generally from a few dollars to a few hundred dollars per pound of nitrogen removed or prevented.  But even the cheapest of projects or practices pales in comparison to the cost savings that could be achieved by hiring the additional staff needed to properly inspect and maintain installations, optimize facility operations and performance, and enforce existing laws and regulations.

Many stormwater best management practices established by the state and counties in Maryland cost tens of thousands of dollars to install.  But if the property owner neglects to maintain the installation, it will fail, rendering the project useless and the investment of public funds worthless.  Richard Klein, a former state official and expert recognized by the Chesapeake Bay Program for his decades of experience on water pollution control efforts, has made this issue a personal crusade.  Organizing surveys of thousands of construction sites and stormwater installations across the state, Mr. Klein has shown citizens and government officials how foolish it can be to commit significant resources to capital projects while skimping on personnel, operations, and maintenance budgets.  

At MDE the situation has become very concerning.  The Maryland Office of Legislative Audits recently found that, for the state’s erosion and sediment control program (an area that Mr. Klein has spent significant time on), the department is woefully understaffed to ensure compliance with the state’s laws.  More broadly, the Water Management Administration within MDE has lost 30 percent of its overall inspection staff since 2000.  There continues to be a sizable backlog of cases awaiting the attention of assistant attorneys general at MDE and the Office of the Attorney General’s Environmental Crimes Unit operated for many years without any sworn police officers on its staff.  

The situation for the nutrient management program within the Maryland Department of Agriculture is similarly troubling.  With fewer than 10 inspectors tasked with inspecting over 5,000 agricultural operations in most years, the inspection rate hovers around 15 percent.  Even the Nutrient Management Advisory Committee, a body composed mostly of farmer and agribusiness representatives, has recommended the state commit more staff and funding at MDA for the implementation of nutrient management laws, noting that the tracking of nutrient management plans is deficient, the consequences of noncompliance are too low, and regulatory capacity is lacking.  

Even though it has taken years of budget cuts to arrive at this shameful situation, the good news is that it could be fixed almost instantaneously.  While the scale of the problem is massive, the cost of solving it is relatively minimal.  For example, doubling nutrient management inspectors at MDA would cost well under $1 million, restoring the inspection staff for the Water Management Administration to their 2000 levels would cost less than $1.5 million, and hiring several new law enforcement personnel for the Environmental Crimes Unit would cost only a few hundred thousand dollars.  For context, just one medium-sized wastewater treatment plant upgrade for enhanced nitrogen removal costs the state between $5 million and $15 million.  And the deterrent effect of having routine inspections and credible enforcement would likely reduce or prevent many times more pollutants statewide than any single capital project.

The University of Maryland Environmental Finance Center recently released a study to educate policymakers and the public on how the state can cost-effectively meet its commitments under the Chesapeake Bay Total Maximum Daily Load (TMDL) – the federally required plan for restoring the Bay.  The report was written by a team of experts focused on “innovative,” “efficient,” and “market-based” ways to finance the state’s obligations under the Bay TMDL.  Given the background and perspective of the report’s authors, it might be surprising to some to read the repeated and full-throated endorsement of traditional regulatory enforcement.  The authors noted that it was a basic assumption of their entire analysis that the state’s environmental enforcement efforts “will be consistent and effective.”  It would be wise for Maryland budget-makers to consider the following words of advice from the report’s authors:

Again, there are only two options available to the state for addressing pollution load reductions: assigning responsibility through regulation or directly financing reductions.  If state regulators choose to back off existing regulations, then it will be the state’s responsibility to finance those associated pollution reductions, which would in turn require additional revenue sources.

As the 2016 legislative session nears, there will be a lot of discussion about fiscal restraint and the most cost-effective ways for government to perform and operate.  The new Administration just got around last week to rebranding the previous Administration’s “StateStat” government performance and accountability efforts, renaming it the “Governor’s Office of Performance Improvement.” Here’s hoping that the “more with less” years are finally over and the Administration and lawmakers come to realize that you cannot increase an agency’s performance by cutting its staff.