The clock is again ticking for the state’s cash-strapped water protection program, which will lose a key funding source this summer without legislative action.
At issue are routine fees paid by businesses and municipalities for permission to discharge wastewater or divert storm runoff into Missouri rivers and streams. The fees are set to expire Sept. 1 unless they’re renewed. And even that wouldn’t solve the water program’s projected $3 million annual deficit.
Water permit fees have come to symbolize a widening rift in recent years between state regulators and Senate Republicans. The dispute grew even more heated in 2009 after Department of Natural Resources delayed the release of data showing elevated E. coli levels at Lake of the Ozarks, which led to a Senate investigation.
And the DNR recently shelved its own proposal to fix the problem despite the plan’s broad support from businesses.
Now, one of the department’s harshest critics believes there’s political will to fix a broken system.
“You can’t continue to deficit spend, so resolution is going to have to be brought to this,” said Sen. Brad Lager, head of the Senate’s Commerce Committee. “My belief is that getting something resolved this session won’t be a problem.”
DNR collects about $4 million a year in water permit fees from sewer system operators, livestock producers, manufacturers, commercial developers and homebuilders. The fees originated in 1990, and make up about a quarter of the budget for the water program’s budget. Funds help pay for issuing permits, conducting inspections and monitoring water quality.
An interim legislative committee studied water fees in 2008 and proposed $3.5 million in increases. But nothing came of the effort. Then, in 2011, fees were allowed to expire. For more than six months, DNR didn’t have authority to assess permit fees.
A bill reauthorizing the fees passed months later, but it came with strings attached. It required the department’s director to sit down with regulated industries and hammer out a new fee structure and proposals to improve permitting efficiency.
A 40-page draft report issued Nov. 30 recommended across-the-board fee increases and proposed ways to streamline permitting process. It also recommended giving the fee-setting authority to the Missouri Clean Water Commission, a citizen panel appointed by the governor charged with establishing water policies in the state.
But when DNR Director Sara Parker Pauley sent the final report to the Legislature on Dec. 31, proposals to boost fees and streamline the permitting process had been stripped out — an action that frustrated business groups that had committed to paying higher fees. DNR did not offer an explanation for the exclusion.
“Some of my clients are ready to pony up for increased fees,” Robert Brundage, a lawyer representing agribusiness interests vented to the Clean Water Commission last month. “In this time and age, that’s not an easy thing to do. ... Without funding, permits aren’t going to get out the door, the water’s not going to be protected, the inspectors aren’t going to be out there inspecting.”
Lager, R-Savannah, called the final report “very disappointing.” But, the senator, who previously compared the DNR to the Kremlin, credited Pauley with making big improvements at the department.
“We’ve come a long way from where we were two years ago,” he said. “Sara has done a really good job of taking a dysfunctional place and at least moving it, in my opinion, in a good direction.”
Lager said lawmakers would use the earlier draft report on water fees — not the version submitted to the Legislature — as a starting point as they try to craft a permanent fix to the water fee structure.
The draft proposed increasing water fees for the first time since 2000 and raising enough additional revenue to offset a projected $2.9 million annual deficit for the water program over the next four fiscal years.
The proposal would also streamline permitting process, eliminate the need for some construction permits and give the Clean Water Commission authority to raise fees as necessary in the same way the state’s Air Conservation Commission already does.
Rep. Don Phillips, chairman of the House Tourism and Natural Resources Committee, filed legislation last week that would extend current water permit fees for another five years. But he said he’s not opposed to some broader reform, including authorizing the Clean Water Commission to adjust fees as needed.
“I like local control,” he said. “The people close to the issue tend to do a better job.”
No one wants to see the permit fees lapse again.
Environmental and conservation groups want adequate funding to help protect the state’s water resources. And businesses, too, say it’s critical to have a well-funded, well-functioning water protection program even though it could mean higher fees.
“It seems to us that the issue gets caught up in the whole tax issue, and no one wants to raise taxes,” said Roger Walker, executive director of Regulatory Environmental Group for Missouri, which represents some of the state’s largest employers on regulatory issues. “But it’s not a tax, it’s a fee for service.”
Without adequate revenue, permits could get delayed and the department could lose more of its staff. Longer term, there’s even the possibility of the Environmental Protection Agency taking over the water program if the state doesn’t adequately enforce water laws.
No one sees it coming to that, though.
“It is our expectation that needed funding will be available for (the Missouri) DNR to remain the lead permitting agency as provided for under the Clean Water Act,” Kris Lancaster, a spokesman for the EPA’s Kansas City regional office, said in an email response to questions.
Ultimately, the timing of legislation to address water fees could depend on the governor’s plan to restructure the state’s environmental commissions.
In last month’s state of the state speech, Gov. Jay Nixon proposed eliminating some commissions and merging the rest to make it easier for businesses to get permits. Nixon spokesman Scott Holste wouldn’t elaborate on the governor’s plans.
Lager agreed that there’s probably room for some consolidation of commissions. But he’s not sure the answer is a single super commission.
“I’m not sure what the appetite of the Legislature is on that,” he said.