Tight Budget May Drain Water Fund Batt, Legislators Raiding Water Pollution Protection Fund For Cash To Run Other Projects

Gov. Phil Batt wanted to put the brakes on government growth with a tight budget, but even with that commitment he had to turn to the Legislature’s favorite cache of mad money to make ends meet.

The 1997 budget blueprint that the first Republican governor in 24 years proudly calls his own replaces millions of dollars in general tax spending with cash from the Water Pollution Control Account, the fund established to help local governments maintain safe water and sewer systems.

And since he jettisoned all but a handful of new spending requests in a budget plan kept austere by Idaho’s slowing economy, lawmakers are eyeing the special account for money to underwrite pet projects Batt set aside.

“It’s pretty obvious when they’re short of money they turn to that fund,” House Appropriations Chairman Kathleen Gurnsey said.

The administration justifies reducing the money previously earmarked for local water and sewer systems by pointing out that requests for grants to repair old ones or build new ones have been running $3 million to $5 million below the amount available in recent years.

But rather than making it easier for cities to get grants, the governor and his budget analysts simply decided to put that money to work in other areas even if they are not directly related to water quality.

It is not the first time the fund has been tapped for non-water quality purposes, and it will not be the last if the grant procedures remain unchanged.

Although reports of bacteria problems in municipal water systems and boil orders for residents of cities throughout the state seem to be more and more frequent, the head of the Association of Idaho Cities says too many municipalities cannot come up with the $100,000 to $200,000 it typically takes to do the engineering studies needed before a grant request can be made.

“That’s the only reason the requests are down, not because the need is not out there,” Scott McDonald said.

And the situation will not improve without changes, he said, because the 3 percent cap the governor’s property tax relief plan put on local government budgets makes it even more difficult for cities or counties to find the money to pay for engineering studies.

Batt followed a 1995 legislative directive to spend $2.4 million from the fund on the state’s share of the Bunker Hill Superfund environmental cleanup in the Sliver Valley. But then he took another $1.1 million to pay for the non-water quality operations of the Division of Environmental Quality. Another $300,000 would go for a study of the aquifer under Ada County, $250,000 for the Triumph Mine cleanup near Ketchum and over $1 million to underwrite stream quality assessments required under a federal court order. The Soil Conservation Commission’s $112,000 role in the agricultural water quality program would come from the fund as would $57,000 for pesticide disposal in the Agriculture Department.

Former Democratic Gov. Cecil Andrus shifted $3 million in financing for water quality regulation to the fund in 1992 when he was in a cash pinch, and five years earlier lawmakers simply withdrew $9.5 million to cover a general deficit.

Once teetering on the brink of running out of cash, the fund got a major boost several years ago when the annual infusion of inheritance tax more than tripled to over $15 million. The fund also gets about $5 million a year in sales tax collections and $4 million in tobacco tax receipts.

And because of the problems local governments have in getting grants, the fund balance would remain at a healthy $7.5 million even after Batt’s new raid.

But with the governor now showing the way, some lawmakers are casting an election-year eye at the account for money to pay for their pet projects he rejected.

And that has analysts again concerned about the account’s financial integrity to the point of recommending creation of a special panel to review any more requests for cash such as the $800,000 being sought for Cascade Reservoir, $200,000 for the lower Boise River and an unspecified amount for more work on the Middle Snake River. Compounding the problem, they say, is the prospect of federal money now being used for water quality programs being pulled in the congressional frenzy to balance the federal budget.

“All these little projects are nibbling away,” legislative analyst Dick Burns told budget writers. “There’s a lot of things unsettled.”

GOP Rep. Robert Geddes, the conservative vice chairman of the House Appropriations Committee, says lawmakers should seriously consider the appropriateness of all the diversions of cash earmarked for local water quality.

But he concedes that the governor’s budget is put together so intricately that much tinkering would create a budget crisis, and his reliance on the Water Pollution Control Account only gives others the same idea.

“There’s no doubt people are going to look at this fund for special projects when there’s no other money out there,” he admits.