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Saving a National Treasure: Financing the Cleanup of the Chesapeake Bay

Saving a National Treasure: Financing the Cleanup of the Chesapeake Bay Advice to the Chesapeake Executive Council October 27, 2004. A National Treasure... The Chesapeake Bay is America’s largest and most biologically diverse estuary

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Saving a National Treasure: Financing the Cleanup of the Chesapeake Bay

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  1. Saving a National Treasure:Financing the Cleanup of the Chesapeake Bay Advice to the Chesapeake Executive Council October 27, 2004

  2. A National Treasure... • The Chesapeake Bay is America’s largest and most biologically diverse estuary • Years of scientific research tells us what needs to be done to bring back the Bay • Today’s challenge is finding the billions of dollars needed to complete the job • The Blue Ribbon Finance Panel was formed to develop innovative ways to find those funds.

  3. Creating the Panel... • Called for by the Chesapeake Executive Council at its December 2003 Annual Meeting • Comprised of fifteen individuals and includes: • high-level business leaders of major companies, financial and economic experts, • stakeholders with experience in storm water, agriculture, air emission and wastewater treatment plant funding and pollution control. • current and former local, state and federal officials with financing expertise.

  4. Panel Membership... • Members were selected by • Governors of: • Delaware • Maryland • New York • Pennsylvania • Virginia • West Virginia • Mayor of the District of Columbia • Chesapeake Bay Program partners including: • Chesapeake Bay Commission • U.S. Environmental Protection Agency

  5. Panel Membership... Left to right: Joseph Corrado, James Patrick Muldoon, John McNeil Wilkie, Phyllis M. Cole, William C. Baker, James D. Wilkins, II, The Honorable Gerald L. Baliles, F. Henry Habicht, II, The Honorable Penelope A. Gross, Terry L. Randall, Thomas J. Kelly, The Honorable Bruce Babbitt. Not shown: Nicholas DeBenedictis, The Honorable James W. Hubbard, Jim Purdue.

  6. The Panel’s Mission... • The panel was charged to: • evaluate possible funding sources and financing mechanisms for reducing nutrient and sediment pollution throughout the Bay watershed; • assess and explore financing opportunities from federal, state, local and private sources • emphasize financing efficient pollution reductions from storm water, air emissions, agriculture and sewage treatment plants.

  7. What the Panel Learned... • What’s hurting the Bay? • Nutrient and sediment pollution degrades water quality and provides poor conditions for the plants and animals that call the Bay home • Pollution comes from: • Agriculture • Air Deposition • Municipal and Industrial Wastewater Treatment • Development • Septic Systems

  8. What the Panel Learned... • What’s needed to restore the Bay? • Steep reductions in the amount of nutrients and sediment flowing into the Bay • A large-scale financial investment • A fully-integrated approach for coordinating funding and implementation across the watershed’s seven jurisdictions • The political will to make it a reality

  9. The Panel’s Recommendations... • Recommendations are based on a defined set of principles: • Immediacy • Simplicity & Efficiency • Innovation & Flexibility • Cooperation & Inclusiveness • Prevention, Regulation & Enforcement • Education & Outreach

  10. Primary Recommendation... • The Chesapeake Bay Financing Authority • Charged with prioritizing and distributing restoration funds across all parts of the Bay watershed • Would “direct funds toward efforts deemed the most effective, efficient and innovative,regardless of geography” • Capitalized by a six-year, $15 billion investment • 80/20 ratio of federal to matching funds • Similar to State Revolving Loan Funds (SRF), but with Bay watershed pollution reduction focus

  11. Primary Recommendation... • The Chesapeake Bay Financing Authority should be: • Established as soon as possible, but no later than January 1, 2007 • Comprised of Bay Program partners and important stakeholders, including agriculture, wastewater treatment plant officials and business • Empowered to issue grants as well as revolving loans • Funded in perpetuity by sustainable revenue streams

  12. Supplementary Recommendations... • 22 Recommendations • Should be coordinated with the proposed Financing Authority • Recommendations aim to: • Improve existing funding programs • Expand financing opportunities • Improve the ability of the Bay Program to restore the Bay • Presented by sector

  13. Key Bay Program Recommendations... • Improve coordination and cooperation among federal agencies • Expand participation of the headwater states in the Bay Program. • Establish state surcharge programs throughout the Chesapeake Bay watershed. • Apportion funds for education, outreach and technical assistance to important stakeholders.

  14. Key Agricultural Recommendations... • Increase Farm Bill funding for the Bay watershed • historically the Bay watershed has received less funding than other regions in the country • Improve the efficiency of federal cost-share programs • Require nutrient management plans as part of compliance for Farm Bill Commodity Payment programs. • Invite the Secretary of Agriculture to join the Chesapeake Executive Council.

  15. Key Wastewater Recommendations... • Create a nutrient trading program for municipal and industrial wastewater plants. • Develop a pilot grant program to upgrade wastewater treatment facilities • The federal government should develop a Hardship and Innovation Fund to supplement Clean Water State Revolving Loan Fund programs (CWSRF). • The states should establish tax-exempt financing for industrial wastewater facilities.

  16. Key Development Recommendations... • Establish storm water utility user fees at the local level to fund storm water management programs • Develop financial incentives to reduce the cost of urban retrofits • Establish a residential lawn and garden fertilizer surcharge at the state level. • Fund green space acquisition though Property of Transfer Development Rights

  17. Other Key Recommendations... • Increase funding for riparian forest buffer restoration through the Conservation Reserve Enhancement Program (CREP) • Enforce federal and state Clean Air Laws • Extend vehicle tax incentives for fuel efficient automobiles and trucks • Amend 2003 Tax Act to restrict equipment deduction for large SUVs and trucks

  18. In Summary, the Panel finds... • It is difficult to determine the full costs of restoring the water quality of the Chesapeake Bay, current funding clearly does not meet financing needs for restoring water quality by 2010. • Available funding remains insufficiently prioritized and directed. • The time to address and meet these challenges has arrived. • Financially, it is wise to make this investment in the Bay now. • Legally, it would be imprudent to ignore the consequences that will flow from a failure to make this investment.

  19. For more information... Saving a National Treasure: Financing the Cleanup of the Chesapeake Bay is available by calling 800-YOUR-BAY and requesting a copy or visiting the Chesapeake Bay Program Web site at: http://www.chesapeakebay.net/blueribbon.htm

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