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Creating a Financially Sustainable Permit Fee Structure

Creating a Financially Sustainable Permit Fee Structure. Prepared for the New Hampshire Department of Environmental Services, Air Resources Division, by Michael Sanchez, William de Chatellus, Peter Kim, and Michael Altamirano. Three c hallenges c urrently face the NHDES. Decreased Funding.

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Creating a Financially Sustainable Permit Fee Structure

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  1. Creating a Financially Sustainable Permit Fee Structure Prepared for the New Hampshire Department of Environmental Services, Air Resources Division, by Michael Sanchez, William de Chatellus, Peter Kim, and Michael Altamirano

  2. Three challenges currently face the NHDES Decreased Funding Increased Mandates Decreased Revenue • State and federal grants combined comprise 32% of NHDES revenue Increased federal mandates from the EPA, usually without concurrent increases in funding In the past 5 years, NH emissions fell by ~37% NHDES deficit margin will grow without intervention Source: NHDES, EPA

  3. Goals for NHDES Remain financially sustainable Maintain environmental quality and public health Cooperate with state businesses

  4. Establish Fees for Toxic or Hazardous Emissions Vermont Example Maine Example Source: VTEC, MDEP

  5. Increase Emission Charge on SOx Sulfur Dioxide (SOx) • Represents ~72% of New Hampshire emissions (5-year average) • 5-year average annual decrease of 9% • Includes 33% 2010-2011 YoY decrease • 4-year (2006-2010) average annual decrease is 3% Nitrogen Dioxide (NOx) • Represents ~14% of New Hampshire emissions (5-year average) • 5-year average annual decrease of 10% • Emissions increased in only 3 out of 17 years surveyed Carbon Monoxide (CO) • Represents ~13% of New Hampshire emissions (5-year average) • 5-year average annual increase of 15% • Includes 91% 2007-08 YoY increase Source: NHDES

  6. SOx Revenue Estimated to Increase by 2% per Year Assumptions SOx-revenue 5-yr CAGR: 2% Source: NHDES

  7. Increase the Fee for SOx from 12% to 23% Why 23%? SOx-revenue 5-yr CAGR: 12% Source: NHDES

  8. Charge Progressive Rates for Different Amounts of Emissions Massachusetts Example Rhode Island Example Source: MDEP, RIDEM

  9. Eliminate State Programs to Focus on Federal Mandates RI: Eliminate Nearly All State Initiatives Increase Per-Ton Fees for Sulfur Dioxide • Pursued by Rhode Island in the face of increasing unfunded mandates from the federal government • Saves money by cutting costs associated with state initiatives • Cutting such initiatives may negatively impact the community the NHDES serves Source: NHDES Source: NHDES

  10. Introduce Vehicle Emissions Surcharge VT: Inspection Sticker Fee CT: Vehicle Emissions Fee CA: Smog and Vehicle Fees Uses annual vehicle inspections, along with inspection sticker fees ($5 per vehicle) Increase in $0.50 to the inspection sticker Adopted the emissions surcharge with the creation of the Title V fee system Totaling $3.4 million, (32.8 percent) Implemented a smog abatement fee of $12 (now at $20) per year Included a separate $8 smog transfer fee Included a $8 fee application for decal (California Vehicle Code) Mobile emitters are largest source of air pollution

  11. Reducing Personnel Costs RI: Directly Eliminate Staff Positions ME and SC: Evaluate Vacant Positions Reduced the number of staff positions from 30 to 23 in the past five years Allows for reducing personnel costs without terminating active employment Source: EPA

  12. Introduce New Application, Review, and Processing Fees RI: Differentiates Permit Application Fees CT: Charge Fees For Late Payment Permit application fees could be differentiated by source type. Rhode Island differentiates between five types: major source, complex minor source, minor source, toxic operating sources, and second tier Implemented late fees for tardy compliance with fee deadlines Source: EPA

  13. Request General Fund Assistance SC: Request General Fund Assistance Increase Per-Ton Fees for Sulfur Dioxide • Compensated for lower fee revenue by requesting increases in general fund assistance, with little political contention • Viability of option for NH depends on legislative willingness to allocate more funding to NHDES grants • Temporary general fund allocation would allow NHDES to remain fiscally solvent while it explores more long-term, programmatic changes Source: NHDES Source: NHDES

  14. Summary of Options • Introduce vehicle emissions registration surcharge • Increase emission charge on SOx • Introduce new application, review, and process fees • Implement toxic/hazardous emission surcharge • Develop progressive emission fees • Reduce personnel costs • Reduce state initiatives to focus on federal mandates • Request General Fund assistance

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