Kasich Names New Directors for Ohio EPA and ODNR

Last week, Governor-Elect Kasich named the new Director's for Ohio EPA (Scott Nally) and the Ohio Department of Natural Resources (David Mustine).  At the press briefing, Kasich reiterated his election theme of returning business growth to Ohio.  This from the Columbus Dispatch:

"These departments are going to send a message to Ohio that we are open for business," Kasich said in naming Scott Nally of Indiana as head of the EPA and former American Electric Power executive David Mustine as director of Natural Resources.

Kasich, a former Republican congressman who will take office Jan. 10, emphasized that he doesn't plan to empower business at "the cost of environmental degradation." But in the next breath, he said he wants to "exploit the wonders of our state."

"When you have something that's really valuable, use it," he said in a briefing at the Rhodes Tower. That includes drilling for oil and gas in state parks and on state land, he said.

Additional Background on Both Appointments

Scott Nally

Current Title: Assistant Commissioner, Office of External Affairs for IDEM

Degree(s): Master of Science from University of Wyoming; Bachelor of Science in Biological Sciences from North Carolina State University

Special license(s): Wastewater Operator certified in Indiana and Virginia; Pesticide Applicator License certified in Indiana

Experience: Regional environmental manager at Perdue Farms Incorporated; numerous publications; held various positions in the environmental and biological sciences; served as president, chairman or board member on various county boards

David Mustine

David Mustine was a Senior Vice President for American Electric Power (AEP) for European business development.  More recently he had his own consulting business. He also served as an investment manager for a Bechtel Group.  He has a B.S. in business from Ohio State, an MBA from DePaul and a MA from Ashland Seminary.

Appointments Consistent with Kasich "Business" Theme

The Governor Elect was all about jobs, jobs and jobs during the election.  He said a key to addressing Ohio's high unemployment rate was creating a better business climate.

Both appointments appear consistent with those themes. Scott Nally served in The Indiana Department of Environmental Management (IDEM) which has been under the leadership of Tom Easterly since 2005 when Governor Mitch Daniels appointed him Commissioner.  Easterly has  had a strong emphasis in running IDEM with an eye toward assisting business in navigating complex environmental regulations. 

Mustine's background at AEP will certainly be viewed with a skeptical eye by many environmental groups in Ohio.  However, he brings a unique business background to a organization whose past two Directors were much more political- both were former State Senators. 

Ohio EPA + ODNR?

 

 

Ohio is facing a $8 billion dollar budget gap.  Governor-elect Kasich has stressed the need to streamline state government as part of solving the budget crisis as well as making government more efficient. 

During his campaign he already announced one very creative proposal to eliminate the Ohio Dept. of Development.  Could an idea being tested in other states- combining State environmental programs-be a proposal worth considering in Ohio? 

Good in Theory?

A brief overview of the current state structure suggests combining responsibilities would gain efficiencies.  Similar functions and staff with similar capabilities are spread across five different state agencies. 

Combining functions and potentially agencies could benefit those organizations.  Greater efficiency is not only good for business, its good for agencies that are constantly fighting for funding to support their programs.

The counter argument is that combining large government agencies you run the danger of creating even a larger bureaucracy.  Not only could there be even more layers of management the organization could become too large to effectively manage. 

An Overview of the Current Ohio Structure

Most environmental regulatory functions are split between the Ohio EPA and the Dept. of Natural Resources.  However,  there are clean up, regulatory and grant programs related to the environment spread across a total of five different state agencies. 

Here is just a quick look at various functions that have commonalities and are divided up between multiple agencies.

Brownfield Redevelopment and Clean Up

  • Clean Ohio Program- divided between Ohio Dept. of Development and Ohio EPA

Federal Water Pollution Permitting Programs

  • Combined Animal Feeding Operations NPDES (Clean Water Act) permit program-  Department of Agriculture
  • NPDES (Clean Water Act) permit program- Ohio EPA

Litter and Recycling

  • Division of Soil & Water Resources (Previously Divisions of Soil & Water Conservation and Division of Recycling & Litter Prevention)- ODNR
  • Division of Solid Waste Management (manages Solid Waste Management District recycling efforts)- Ohio EPA

Wetlands

  • Environmental Review Program (Wetlands)- ODNR
  • Division of Surface Water (401 and Isolated Wetlands Permitting)- Ohio EPA

Ground Water Management

  • Ground water well information (within Division of Soil & Water Resources)- ODNR
  • Division of Drinking and Ground Waters- Ohio EPA

Surface Water and Lake Erie

  • Soil and Water Conservation programs - ODNR
  • Coastal Zone Management Program - ODNR
  • Great Lake Compact Program (Under development)- ODNR
  • Lake Erie grants program- Lake Erie Commission
  • Surface water Lake Erie Unit- Ohio EPA
  • Surface water regulatory and permitting programs- Ohio EPA

Underground Storage Tanks

  • Bureau of Underground Storage Tanks (BUSTR)- regulation and clean up of releases of hazardous substances from USTs- Dept. of Commerce
  • Clean up of hazardous substances un-related to USTs- Ohio EPA
    Diesel Engine Grant Programs

Diesel Emission Reduction Programs

  • Diesel Emission Reduction Grant Program- Ohio Dept. of Development
  • School bus diesel emission grant program- Ohio EPA

The list of similar functions spread across multiple agencies is probably longer.   In addition to similar regulatory functions, each of these agencies maintain their own Information Technology Offices, HR, Motor Pools, Facilities Management, Press Offices and Director's Offices.  Combining support offices could also gain efficiencies.

Not a Budget Fix

After modifications to its funding strategy, Ohio EPA utilizes no general revenue funds to support its programs.  ODNR has substantially reduced its reliance on GRF.  So combining agencies is not going to do much to fix the $8 billion dollar budget hole.

However, both agencies (as well as the other three agencies) assess multiple fees to business to support their programs.  These fees have regularly been increased to support rising human resource expenses within the Agencies.  Fees, while imposing costs on businesses, have traditionally not received the same political attention as GRF.

While streamlining and combining functions may not solve the $8 billion budget hole, it could avoid or reduce the need to raise fees on businesses. 

For a discussion of what has occurred in other states...continue reading.

Michigan was the latest State to combine- pulling together its Dept. of Natural Resources and Department of Environmental Quality.  Governor Granholm attributed the basis of the change to the unprecedented economic funding challenges facing State government. 

Michigan has an interesting history.  Fifteen years ago it decided to break apart the regulatory from the outdoor recreation functions.  Now its combining them back together again.   Not everyone was a fan of recombining the Agencies.  This from a Michigan newspaper story reporting on the proposal to combine DEQ with Natural Resources:

Russ Harding, who was the first DEQ director when it was formed in 1995 under then-Gov. John Engler, said that recombining the agencies will save far less than $2 million because it may only involve the elimination of a couple of top administrative positions.

Harding, who was one of three people that wrote the executive order the split the DNR and DEQ, said the division was intended to separate regulatory programs into a distinct department.

From a budgetary point of view, Harding, who now works for the Mackinaw Center free market public policy think tank, said that merging the departments is just “rearranging deck chairs.”

Harding said he’s been critical of plans to recombine the departments because of concerns that it could lead to increased hassles for those seeking permits.

In 2009, the State of Washington was the latest State to review combining environmental regulatory functions. A comprehensive report was issued that looked at national trends in dividing up environmental regulatory responsibility within State governments. This was taken from the introduction of the report that examined the proposal:

When Governor Chris Gregoire delivered her second inaugural address, she asserted that state government needs to rethink the way it delivers programs and services. This document begins a public dialogue on reforming Washington State’s work in natural resources.

The impetus for having these conversations now is the recognition that these are unprecedented economic times, and that natural resource agencies, as well as its many partners, cannot ride out the recession and then revert to business as usual. Instead, the Governor challenged state officials to use this crisis to make hard decisions that increase efficiencies and reduce costs. In this environment, we must seize the opportunity to reform so we can respond to the evolving needs of this century. This is the state’s moment to improve customer service and reform state government.

Washington's combination of agencies at this point is only virtual.  It has created a single website- "One Front Door to Washington's Outdoors"-  to access all information regarding environmental regulation and natural resources.   

Overview of Other State Government Structures

Single Agency Structure: 

Rhode Island is the only state that has its natural resources, environmental protection and agricultural authorities combined into a single agency. 

However, in an interesting twist on combining agencies, Massachusetts created the Executive Office of Energy and Environmental Affairs.  The Executive Offices provides overall management to several Departments- Department of Agricultural Resources, Department of Conservation and Recreation, Department of Environmental Protection, the Department of Energy Resources, Department of Fish and Game and Department of Utilities. 

Two Agency Structure: 

Ten states have combined their basic natural resources functions with environmental protection into a single agency.  Each has a separate Agricultural department.

  • Michigan:  Department of Natural Resources and Environment
  • Connecticut: Department of Environmental Protection
  • Delaware: Department of Natural Resources and Environmental Control
  • Georgia:  Department of Natural Resources
  • Iowa: Department of Natural Resources
  • Kentucky:  The Energy and Environment Cabinet
  • Massachusetts:  Executive Office of Energy and Environmental Affairs
  • New Jersey:  Department of Environmental Protection
  • New York:  Department of Environmental Conservation
  • North Carolina:  Department of Environment and Natural Resources
  • Vermont:  Vermont Agency of Natural Resources
  • Wisconsin:  Department of Natural Resources

Three-Agency Structures

At least nine states operate under a three-agency structure (natural resources, environment and agriculture).

  • California:  Natural Resource Agency, Environmental Protection Agency
  • Colorado:  Department of Natural Resources, Environmental Protection Agency
  • Illinois:  Department of Natural Resources, Environmental Protection Agency
  • Indiana:  Department of Environment, Department of Natural Resources
  • Maryland:  Department of Environment, Department of Natural Resources
  • Minnesota:  Department of Natural Resources, Pollution Control Agency
  • Missouri:  Department of Natural Resources, Pollution Control Agency
  • Ohio:  Environmental Protection Agency, Department of Natural Resources
  • Utah:  Environmental Quality Agency, Department of Natural Resources