Potential Impacts of Reducing EPA's Budget

In response to a congressional request, GAO examined the possible impact of fiscal year (FY) 1982 and proposed FY 1983 Environmental Protection Agency (EPA) budgets on the air and hazardous waste programs in 15 states and 3 localities, the implications of the eventual phaseout of state grant assistance, the evolving federal/state partnership, and the effects of budget reductions on EPA personnel and contracting activities.

The proposed FY 1983 reductions motivated EPA and states to consider what their future roles would be in managing environmental programs with less federal financial assistance. Some states predicted a possible decrease in state environmental programs. Others indicated that they would consider returning to EPA some of the air and hazardous waste programs which have been delegated to them or not seeking authorization for programs not yet delegated. EPA, states, and others have expressed concern that, without federal financial assistance, inequity and inconsistency in achieving environmental goals may result. EPA is changing its oversight policies of state programs from a detailed project-by-project review to an oversight that is focused more on results. GAO stated that EPA must assess the impact of budget reductions on its ability to provide oversight and take corrective action when states fail to perform as expected. Because of decreasing or uncertain funding, several states are considering adopting new fee systems or raising existing fees. However, such plans may create compliance disincentives or other unintended effects. In addition, EPA personnel and contracting activities may be effected by budget reductions.