RL31410 - Superfund Taxes or General Revenues: Future Funding Issues for the Superfund Program
4-Feb-2008; Jonathan Lee Ramseur, Mark Reisch, and James E. McCarthy; 13 p.
Update: Previous releases:
June 2, 2006
March 7, 2007
March 22, 2007
Abstract: This report discusses the role of dedicated taxes and other sources of revenue in funding the Hazardous Substance Superfund Trust Fund. Congress makes annual appropriations to the Environmental Protection Agency (EPA) from this trust fund and from general Treasury revenues for the purpose of supporting the Superfund program, which addresses both short-term (emergency) and long-term cleanup activity of hazardous substances at contaminated sites.
Three dedicated taxes (on petroleum, chemical feedstocks, and corporate income) historically provided the majority of the trust fund’s income. The taxes expired at the end of 1995, however, and the amount of unobligated money in the fund gradually dwindled. By the end of FY2003, the fund’s unobligated balance was zero, down from a high of $3.8 billion in 1996.
The Administration’s decision to not request reinstatement of the taxes has been supported by Congress, although some Members introduced legislation to do so. The annual budgets have compensated for the lack of dedicated tax revenue by increasing the contribution from the general fund of the U.S. Treasury. In fiscal years 2004-2007, virtually the entire Superfund program appropriation came from general Treasury revenues.
Proponents of reinstating the dedicated taxes contend that the cleanup of hazardous waste sites and releases (e.g., spills and leaks) should rely on taxes paid by the chemical and petroleum industries and companies that used the hazardous substances being cleaned up, not taxpayers. Proponents refer to this as the “polluter pays” principle. They also contend that in the context of federal budget deficits, it may be difficult to maintain spending at needed levels without dedicated taxes. Opponents of reinstating the tax argue, for example, that the tax is overreaching and unfair, as it applies to all industry sectors and to both compliant and noncompliant companies. In general, this funding debate applies to 30% of the sites on the National Priorities List; the remaining 70% of the sites, according to EPA, are cleaned up by responsible parties.
Several reports, including one for the House and Senate Appropriations Committees and reports by the EPA Inspector General, have concluded that spending has fallen short of the program’s needs. From FY2004 through FY2008, the President’s Superfund budget requests declined each year. However, during most of those years, the President’s Superfund budget proposals exceeded the amounts appropriated by Congress.