State Runs Out of Money to Remediate Contaminated Waste Sites

DEP stops accepting cleanup applications, asks lawmakers to add $10 million appropriation to budget

With the state running out of money to clean up contaminated waste sites, industry advocates and environmentalists yesterday urged lawmakers to supplement those efforts with an additional $10 million appropriation in next year’s budget.

The state Department of Environmental Protection (DEP) has been swamped with applications from homeowners and developers seeking to remove underground storage tanks and to clean up contaminated brownfields, so much so that the agency has stopped processing applications, according to Irene Kropp, deputy commissioner.

Both funds are financed by the corporate business tax. But recent dips in the tax have created a situation in which applications far outpace the revenue set aside for cleanups, officials said.

Removing Underground Storage Tanks

The two programs have been highly popular, particularly in helping homeowners remove both leaking and non-leaking underground tanks. In fact, both initiatives have become victims of their own success, Kropp told the Senate Environment and Energy Committee yesterday, which held a hearing on the issue.

Since 2006, the underground storage tank program has funneled $23 million to homeowners to replace tanks that were not leaking, and more than $140 million to replace and clean up contaminated soil and fluids from tanks, which leaked home heating oil, Kropp said.

The pent-up demand for the underground storage program is $49 million, according to Eric DeGesero, executive director of the New Jersey Fuel Merchants Association. He noted that the state, however, expects to have only $16 million allocated to cleanups in next year’s budget, which begins July 1.

He suggested lawmakers add a supplemental appropriation in next year’s budget to add another $10 million to help meet some of the demand, a recommendation that was endorsed by environmentalists and cleanup contractors.

Besides the underground storage tank program, a separate initiative aimed at helping local governments clean up contaminated brownfields and return them to the tax rolls also is no longer processing new applications. Typically, the program allocated $40 million to $50 million annually to the effort, but like the underground storage initiative, the department has far more applications than funding available, Kropp told the committee.

There are more than $71 million in unprocessed applications in the brownfields program, which, like the underground storage initiative, is jointly administered by the DEP and the New Jersey Economic Development Authority (EDA). Its funding level for next year is expected to run about $13 million, officials said.

Both agencies are exploring options to find a way to funnel new funds into the two programs, including taking money from projects that had received funding but never got off the ground.

“We are looking at a whole panoply of options, including loans,’’ Caren Franzini, chief executive of the EDA, told the committee. “It’s not one size fits all.

In the meantime, the state is working with cleanup contractors, local officials and homeowners to alert them to the funding shortfall, officials said, and warning contractors not to tell homeowners to start projects and that they will be quickly reimbursed by the state.

“Unfortunately, now that money is not there,’’ Kropp said.

One possible new source of money is to go after parties whose fuel oil has leaked and seek to recover the costs of cleaning up soil and groundwater, according to officials.