Superfund Suffering Cash Crunch

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Taxpayers may be on the hook as the federal program for cleaning up industrial waste sites keeps getting bigger and its traditional funding stream shrinks, the General Accounting Office reports.

The Superfund program, which was established in 1980, was originally funded in part by revenue from a tax on crude oil, chemicals and corporations — reflecting the "polluter pays" principle behind the fund. The tax revenue was saved in a trust fund. The program was also funded by fines and payments by companies blamed for pollution at a particular site.

But the tax expired in 1995 and Congress did not renew it. Since then, the growing clean-up chores of the EPA-administered program have been financed increasingly by money from general tax revenues, and not by companies that tend to pollute.

From fiscal 1995 to 2002, Superfund's income from dedicated taxes, fines, penalties, and direct polluter payments shrank from $2.4 billion to $370 million — a fall-off of more than 80 percent.

The taxes on oil, chemicals, and companies have plummeted most dramatically — from $2.019 billion in 1993 to $7 million in 2002, a plunge of more than 99 percent. Fines and penalties shrunk by 75 percent, from $4 million to $1 million.

Over the same period, the contribution from taxpayers more than doubled, increasing from $283 million to $676 million.

Taxpayers' share may grow, the GAO found.

"The Superfund program's need for federal cleanup funds to address sites
that lack alternative sources of cleanup funds may grow in the future, while
the program's funding from sources other than general fund appropriations
dwindles," the report found. "According to EPA, the balance of the Superfund trust fund available for future appropriations will be depleted at the end of fiscal year 2003."

At the same time, the list of hazardous sites is expanding. The EPA knows of 44,000 potentially polluted sites and discovers about 500 new ones a year, according to the GAO — so many that one in four Americans lives within four miles of such a site. The sites earmarked for Superfund clean-ups are placed on a National Priorities List that numbered 1,233 at the end of fiscal 2002.

According to the report, a majority of those sites are in the final phase or clean-up work. But that phase can drag through several years.

Adding to the fiscal pressure, GAO reports, is the likelihood that fewer Superfund sites will have responsible parties who can pay for their clean-up, because of increased bankruptcies. Also, state governments — which sometimes share the clean-up costs — face budgetary constraints in the slow economy.

With the trust fund emptying, the EPA has asked an advisory board to consider options for funding the program, which is estimated to cost $15 billion over the ten years ending in 2009.

In July, the Bush administration added 10 new sites to the list of big-money Superfund toxic waste cleanup projects and delayed work on 10 others, factoring in the potential for economic development as well as possible health risks in choosing the locations.

Five other sites were to get reduced funding this year to free up money for the new starts, EPA officials said Thursday. Exact figures were unavailable.

Officials at the Environmental Protection Agency said there isn't enough money to begin all the projects now, prompting environmentalists to complain that not enough emphasis is being put on the cleanups.