Hearing of Senate Committee on Energy and Natural Resources on Proposed Budget for FY 2007

Hearing of Senate Committee on Energy and Natural Resources on Proposed Budget for FY 2007

Statement of Senator Lisa Murkowski
Receive Testimony on EPA's Proposed Budget for FY 2007

Thank you, Mr. Chairman. I am pleased that the Committee is holding a hearing to examine the EPA's Fiscal Year 2007 budget and that Administrator Johnson is able to appear before the Committee today.

There are a number of issues that I'd like to address today - the first of which has critical importance to my constituents in remote Alaska Native communities.

During last year's budget hearing, I invited the Administrator to travel to Alaska to visit rural Alaska Native communities firsthand. I'm pleased that Claude Allen, the President's former top domestic policy advisor, and the Administrator were able to visit the villages of Kasigluk, Atmautluak, and Nunapitchuk, among other Alaska communities, last August.

As they saw during their visit, the water and sewer conditions in these communities often rival the conditions in third world countries. For example, residents in some villages in Alaska have to go to a central source in the community to get fresh water. This source is often a well and, in some cases, a nearby river. Instead of flushing toilets, residents in some villages have to use a device called a "honeybucket." This device is a large bucket with a toilet seat on top. When the honeybucket is full, it is usually dumped in a sewage lagoon or on land. Sometimes, these dump locations are near sources of drinking water.

This lack of sanitation has a startling effect on the health of the residents of these communities. According to the Centers for Disease Control, infants in villages with less than 10 percent of homes with water service are eleven times more likely to be hospitalized for pneumonia and five times more likely to be hospitalized for lower respiratory tract infections.

I have grave concerns regarding the Administration's proposed Fiscal Year 2007 budget cuts to the EPA program that addresses the basic drinking water and sewer needs of these communities. The FY07 request for this program is $14.85 million, while the FY06 enacted level is approximately $34.65 million. That's a 57 percent reduction in funding. This funding goes to the State of Alaska's "Village Safe Water" program, which provides matching funds and works with non-profit and other federal agencies to ensure that this funding gets to the communities that truly need it.

In previous years, the Department of Agriculture's Rural Development Administration has also provided funding for the Village Safe Water program. The FY07 request for USDA does not include any funding for this program. I am quite troubled by that. The FY06 enacted level is $25 million.

The budget outlook for this critically important program is quite bleak at this time. Including both streams of funding, the Administration is essentially requesting a 75 percent funding cut for this program. Frankly, this is unacceptable.

I realize that EPA and OMB does not see this funding request as a cut since this year's request is approximately the same amount as last year's request - $15 million. However, both my fellow Alaskans and I see this as a cut. In fact, there was an article about this on the front page of the Anchorage Daily News the day after the budget was submitted last week. The headline was "Alaska Bush water funding could be cut" and the sub-headline was "Federal Budget: Program aiding rural dwellers listed as ‘ineffective'".

According to the "Major Savings and Reforms in the President's 2007 Budget" document that was also released last week, the low funding request was linked to the negative PART report issued in 2004. That PART report rated this program as "ineffective." The budget document states "The funding reduction will be reconsidered once the program can demonstrate that funding is likely to effectively and efficiently help villagers."

I know that the State of Alaska's Department of Environmental Conservation is working to address the various concerns raised about this program. Specifically, they have the following initiatives underway: 1) implementing procurement and contracting improvements, 2) hiring an in-house accounting staff, 3) implementing a new project accounting system, 4) implementing a new project tracking and reporting system, and 5) improving project management generally. In addition, the State of Alaska has informed me that they have been working with EPA Region 10 to address issues of concern.

I am concerned that the Administration has requested a low level of funding even when both the State of Alaska and EPA have undertaken an effort to address the concerns raised in the PART report, the EPA Inspector General's audit, and the Alaska Legislature's audit. In fact, the State of Alaska has requested that OMB conduct another PART assessment in order to document this program's improvements. However, they have so far not agreed to reassess this program. In effect, this funding reduction penalizes Alaska for OMB's failure to conduct a timely PART reassessment.

I want to underscore that the Federal funding for the State of Alaska's Village Safe Water program has been a success over the years. Over 200 rural Alaska communities have received funding from this program and approximately 95,000 rural Alaskans have benefited from it.

However, there is still a great deal of need. Thirty-three percent of rural homes in Alaska still do not have running water and sewer. In planning for rural water and sewer projects for the next three year period, the State of Alaska, EPA, and USDA have identified approximately $206 million in project needs.

I'd like to address a few other issues of note in EPA's budget request.

The State of Alaska informs me that the 16 percent reduction in funding for the State and Local Air Quality Management program, along with effectively increasing state match requirements will eliminate efforts to assess and correct air quality issues in remote Alaska Native villages from diesel generator exhaust and dust. The budget request also includes $50 million for the Clean Diesel Initiative. This funding might help other states but the State of Alaska informs me that the language of the budget request will disqualify almost all Alaska entities from applying for these grants. Both of these budget items are of concern to me since many remote Alaska Native villages use diesel generators as their primary power source - it is usually their only option since these villages are not on the road system and are far from major power grids.

I am also concerned that the budget includes a 23 percent reduction in funding for the Clean Water State Revolving Fund loan program. This funding is intended to help communities finance sewer-related infrastructure projects. This cut will lower the amount the State of Alaska has available to loan to communities. Approximately one and a half percent of this fund is set aside for grants to tribes or Alaska Native Villages. Subsequently, the State of Alaska informs me that this budget request will also reduce the amount available to Alaska's remote Native Villages to address sewer-related needs by approximately $1 million.

In effect, the Administration's Fiscal Year 2007 budget request for EPA hits Alaska hard, particularly remote Alaska Native communities.

With regard to Village Safe Water funding, the proposed reduction in the President's budget unfairly punishes Alaska Natives and other rural Alaska residents for shortcomings that both the State of Alaska and EPA are working to address. I want your commitment to help ensure that OMB recognizes the work that is underway to improve this critically important program.

I have nothing further. Mr. Chairman, thank you once again for holding this hearing.

http://epw.senate.gov/hearing_statements.cfm?id=251589