Paying for the Bay
At their January 2005 meeting at Mount Vernon, Virginia, the Chesapeake Executive Council - composed of the governors of the Bay states, the Mayor of the District of Columbia, the Chair of the Chesapeake Bay Commission, and the Administrator of the U.S. EPA - formally accepted the report of a Blue Ribbon Finance Panel charged with recommending ways to pay for the Bay restoration effort.
The Executive Council directed a committee of experts to determine, by July 1, 2005, the best course of action for enacting the Panel's primary recommendation: the establishment of a watershedwide Chesapeake Bay Financing Authority. According to the Panel, chaired by former Virginia governor Gerald L. Baliles, a properly designed Financing Authority would receive funds from both federal and state sources and would direct those funds strategically to the Bay's most pressing problems, regardless of geography or political boundaries.
In the Chairman's Summary, Baliles argued that the Panel believes that "restoring the Chesapeake Bay and its watershed depends on a strong regional financing mechanism aimed at coordinated funding and implementation of concrete clean-up plans, built on the state's Tributary Strategies and based on coordinated timing and performance." He goes on to say, "Time is of the essence and we urge immediate action."
The Panel recommended that the Financing Authority be capitalized by both federal and state sources at a total of $15 billion by 2010. These funds would be provided in an 80 to 20 percent federal/state ratio, in keeping with State Revolving Funds (SRFs) around the country. Only 30 percent would be used as grants, and the remaining 70 percent would be provided as loans to be paid back to the Financing Authority, helping to make it self-sustaining.
The popular press has reported frequently during the past two years on the slow progress made by the multi-state/federal effort launched in 1983 to stem the flow of pollutants into the Chesapeake. The Blue Ribbon Panel made clear that a primary reason for this delay was a lack of adequate funding, which is realistically in the billions of dollars, far above anything committed to date. They also noted other factors, including the need for better coordination, and the need to enforce existing environmental laws.
The Chesapeake Bay Program awarded two grants to the Maryland Sea Grant College and the University of Maryland Environmental Finance Center (EFC) to help staff the Panel and its subcommittees, and to help produce meeting summaries and the final report. In particular, Maryland Sea Grant (Jack Greer) and the EFC (Dan Nees and Michelle O'Herron) helped with the collection and shaping of background materials, meeting facilitation, and the design and production of the final report. The EFC will continue to help provide information about the Blue Ribbon Panel and to explore mechanisms for financing the Bay restoration effort.