Mr. Barnhart of DEC advised the Council that the present budget year will be a difficult one due to the combined effects of the economic downturn of 2001 and the terrorist attacks on 11 September 2001. Last ball, the estimate of the 2002/2003 budgetary deficit was approximately $9 billion. More recently, after state income tax returns began to come in, this estimated shortfall increased to about $10 billion. Presently, DEC is operating under a ìhardî hiring freeze; vacant positions are frozen and can only be filled by getting a special exemption from the Division of the Budget. Since, October 2001, DEC has received exemptions to fill 4 positions out of 40-45 vacancies. Waivers to the hiring freeze are only issued for positions that are critical to protecting public health or that have revenue-generating importance. Mr. Barnhart stated that a number of marine program positions that are presently vacant, in his view, meet those criteria and waiver requests for these positions have been prepared and filed.

In the 2002/2003 state budget, DEC will get a General Fund reduction that will eliminate 30 positions; less than the present number of vacant positions in the agency. In the Division of Fish, Wildlife, and Marine Resources, the General Fund accounts for 20-25% of the operating budget. The Conservation Fund is the largest source of operating money for the Division (50-55%). The Conservation Fund is broke and has been bailed out by a recent, one-time transfer of $3 million in March from the General Fund to the Conservation Fund. Governor Pataki's executive budget bill contains hunting and fishing license fee increases that will keep the General Fund solvent for the next six years. Enactment of this portion of the budget is anticipated. A proposed, voluntary $5 habitat and access stamp should provide new revenue for habitat protection and public access programs, aiding the Artificial Reef program, boat ramp or fishing pier construction, etc. The budget should provide appropriations from the Environmental Protection Fund for open space and land acquisition, stewardship activities on state lands, landfill closures, etc. Annual revenue to the EPF is about $125 million. There was no EPF appropriation last year and it is expected that the FY 2002/2003 appropriation will be $250 million. EPF monies are used to enhance and improve the state's infrastructure related to the environment. In response to questions from councilors, Messrs. Barnhart and Colvin described the process by which decisions on EPF spending are made and how public input is solicited in this process.

The State Wildlife Grants Program is a new federal program that provided DEC with $2.3 million in the FY 2001 federal budget and will get $3.7 million in the federal FY 2002 budget. These monies can be used to fund a variety of fish and wildlife programs, as long as these programs target species of, ìgreatest conservation need.î Mr. Barnhart asked the Council to think about marine species that might meet this definition and to suggest any such to Mr. Colvin. Councilor Danielson suggested that winter flounder would be a good candidate.

Mr. Barnhart stated that DEC is looking forward to hearing the recommendations of the Council for long-term financial support of the Department's marine program needs and he urged the Council subcommittee on this matter to expedite its work and for the Council to give the findings and recommendations of that subcommittee its thorough attention.

Mr. John German from the Long Island Sound Lobstermen's Association suggested that the state should levy a fee for use of state-owned underwater lands in the Marine District for the purpose of submerged transmission cables, pipelines, and other utility infrastructure. There was general agreement on the Council that this suggestion had considerable merit. Mr. Barnhart referred to the Utility Regulatory Account that might be an appropriate depository for such a fee. Councilor McBride warned against anything that might result in an increase in the already very high utility rates in the New York region. Many ratepayers might strenuously object. Most felt that the impact of such a fee on each ratepayer would probably be minimal.