Chairman Core and members of the committee, I am Sean Logan, the new Director of the Department of Natural Resources.  Thank you for the opportunity to testify today concerning the department's diverse programs and activities for the FY's 2008 and 2009.

To a department that is barely two-thirds the size it was in 1992 a flat budget is a good budget. I hope that we can move beyond the numbers and figures on the pages in front of us, and prove the value to Ohio taxpayers of the support we are asking you to entrust us with.

While parks and hunting and fishing come to mind when we think about natural resources, these things are actually secondary.  What comes first is broader in scope: what comes first is how this department is making Ohio a better place to work, live and raise a family.

Under this bright light, we know that our job is not to turn Ohio into a pristine nature preserve.  Our job is to keep Ohio working and growing while recognizing that our land, water and air can only give so much, and can only recover so quickly.

Therefore, we are managers.  And as the competition for resources grows the importance and impact of what we do will grow.

At question in everything we do is the relationship between conservation and development.  I like to think that it is the difference between making progress quickly and making progress recklessly.

We see our role as providing the tools and foresight to create the most progress for the most people, for the longest time possible.  This department will never be against progress.  But, we will act appropriately against short-sighted, short-term progress.

ODNR's relation to Ohio's future can even be compared to that of a cofferdam; it keeps it from all rushing recklessly forward at once and leaving all of Ohio like a clear-cut forest or a stripped-down hillside.  Creating short-term profit but leaving nothing, with nothing at all left for future generations.  Leaving us in a place where there is scarcity without demand the exact opposite of wise use.

Even further, looking ahead, if this department's effectiveness is to be judged, I hope it will be judged on its ability to show that any sound development, any development that is good for Ohio, will not happen at the expense of conservation, it will happen because of conservation and in cooperation with it.

Beyond the existing budget items to be discussed, we are also planning on finding new ways to coordinate with the Office of Travel and Tourism to market Ohio both inside and outside the state.

As part of this, we will enlist the department's parks and preserves in the fight against childhood obesity, we will promote ecotourism, encourage activities for entire families and help build a new recognition of the bond between access to green space and Ohio's overall quality of life.

Other new initiatives will be pursued in the rapidly changing field of energy, and especially, carbon energy resource management.  In the new arena of renewable, sustainable energy, we believe Ohio is in a unique position to serve as a leader and beneficiary, and we have no intention of being left behind.

Through the budget in front of you, we will continue to expand on the work already being done.  We will increase the role of the department in making Ohio a better place to live, work and raise a family.  The resource management provided by ODNR is as essential to development as is the health of our land, our water, and our air. We will show that the sound management of our resources is not only the right thing to do morally; it is the right thing to do economically.

Proposed Budget Background

The Executive Budget proposal recommends a General Revenue Fund budget of $129.7 million in FY 2008 and $129.4 million in FY 2009.  Over the biennium, these figures equate to a flat budget, when including debt service, for the department when compared to FY 2007. 

As proposed, this budget provides adequate funding to maintain existing programs and services.  This is an advancement considering the department's recent funding history.  Further, it is unrealistic to expect additional funding cuts not to be noticed by the public.

For example, between 2000 and 2007, the department's effective GRF funding was reduced 12.8% including debt.  Similarly, the Department's staffing levels have decreased 17.3% during that same time period.

 

Certainly, this reduction has led to more innovation and efficient management while continuing to meet the public's expectations of our department.  To date, the department has done an excellent job at absorbing the funding cuts in ways that the public would not immediately recognize.    

Simply stated, though, the department cannot sustain additional budget reductions and remain responsive to the public it serves.  Furthermore, additional budget reductions would stunt the ability of the department to help the state move forward with local economic development efforts, find new energy sources, and provide recreational opportunities to draw outsiders back into the state.  The following is a summary of ODNR's budgetary highlights and impacts.  The budget, as proposed, will allow ODNR to continue providing services and programs that improve the quality of life for all Ohioans, and further cuts would not meet the public's expectations.

Economic Development Initiatives

Central Support: The lynchpin of the department's proposed budget is the increased level of Central Support funding (ALI 725-401).  The Executive Budget proposal turns what has often been an item of contention into a positive for the department.  In the past, department stakeholders have assailed Executive Budgets for not providing enough Central Support funding.  In turn, these stakeholders launched strong legislative lobbying campaigns to ensure the Legislature found the funding.

Additionally, the stakeholders who pay for watercraft licenses, camping and dock fees, tree seedling sales and similar revenue generating items want to see that revenue go directly towards programs and services that benefit the user. 

It pleases me to state before you today that this Executive Budget fully covers the traditional GRF portion of Central Support and protects the integrity of user generated revenue collected across the department.

By doing so, the proposed Central Support funding makes an investment across all divisions towards building new energy strategies for the state, enhancing our visitors and users experiences, and strengthening the department's ability to provide economic decision makers with ready access to crucial data.  This investment will allow the divisions to absorb salary increases without losing the personnel necessary to make the department responsive to its public and industrial customers.  Through this line item, the amount that each division pays with dedicated funds for Central Support will be reduced by approximately 25 percent, and at the same time, we have taken steps to reduce Central Support costs.

For example, we project the Division of Mineral Resources Management to save over $160,000 in each year of the biennium in Central Support costs.  This will allow Mineral Resources Management to meet the objectives established in last year's HB 443 without losing staff and continue to be timely in permit turnaround and innovative in providing new electronic tools for industry to use in advancing their businesses.

Similarly, State Parks would save over $550,000 each fiscal year to help manage the large deferred maintenance backlog it has across the state.  Now estimated at approximately $300 million dollars, this backlog prevents our parks from providing the ever increasing demands the public has for our facilities, and in some cases poses health and safety risks.  This budget proposal helps to address these items in a fiscally manageable way for the state right now.

Ethanol, IGCC, & Synfuel

The Division of Geological Survey recently announced a new test well for carbon sequestration.  Research conducted at this site will aid the development of more ethanol plants, Integrated Gasification Combined Cycle power plants, and synfuel plants (e.g. coal-to-liquid). Those industries generate pure streams of carbon dioxide, a greenhouse gas that will most likely be required to be sequestered in some manner. By learning how Ohio can develop deep well sequestration technology, the state will be positioned to establish new plants and possibly generate revenue from carbon credit trading. Further, the Division of Water will help these projects identify and safely use reliable sources of large quantities of high quality water necessary for production.

Other key ways the Central Support funding helps advance economic development:

• Division of Forestry would save over $116,000/year to help individual landowners manage their forest properties for long-term health and revenue, and establish Forest Stewardship Council/Sustainable Forestry Initiative certification to make Ohio timber more marketable.
• Division of Geological Survey would save over $30,000/year to take a leading role ensuring Ohio's energy future through new or under-utilized technologies like carbon sequestration and enhanced oil recovery.
• Division of Watercraft would save over $130,000/year to improve boating access across the state to help develop recreational tourism for local communities.
• Division of Real Estate and Land Management would save over $50,000/year to ensure timely local grant delivery.
• Division of Soil & Water would save over $50,000/year to deliver technical assistance to local districts.

House Bill 443:  While this omnibus legislation affected a broad array of the department's work, most notably it changed many coal mining related programs.  The Division of Mineral Resources Management is currently working with stakeholder groups to implement these changes.  This stakeholder process will be similar to that pioneered by the division for the implementation of recent urban gas well drilling legislation, generally regarded as successful by all stakeholders.  I mention this not only to provide an update on this process, but also to emphasize, again, the importance of the proposed Central Support line item funding.  Without the Central Support funding, it will be difficult to implement the coal mining rule changes in a timely manner, slowing down an industry critical to Ohio's energy production and economic development.

Division of Recycling & Litter Prevention: In the previous biennial budget bill (FY 2006-07), the General Assembly moved forward with significant changes to the Division of Recycling & Litter Prevention.  While there was certainly a transition period for the division, it is beginning to fill a strong need for the state.  No longer is the emphasis of its efforts long-term local education and prevention programs.  Rather, the division is focused on providing value to short-term individual, innovative projects.  You may be familiar with the division's support of emerging new technologies like reusing used scrap tires to resurface roads, or diverting organic waste from landfills for profitable development as mulch.  Advances like these can help move Ohio forward environmentally and economically.

Building Local Economies: The department administers more than 30 separate grant programs that provide financial assistance to local governments, educational institutions and community-based organizations as well as private citizens who commit to good conservation practices on their lands.  In many instances, these grants directly add to a community's economic development, or fit into a community's plan to leverage their natural resources for other economic opportunities.

	Hancock & Marion Counties
	SWCD local match will help the state continue to work with local SWCD partners to implement the state's three Conservation Reserve Enhancement Programs: Lake Erie, Big Walnut, and Scioto River.  These voluntary CREP programs help landowners address water quality protection in 50 counties, including the Maumee Watershed in Hancock and Marion Counties, among others.

Protection & Restoration Initiatives

Soil & Water State Match: The Executive Budget also addresses this important local grant program.  Soil and Water Conservation Districts exist in all 88 counties of the state.  These local Districts are key "foot soldiers" in providing clean water to the citizens of Ohio through landowner conservation practices.

Through the state grant, local districts match county funding to meet their obligations.  The Legislature worked hard during the last biennium to provide additional resources from the state for this matching grant. 

This proposed budget further increases the available state funding for match by almost $700,000, or 6.7%, from FY 2007.

Factoring in the expected increase in the amount of local match applied for across the state, this funding will equate to an 84.6% match rate in FY 2008 and 81.1% in FY 2009 if no earmarks are added.

State Parks = Economic Impact

Visitors to Ohio State Parks contribute a significant level of spending in Ohio's economy, mainly through local community businesses food; gas; supplies; sporting and recreational equipment; local souvenirs, crafts, antiques; historic sites and museums; canoeing, skiing, horseback riding and other area activities and attractions. According to a 2004 Ohio State University study, people visiting Ohio State Parks contribute an estimated $1.1 billion to Ohio's economy annually. Meanwhile, Ohio State Parks are the third most visited park system in the nation with about 50 million visitor occasions per year.  According to a 2002 Ohio Poll conducted by the University of Cincinnati, more than 83 percent of all Ohioans have visited at least one state park at sometime.  And 42 percent of Ohio households visited at least one state park during the previous year according to the 2004 OSU study. Recognizing that the better maintained a park is, the more visitation it will generate, the Division of Parks & Recreation intends to use its Central Support savings on projects in its maintenance backlog. Parks such as Buckeye Lake, Cleveland Lakefront, East Fork, Indian Lake, Van Buren, and Hueston Woods all have maintenance needs.

Private Action for State Facilities: As mentioned during the FY 2006-07 budget bill deliberation, the Division of Parks and Recreation is benefiting from the private action of many "Friends of Parks" groups across the state.  These groups of dedicated volunteers have taken on increasingly beneficial projects throughout the State Park system.  Many parks have directly benefited in capital improvements, park user access improvement, and even private fundraising.

The concern, by both department personnel and the friends group volunteers, is that if the state continues to cut personnel for maintaining State Park facilities, the volunteers would be providing more than just special amenities.  As volunteers take on more of this work, not only can they become worn out, but they begin to question the state's commitment to these areas.  It becomes increasingly difficult for a volunteer to justify spending his or her private time and expense on a resource he or she does not perceive the owner to properly care for.

So while we are endlessly thankful to the friends groups, we want to ensure their continued involvement and dedication to our facilities by providing a level of support worthy of their enthusiasm.

State Park Energy Efficiency: Though not a part of the Executive Budget, I feel it necessary to add that the department, for the first time, is seeking federal funding opportunities to update our State Park lodges and facilities to address our maintenance backlog and increase the older buildings' energy efficiency, which would add up to long-term utility savings for the state.  While this first attempt may not prove successful, I mention this as a demonstration of our effort through as many avenues as possible to address the state parks maintenance issues.  We fully expect to pursue this, and other options, in the future.

Division of Natural Areas & Preserves: DNAP is one of two divisions slated to receive a minimal funding increase under the Executive Budget.  This heavily GRF dependant division has seen more proportional cuts under recent budgets than most.  This division provides an extensive database of rare and endangered species, called the Natural Heritage Database, that has aided in the planning and development of countless infrastructure, housing, and retail development projects.  The Heritage Database helps avoid conflicts with species before it becomes expensive for a project to mitigate the damage.  To avoid a darkening budgetary imbalance, and a severe reduction in service, the Executive Budget allows the division to cover collective bargaining costs over the biennium.

Ashland County Economic Recovery

Communities and businesses along the Mohican River had great support for the Division of Natural Areas & Preserves' designation of the Mohican River as a State Scenic River. In the summer of 2006, severe flooding damaged the canoe and camping industry along the Mohican River near Loudonville.  These local businesses hoped to use the "Scenic River" label to market the river as healthy and safe for tourists to come and enjoy the region's fishing, camping, canoeing, and hiking.  That December, those businesses received assistance from the Division of Travel & Tourism to publish material promoting the Mohican as a Scenic River.

Lake Erie Drilling Ban: Not long ago, Lake Erie was considered a dead lake.  A tremendous amount of work from a diverse set of public and private partners have brought the Lake back to become an economic and recreational engine for the State of Ohio.  The sport fishery alone contributes approximately $700 million to the state economy.  Multiply this impact by the number of recreational boats, jetskies, waterskies and the like, plus the restaurants, hotels, and tourist destinations centered on Lake users, and it is clear why the Lake is vital to the state's economy.

There may be legitimate reasons to consider oil and gas drilling under Lake Erie.  However, the risks outweigh the benefits, and just one accident could be devastating to both our economy and to one of Ohio's greatest natural resources. 

Therefore, to protect the Lake's ecology and economy from any accidents, the Governor has proposed language mirroring federal law banning oil and gas drilling under Lake Erie.  This will allow the state to control this natural resource should Congress change its mind.  Furthermore, changing the law in this manner would be an extension of Governor Bob Taft's Executive Order banning Lake Erie drilling, which expired at the end of his term.

So, we propose adopting this ban to secure the state's lake economy, and the state's tax revenues from it, for future generations. 

Technical Changes

Division of Geological Survey/Lake Erie Group: A shift is contained in the Executive Budget to merge the Lake Erie Group (misnamed "Office of Coastal Management") back into the Division of Geological Survey.  While this merger is not expected to change budgetary figures for either Geological Survey or the Lake Erie Group it does explain the perceived increase in the Division's GRF appropriation and zeroing out of the Group's GRF.

Building Membership: As the department looks to enhance our stakeholders' recreational requests, we would like to establish niche membership groups to meet these requests and build youth education programming for the next generation of natural resource users.  Language additions in the Executive Budget enable the establishment of such voluntary membership groups.

Conclusion

The department's mission is to carefully balance the state's protection and wise use of its bountiful natural resources.  I believe the Executive Budget before you presents a positive way forward to meet those goals.  It is a carefully crafted proposal that will allow our agency to aid key energy industry advances, enhance local economic development, and provide families with affordable recreational opportunities.

Your guidance and support in implementing our initiatives are necessary and welcomed.  My staff and I look forward to working with you in finalizing the Department of Natural Resources' FY 2008 2009 biennial budget.  I would be more than happy to respond to any questions you may have, or provide any desired written follow-up information after today.