The Endangered Species Act’s listing budget, which funds federal agencies’ ability to review petitions and decide whether species should be listed or delisted, is chronically underfunded. And the most recent budget proposal suggests that the situation is about to get worse, not better. The perennial funding shortfall has a political explanation and an economic one.
It should be no surprise that the political process does not prioritize the funding of this program. Spending tens of millions of dollars on bureaucrats generating paperwork, without any measurable benefit to voters, doesn’t really move the political needle. Failing to support a larger listing budget has almost certainly never cost a politician her job—don’t forget that politicians are primarily in the business of being reelected—and may have never even determined how a single individual voter cast her ballot. No wonder politicians don’t prioritize increases to this funding.
Compounding the political problem, the petition process is almost certainly too cheap. There’s no filing fee, so the only cost to file a petition is the cost of preparing it. With modern word processing and e-filing, that isn’t much. And yet by filing a petition, anyone can trigger a process that is very expensive for the agency. The U.S. Fish and Wildlife Service estimates that it costs approximately $140,000 to respond to a petition, and another $300,000 to list the species and designate critical habitat.
Predictably, the consequences of setting the price of petitions low has been a deluge of petitions. The U.S. Fish and Wildlife Service has been repeatedly overwhelmed by waves of listing petitions including, until recently, petitions calling for the listing of hundreds of species at a time. If funding increased, it’s unlikely the demands on that funding would remain the same. It’s likelier that the number of petitions would increase, because faster response times would make petitioning more attractive. Gary Frazer, Fish and Wildlife Service’s Acting Director for Endangered Species in 2011, put it well: “Managing the service’s listing program is a story of limited resources and an unlimited workload.”
The Endangered Species Act is not unique in this respect. Agencies have had to grapple with similar problems under other statutes and their solutions may signal a way to resolve the perennial political conflict over the listing budget.
For decades, the Food and Drug Administration struggled to keep up with new drug applications. The slow process cost drug developers’ tens of millions of dollars and delayed patients’ access to life-saving medications. Yet the FDA’s budget to review new drug applications was chronically underfunded; pleas to Congress fell on deaf ears.
Unsuccessful in the political process, FDA advocated a shift toward greater applicant fees to cover the costs of review. Initially pharmaceutical companies were adamantly opposed, recognizing that this would mean paying for something they used to get for free (albeit after a protracted delay). Ultimately, the agency was able to convince industry to go along with the plan, on the condition that the money generated supplement federal spending rather than replace it.
Under the Prescription Drug User Fee Act, drug manufacturers pay higher fees to expedite review of their applications and Congress committed not to decrease its own funding of the process. The results were significant. Within five years, FDA was able to increase its staff reviewing applications by 77% and the median approval time dropped from 27 months to 14 months. Today, industry is a strong advocate for the reform, supporting several reauthorizations despite increases in the amount of the fee.
What if the Endangered Species Act allowed petitioners to pay additional fees to expedite review of their petitions? As with pharmaceutical companies, any proposal to increase fees would undoubtedly be met by howls from petitioners. When the Obama Administration proposed reforms to the petition process, many activist groups cried “poverty” asserting that the relatively minor changes—petitions would have to focus on a single species and be forwarded to state agencies—were a nefarious plot to prevent plucky citizen-scientists from participating in the process. (Ironically, those arguments were made mostly by organizations with annual budgets measured in the tens of millions.)
Concerns about making it too expensive for ordinary people to participate in the petition process are easily addressed by making the increased fees voluntary in exchange for an expedited review process. The U.S. Fish and Wildlife Service could commit to resolving petitions by the deadlines set forth in the Endangered Species Act (90-days for an initial decision and 12-months for a final decision) for any petitioners who pay the full cost of that review. Everyone else would be treated the same way they are now: their petition will be reviewed according to the agency’s priorities and subject to the funds made available by Congress.
So long as Congress commits to not reduce funding levels in response to the reform, everyone should be made better off. Petitioners willing to pay the higher fee obviously benefit because they will get a decision much faster. And those who are not will also benefit because Congress’ funds will be stretched across fewer petitions (assuming at least some petitioners pay the fee).
Why would anyone pay the higher fee if they could just wait in line like they are now? Some petitioners might do it for the same reason pharmaceutical companies do. Industry petitioners who want a species delisted because it has recovered or was errantly listed in the first place might pay to expedite the process if the cost is less than what they stand to lose from delay.
Environmental groups too might be willing to bear this costs in some circumstances. If a species is facing a significant, immediate threat of extinction, the increased fee may be preferable to the consequences of delay. Expedited review of popular species may present opportunities to fundraise to cover the higher costs. And the fee might be worth it to prevent an imminent development project that a group wishes to stop, whether because of its impact on a species or for other anti-development motives.
Assigning a more accurate price to listing and delisting petitions could substantially help overcome the listing budget’s interminable funding problems. It could also help to prioritize agency decision making in ways that would be beneficial. If people pay higher fees because a species’ errant listing imposes economically harmful burdens or because protections are urgently needed to prevent a species’ extinction, prioritizing those petitions would be socially beneficial.