As part of our review of the economic downturn’s effect on green building, on Monday we looked at private projects that have cut LEED certification due to associated costs. Today, we move from private projects to public projects. Despite this shift, the theme is the same: the economic downturn will result in less public projects pursuing LEED certification. Want proof? In the same Gazette.Net article cited to on Monday, one Maryland public project has already abandoned LEED certification:
A Frederick County Public School project, the Earth and Space Science Lab at Lincoln Elementary in Frederick, also had registered for LEED certification. Directors withdrew from the process in the spring, realizing it could not meet the standards without incurring additional costs.
This blurb got us thinking here at Green Building Law Update: what will happen to all of those states that passed regulations requiring public projects achieve LEED certification? As you probably know, during economic downturns, less taxes are collected, which affects state budgets. Maryland, which has an estimated budget of deficit of $248 million heading into 2009, is a great example:
Gov. Martin O’Malley directed state agencies yesterday to look for budget cuts of up to 5 percent that could include layoffs or unpaid furloughs for state employees, as he seeks savings in this year’s budget and prepares a spending plan for next year. An economic downturn has cut tax collections, so O’Malley must make cuts for the fiscal year that began in July to keep the $14 billion operating budget in balance, as required by law.
One area where state agencies may seek budget cuts is through green building programs. For example, the Maryland Green Buildings Tax Credit (you may remember this from the Shaw Development case) has yet to be renewed in 2008 and it seems unlikely to be renewed in the face of the state’s huge deficit. Additionally, Governor Martin O’Malley signed Maryland’s High Performance Buidings Act on April 24, 2008, which requires construction or major renovation of public projects to achieve green building certification through LEED, Green Globes or an equivalent green building system unless a waiver is obtained. If agencies are asked to cut 5 percent from their budgets, it’s not a stretch to imagine agencies using waivers to eliminate green building certification and the associated costs.
Obviously, Maryland is not the only state with a major deficit that has now been hit by the economic downturn. It will be interesting to see Maryland and other states manage the green building certification process in face of state deficits.
- Developers Cede LEED Label for Savings (Gazette.Net)
- State Budget Troubles Worsen (Center on Budget)
- O’Malley Calls for 5% Cuts in State Agencies’ Budgets (Baltimore Sun)
- Maryland Green Buildings Tax Credit (Maryland Govt.)
- Maryland’s High Performance Buildings Act (Maryland Govt.)