The spirit of George Orwell must have been hovering over House and Senate conferees when they drafted the state environmental budget. “Reorganization through Reduction” is the very gentle term budget writers used to tell NC Department of Environmental Quality Secretary Michael Regan to do a very dirty job: Find $1.9 million in savings over two years — somewhere.

Lay off employees, scale back programs, use fewer paper clips, whatever it takes.

At $77 million in the first fiscal year, the DEQ conference budget, unveiled yesterday at 11:10 p.m. by the House and Senate conference committee, is more generous than the Senate version — a low bar, indeed. It is stingier than the House‘s and it falls far short of the $84.8 million appropriation that Gov. Roy Cooper had recommended.

The second fiscal year is even leaner for DEQ, just $76.8 million, after the Reorganization program concludes.

“The budget cuts core functions beyond the bone,” said Grady McCallie, policy director for the NC Conservation Network. “And it will leave our rivers, lakes and drinking water sources exposed to more pollution while threatening the ability of DEQ to adequately inform the public about environmental health risks.”

The DEQ budget also contains a policy report, which also places further fiscal limitations on the agency. This document includes restrictions on the allocation of Volkswagen Settlement Funds. North Carolina is due $87 million — certainly not chump change — from a federal lawsuit against the car maker because it cheating on its diesel emissions tests. The state can use the money on projects that will reduce air emissions from cars, trucks and trains. But the conference budget requires the General Assembly, not DEQ or the Department of Transportation, to approve distribution of those funds. Lawmakers, undoubtedly, will want some of that money spent directly in their districts on pet projects.

Speaking of pet projects, the budget’s big winners: SePro, the chemical company whose powerful lobbyist Harold Brubaker has convinced lawmakers to spend $1.3 million on a sketchy algae-killing treatment for Jordan Lake. The City of Havelock, inexplicably jumps to the front of a very long line of needy projects and receives $1 million to “repurpose” the old Phoenix recycling site.

The budget’s semi-winners: Oysters, which will receive $1 million in recurring funds for necessary sanctuaries. Twenty-nine DEQ employees, including Chief Deputy Col. John Nicholson, whose jobs were saved from the Senate guillotine. NC A&T and Appalachian State universities, who can keep $200,000 each for energy research. (Check back on Thursday for a larger story about rearrangements to the state energy office and general provisions to the energy portion of the budget.)

The budget’s losers — and this is just the short list: NC State University’s energy program, whose funding was eliminated. The myriad other ways DEQ touches North Carolinians lives: fortifying coastal communities’ response to climate change, consistently monitoring water quality in the sounds, protecting people — usually low-income and minority neighborhoods — from contamination in old landfills. And the 16-plus DEQ employees, including seven in the vital regional offices, where much of the permitting takes place. They will have to pack their desks if the cuts survive the full House and Senate votes. Not to worry, lawmakers say, it’s only a reorganization.