Gov. Phil Scott’s long-term plan for clean water funding may have gotten a chilly reception in Montpelier, but the administration’s proposal has received a tentative stamp of approval from the federal agency overseeing Vermont’s pollution-reduction efforts.
The Environmental Protection Agency issued a letter Monday saying the governor has put forward "a sensible framework that, if adopted" by the Vermont Legislature, would satisfy the federal "requirement to identify a long-term funding source” for clean water improvements.
“This is enormously important to us,” Secretary of Natural Resources Julie Moore said Tuesday. “We’ve been putting a lot of time and effort into developing what we believe is a robust framework for doing the work. But ultimately EPA’s approval is essential to knowing that we’re able to check that last box on our report card, and have their buy and support for the proposed plan going forward.”
The EPA has ultimate authority over many of the clean water initiatives unfolding in Vermont. The federal agency has ordered the state to develop a concrete and specific plan to fund the more than $2 billion it will cost to remediate elevated phosphorus levels in Lake Champlain and other polluted waterways.
Scott delivered a plan in his budget address last month that satisfies those funding requirements, but accomplished the task largely by reallocating money from elsewhere in the state budget.
Scott wants to use money from the estate tax, property transfer tax and capital bill to help generate the $50 million to $60 million Vermont will need annually over the next 20 years to satisfy EPA requirements.
But Democratic lawmakers have said drawing on existing revenue sources could undermine funding for other key government programs. Moore said the administration acknowledges the plan will put a drain on the general fund.
“But we believe it’s a manageable impact over time … particularly given the organic growth that Vermont’s economy is enjoying right now,” Moore said.
The governor’s long-term water funding plan includes:
- $15 million a year from the property transfer tax
- $8 million to $11 million a year from the estate tax
- $2 million a year from unclaimed beverage container deposits
- $10 million to $12 million a year from the capital bill
In the EPA’s letter to the Scott administration this week, Acting Regional Administrator Deborah Szaro said, “Vermont’s proposed framework would establish a long-term funding source” that “is consistent with estimated needs.”
Ken Moraff, director of the Office of Ecosystem Protection at the EPA’s Boston offices, said the federal government is looking for a number of criteria when examining a funding plan.
“Is it adequate funding to do the work that’s needed to clean that lake? Is that funding stable over time? Is it dedicated to the clean water work?” Moraff said. “We’re really looking for an amount of funding and a funding mechanism that’s really going to be stable and that people can rely on to get the job done.”
And Moraff said Scott’s proposal checks all those boxes.
“So all of those things together to us add up to a proposal that, if it’s adopted, really does appear to meet the requirement for long-term funding,” Moraff said.
According to the recent letter from Szaro, the EPA won’t make an official determination on the adequacy of Vermont’s plan until it issues its next “report card” later this year.
Addison County Sen. Chris Bray, who chairs the Senate Committee on Natural Resources and Energy, said Tuesday that affirming words from the EPA are a positive development. But, Bray said, he and other Senate lawmakers are reluctant to pull existing revenues from other government line items.
He also said the estate tax is a volatile revenue source that can’t always be counted on to deliver the needed water quality funds.
Bray said he expects his committee to pass legislation in the next week that uses two new revenue sources to fund water cleanup: a per-parcel fee on every landowner in the state, and an “impervious surface” fee on select developments.
“There are parcels that deliver a far larger adverse water-quality impact into rivers and streams than others, so that’s where the impervious surface fee comes in,” Bray said.
While that proposal may have majority support in the Senate, the per-parcel fee has struggled historically to win support in the House. It’s unclear at this point what alternatives House lawmakers may put forward.
Jon Groveman, water program director at the Vermont Natural Resources Council, is among the clean water advocates who will be pushing lawmakers to find an alternative to Scott’s plan.
Groveman said the governor gets credit for putting a plan on the table.
“The things that we like are that he’s acknowledging that we need to have revenue, and he’s in the ballpark in terms of the minimum amount of revenue needed … And I think that it is creating at least a plan to get money out there on the ground to projects,” Groveman said.
But Groveman said the source of the money may be problematic.
“This is existing revenue that goes into the general fund that funds all other kinds of programs, not just environmental programs,” Groveman asid. “But we rely on every penny of money for all the different important programs that exist out there. We still are going to advocate for a new source of revenue that’s stable, that has some nexus to pollution, that doesn’t take money away from existing programs.”
EPA will have the last word on the sufficiency of Vermont’s funding plan, and if it doesn’t pass muster, the federal agency could require extremely costly upgrades of municipal wastewater systems — an outcome both the governor and lawmakers are intent on avoiding.
Update 4:24 p.m. This post was updated to include comments from Moraff, Bray and Groveman.
Disclosure: Vermont Natural Resources Council is a VPR underwriter.
