By John Flowers, Addison Independent
Debate in Montpelier surrounding efforts to clean up the state’s waterways has been surging like the Otter Creek in April, but legislative action on funding for those efforts has been moving at a glacial pace.
With that in mind, Sen. Chris Bray, D-New Haven, is suggesting Vermont adopt a per-parcel fee that would yield $18.8 million of the estimated $30 million the state will need to raise during each of the next 20 years as its share of a federally mandated, $2.6 billion cleanup of Lake Champlain and related waterways.
Federal authorities regularly call upon states to develop “Total Daily Maximum Load” (TMDL) thresholds for their impaired waters. TMDL identifies the maximum amount of a pollutant that a body of water can receive while still meeting water quality standards.
The Clean Water Initiative of 2015 (Act 64) aims at addressing federal concerns. While state officials have zeroed in on the water quality problems and potential solutions, they have yet to agree on a 20-year funding plan for the work that needs to be done. Individual lawmakers have sought to protect their respective constituencies as much as possible from the sticker shock. Business groups have lobbied against suggestions the commercial sector bear a larger proportion of the water quality improvements. Farmers have also voiced concern about being targeted as a result of fertilizer runoff. And Gov. Scott has made clear his disdain for any increases in broad-based taxes or fees.
The Legislature this past session created a six-member working group on water quality funding, through Act 73. Chaired by Secretary of Natural Resources Julie Moore, the group was tasked with evaluating existing resources and drafting legislation “to establish equitable and effective long-term funding methods to support clean water efforts in Vermont.”
Lawmakers also approved an advisory council to assist the working group, which released its report on Nov. 15, which can be found at tinyurl.com/yam27hrz.
The panel offered five recommendations, including:
• Use existing state revenues and resources to fund clean water through fiscal year 2021.
• Allow clean water priorities “to guide how costs are shared across sectors.”
• Establish approaches for collecting revenue and delivering services that are “environmentally efficient and cost effective.”
• “Pursue technological and regulatory innovation – including commoditizing phosphorus, developing flexible financing, and leveraging integrated planning and permitting models.”
• “Commit to adaptive management.”
Bray, who chairs the Senate Natural Resources & Energy Committee, commended the working group’s efforts, but noted the panel fell short of fulfilling its mission.
“What they came back with is, ‘Here are some things we think the Legislature might want to look at,’ but no recommendation,” Bray said. “To be direct about it, they did not meet the charge that was given to them.”
Bray plans to introduce a per-parcel fee in a bill he will file next month when the 2018 legislative session gets under way. The per-parcel fee, Bray reasons, epitomizes the General Assembly’s consensus of “everybody in, everybody pays” when it comes to a critical, universally used resource like water.
One dollar per week
There are roughly 360,000 land parcels in the state, according to Bray. A statewide per-parcel tax of one dollar per week – $52 per year – would yield $18.8 million annually, according to Bray.
Combining that amount with another $12 million each year from the state’s capital bill would yield what Bray calls Vermont’s annual $30 million “lift” for water quality programming.
“Towns already have a list of all the parcels in town and send people bills,” Bray added. “This bill says, per parcel, let’s collect the money through that [local tax] bill.”
Bray’s bill would also create a new state utility that would determine financing and programming for Vermont’s clean water efforts going forward.
That utility, Bray said, could adjust the fee so that it applies more rigorously to parcels that tend to be most responsible for water pollution, including parcels with large parking areas, buildings with expansive roofs, and farmland close to waterways.
A 10-year veteran of the Legislature, Bray is prepared for some criticism of his proposal. Talk of raising revenues is always unpopular – especially now, during tough financial times. The Vermont Agency of Administration’s budget report for October indicated cumulative General Fund revenues were down $12.43 million, compared to the same time last year.
Bray’s plan has met with skepticism from some members of the working group.
The working group acknowledged Bray’s suggestion that the fee be added as a line item to existing bills, but is not sold on the idea.
The group considered four options for administering either a per-parcel fee, or an impervious surface fee. Those options included billing/collection done by the municipality, state, “parallel systems,” or by a local or regional storm water utility.
The state of Vermont already pays communities a combined total of more than $5 million for help in collecting the statewide education property tax so collection of a separate fee could exact a similar toll, according to the working group’s report.
Group members also considered a Vermont League of Cities & Towns estimate that it could cost between $1.76 million and $6.775 million to create a new storm water billing system in each of Vermont’s 246 municipalities.
“It was mentioned that placing a storm water fee as a separate line on existing property tax bills could be a less-costly option, result in higher compliance rates, and could be paid through escrow accounts resulting in less paperwork for property owners,” the report states. “However, since a storm water fee is not a tax, it was also noted that placing a storm water fee on property tax bills may cause confusion.”
Other funding options
“Based on the current set of assumptions about the amount of revenue that needed to be raised, we were concerned that the administrative fees could be disproportionately large,” Moore said during a Tuesday phone interview “We were assuming the revenue target was on the order of $20 million to $25 million, based on work documented in the treasurer’s water quality funding report … We found the administrative costs could run as high as 20 or 25 percent of the total amount of revenue that needed to be raised.”
The working group has recommended a deeper dive into how a storm water fee could be collected at a lower administrative cost, according to Moore.
In the meantime, Moore believes Vermont will be able to meet its clean water initiatives through 2021, using funding from the property transfer tax, the state’s capital bill, and revenue through what she described as “some competitive federal grant opportunities.”
Moore added Vermont could soon receive more than $5 million annually as an impact fee from the TDI Clean Power Link project that calls for installation of electric power lines under Lake Champlain.
She also believes state officials could use more time to map out specific water quality programs.
“We think there’s a need to think further about service delivery, so we’re not just raising the money, and have a better idea of what you’re going to do with it once you’ve raised it,” Moore said.
Photo by Trent Campbell, Addison Independent
Sen. Chris Bray, D-New Haven, is proposing a per-parcel fee to help pay for Vermont’s share of federally mandated water quality improvements during the next 20 years.