For a while Wednesday afternoon, it looked as though the Vermont Senate had resolved one of the trickiest issues of the 2017 session: a way to pay for a $35 million housing bond that didn’t take money from other programs and seemed acceptable to Gov. Phil Scott. The Senate passed the plan, included in S.100, the housing bond bill, on a unanimous voice vote after little debate.
“We’re absolutely thrilled at the Senate’s action,” said Erhard Mahnke of the Vermont Affordable Housing Coalition. “This will be a great shot in the arm for affordable housing.”
Within a few hours, the bloom was off the rose. The funding mechanism, attached as an amendment to S.100, had alienated a coalition of environmental groups. They said the plan would divert money from cleanup efforts on Lake Champlain and Vermont waterways. Key senators suddenly seemed disinclined to claim credit for the idea.
“It wasn’t my amendment,” insisted Sen. Richard Westman (R-Lamoille), who had reported the amendment to the full Senate. “It was an Appropriations Committee amendment, and I was the reporter for the committee.”
Because Westman was the official reporter, environmentalists blamed him for the plan. He quickly acquired the nickname “Dirty Water Westman.”
What was all the fuss about?
Back in his January budget address, the governor called for a $35 million bond to boost affordable housing. The idea met with near universal praise. But nobody could agree on how to pay the annual $2.5 million cost of the bond.
Well, there was fairly quick agreement that $1.5 million would come from the Vermont Housing and Conservation Board. The other $1 million, however, was a sticking point.
With the end of the session looming, the dispute threatened to derail the entire housing bond plan. Then, on Tuesday afternoon, a solution was brought to the Senate Appropriations Committee: a new funding mechanism proposed as an amendment to S.100.
The mechanism takes a bit of explaining, so strap yourself in.
Two years ago, when the legislature made its first attempt to tackle waterways cleanup under threat of sanction by the U.S. Environmental Protection Agency, it created a Clean Water Fund. The designated funding source was a surcharge of 0.2 percent on property transfers, which raises about $5 million a year.
The surcharge was set to expire on July 1, 2018. The intention was to identify a longer-term funding source by then.
OK, that’s the background. The amendment to S.100 would do three things. First, it would extend the surcharge for an additional year, until July 1, 2019. Second, in each of the next two years, $1 million would be applied to the housing bond — leaving the Clean Water Fund with roughly $4 million each year. And lastly, the surcharge in 2019 would be reduced to 0.04 percent and extended until the year 2039. The revenue, an estimated $1 million a year, would be used to pay down the housing bond.
“What that will do for the Clean Water Fund is give them $4 million more in the second year than they would have had,” explained Westman.
The plan was approved by Appropriations on Tuesday, by the Senate Finance Committee and by the full Senate on Wednesday, all on unanimous votes. The whole process took less than 24 hours from start to finish.
The bill was on its way to the House, which would have to concur with the amended funding mechanism. Seemed like a slam dunk. It even passed muster with the governor.
“It certainly has some promise,” Scott said of the amended S.100. “That’s something that I would look at favorably.”
Hey, let’s all sing “Kumbaya.”
The amendment had been devised by “a group from the House and Senate,” according to a very laconic message to me from Senate President Pro Tempore Tim Ashe (D/P-Chittenden), who was too busy on Wednesday attending to his senatorial duties to conduct an interview about the amendment.
Or maybe he knew the shit was getting close to the fan.
Because when environmental groups got wind of the amendment, they were not in a singing mood.
“We’re getting the short end in a big way, and we’re not happy about it,” said Jon Groveman, policy and water program director for the Vermont Natural Resources Council.
Groveman’s take: The argument for the Senate’s amendment is grossly misleading, and the waterways cleanup is getting the shaft.
It’s true that the transfer tax surcharge is getting an additional year in the Senate bill, and that means $4 million more for the Clean Water Fund.
Here’s the thing: According to Groveman, the extension of the transfer tax surcharge had already been proposed by Scott and by State Treasurer Beth Pearce in her waterways cleanup plan. And it had previously been approved by the House.
And all the money would have gone to the Clean Water Fund.
“We look at it that the Senate’s taking it away,” said Groveman. “They’re not giving us more money, they’re reducing the money from what the governor recommended, what the treasurer recommended and what the House passed.”
Groveman said he first heard of the Senate amendment on Wednesday morning.
“It was not in any bill, it was not noticed anywhere, there were no hearings about it,” he said. “It’s pretty clear that they wanted to get this through quickly.”
The VNRC is part of a coalition advocating for a robust waterways cleanup plan. Other members include the Conservation Law Foundation, the Sierra Club, the Nature Conservancy, the Lake Champlain Committee and Lake Champlain International.
The groups scheduled a meeting for late Wednesday to discuss strategy. They hope to put pressure on the House not to concur with the latest version of S.100. The legislative session is still scheduled to end on Saturday, so time is running short to pass the Senate version or find another funding solution lickety-split.
Or let the housing bond die a disgraced, bloody death.
Meanwhile, the anonymous geniuses who devised the latest funding plan have managed to placate the governor and legislative Republicans while driving a wedge between two liberal constituencies: the environmental community and affordable-housing advocates.
That’s quite the masterstroke.
Disclosure: Tim Ashe is the domestic partner of Seven Days publisher and coeditor Paula Routly. Find our conflict-of-interest policy here: sevendaysvt.com/disclosure