A state working group tasked with proposing legislation and identifying a funding source for Vermont’s 20-year effort to reduce phosphorus pollution in its waterways has finished its work — without achieving either of its primary goals.
The Working Group on Water Quality Funding was created by Act 73, a law passed this year by the state legislature. Its members were mainly officials from the administration of Gov. Phil Scott. Its final report was delivered to the legislature on Wednesday.
Natural Resources Secretary Julie Moore, a member of the group, blames its failure to reach conclusions on a short timeframe and a raft of complications. “There’s a need for several important public policy questions to be discussed,” she says. “We need to have clarity on how much we need to raise before we can propose legislation.”
Other complications, she adds, include how to collect and administer a per-parcel water-quality fee that remains the most likely long-term revenue source, and how to split costs between state and local governments for many types of improvement projects. The working group is effectively kicking back many of those questions to the legislature.
Environmental groups are not happy. “The report is a disappointment,” said Jared Carpenter of the Lake Champlain Committee in a written statement. “The working group was charged to find a long-term funding solution … for clean water and it misses that mark by a wide margin, offering no solutions and no legislation.”
The working group’s report does not map out funding sources beyond the next five years, and it calls for heavy reliance on the state’s Capital Fund throughout that period.
In 2016, State Treasurer Beth Pearce proposed a two-year “bridge” of capital fund money totaling $50 million for water-quality work. The legislature approved the plan and the governor signed it — but Pearce made it clear that the two years should be devoted to coming up with a stable, long-term funding plan that doesn’t involve continued borrowing.
“We’re trying to reduce our reliance on capital debt,” she now says. “I urge the governor and the legislature to come up with a stable funding source for years three through 20. The time is now.”
In preparing her 2016 recommendations, Pearce examined “60 to 70 revenue sources,” she says. “We vetted and modeled each one. We ended up with a per-parcel fee tied to the amount of pollution. Polluters pay.”
The working group was charged with devising a system for a per-parcel fee; instead, it found a wealth of complications — although its report still concludes that a per-parcel fee remains the likely long-term solution.
“The state tax department and the Vermont League of Cities & Towns both looked at new billing structures,” Moore explains. Both concluded that the administrative cost would eat up too much of the proceeds.
But that’s mainly because both entities chose to model a completely new and separate collection system. The tax department says it makes more sense to assess the fee through the local property tax system, since it is also an assessment based on property ownership. League members, Moore says, don’t want the water-quality fee to appear on property tax bills for fear of confusing taxpayers. Hence, the modeling of a new, costly collection system.
If you called that bureaucracy getting in the way of progress, I wouldn’t disagree.
Agriculture is the biggest contributor to phosphorus pollution in Vermont, accounting for 43 percent of the nutrient load. And agriculture is where the working group’s report is precisely the foggiest.
Working Group on Water Quality Funding
Its outline of funding sources for different sectors — municipal water treatment, road construction, private and public lands, and agriculture — shows that it has identified full funding for most sectors.
But not for agriculture, the second costliest sector. Only about half of its funding needs are identified for a five-year period. And this report doesn’t account for one very large unknown: the almost certain need for more staffing in the Agency of Agriculture, Food & Markets. “They have a long history of regulating farms with more than 200 cows,” says Moore. “Many small farms were only inspected on a complaint basis.” Under the cleanup plan, the agency must inspect small farms as well, and provide support for their mitigation efforts.
But the report does not call for any increase in Ag Agency staffing; it merely points to the possible need for additional hiring in 2022 and thereafter. “Certainly, they’re not acting with any sense of urgency,” says Jon Groveman, policy and water program director for the Vermont Natural Resources Council.
Municipalities are feeling the pinch as well. The league raises objections not only to assessing the per-parcel fee; it is also complaining about the burden on local governments. “According to our estimates, about 35 percent of the cost falls to municipal ratepayers and taxpayers,” Moore said. The cities and towns are looking for state or federal money to assume more of the costs.
There’s one other area of expense that’s not addressed in the working group report: costs of operation and maintenance for all the new facilities to be built during this 20-year effort. The league is especially concerned about that, because many of the facilities will process municipal wastewater and stormwater.
The report is not only full of questions; it’s also got plenty of hypotheticals. Or, to put it another way, wishful thinking.
The working group points to revenue sources that may or may not become reality. It hopes for $5 million a year from the proposed TDI New England Clean Power Link, which would carry Canadian electricity under Lake Champlain to energy markets in southern New England. Massachusetts will have the final decision on that project.
It’s also full of hopes about savings from future technical innovations, flexible financing and “adaptive management.” Plenty of buzzwords, and all meant to paper over the reality that the cleanup plan remains without a stable funding source after the first two years.
“We’re not putting off action,” Moore insists. “We’re actively engaged in really significant work. It’s full speed ahead.”
To many outside the administration, it sure doesn’t feel very speedy.
“I’m fine with exploring existing resources as long as they’re stable,” says Pearce. “But it can’t be catch-as-catch-can. We cannot continue to defer decisions on this.”
The working group has backhanded the ball into the legislature’s court. Lawmakers will be working not only to appease a variety of constituencies, but under the threat of a gubernatorial veto.