Per-Parcel Fee To Fund Water Cleanup Draws Swift Opposition

Jan 16, 2017

A plan to fund water-quality improvements by assessing a per-parcel fee on all property owners in Vermont is already drawing opposition in Montpelier.

State Treasurer Beth Pearce unveiled the recommendation in a report released Sunday night. She says it’s the most equitable way to finance a water-quality improvement initiative that will cost at least $1 billion over the next 20 years.

“We’ve heard for years that people are taxed out, property taxes are too high. Adding an assessment per property is just adding to the property tax burden,” says House Minority Leader Don Turner.

Pearce’s plan would raise about $25 million a year through a per-parcel assessment on property owners. The report doesn’t say how much the fee should be, or whether it should be assessed on acreage, for example, or on the amount of runoff a particular property generates.

But Turner says a per-parcel fee, or any new tax or revenue for that matter, won’t fly with him or with voters.

“We have to figure out a way to make state government more efficient, so that we can reallocate, re-appropriate some of the resources that we’re currently using that programs that maybe have to be put off, may have to be discontinued, to fund new priorities,” Turner says.

"Adding an assessment per property is just adding to the property tax burden." — House Minority Leader Don Turner

Senate President Pro Tem Tim Ashe says it's unlikely Vermont can free up enough money from existing sources without decimating key government programs.

Ashe is more open to the per-parcel fee concept. He voted in favor for a per-parcel assessment to fund a separate water-quality bill two years ago – the House ultimately rejected that plan.

Ashe says the per-parcel concept meets the parameters he thinks are needed for a good financing plan, “largely, to make sure that all the contributors to the pollution of our waterways pay in something to help clean them up.”

Supporters of the per-parcel fee will have some unlikely allies from the business community in their corner. Tom Torti, executive director of the Lake Champlain Chamber of Commerce, says the scope and severity of the water-quality issue demand new public investments. Torti says no one is going to be excited about signing onto a per-parcel fee that adds to the cost of owning a home or business.

“But philosophically [the per-parcel fee] aligns very nicely with the kind of philosophy, the all-in philosophy the chamber has been espousing for years," he says.

A per-parcel fee for water cleanup efforts failed two years ago. Torti says he foresees head winds for this proposal as well.

“There were any number of reasons why people thought that that was a bad idea. I think those reasons will probably raise their heads again,” Torti says. “And I have to ask, as I did then, if we don’t go down this path, how are we proposing to raise the money?”

"I have to ask ... if we don't go down this path, how are we proposing to raise the money?" — Tom Torti, Lake Champlain Chamber of Commerce executive director

How to raise the money is the $1 billion question these days. The administration of Republican Gov. Phil Scott hasn’t put forward any answers yet. Secretary of Natural Resources Julie Moore made it clear on Monday that the money almost certainly won’t be coming from a per-parcel fee on landowners.

“The governor has obviously been very clear that he believes Vermonters have reached their capacity for new taxes,” Moore says. “But that’s not to say that there is any question in our mind about the need to meet the standards that have been established in the pollution budget for Lake Champlain.”

Moore says reallocating existing resources is one way to generate cleanup funds. She says there are other possible non-tax revenue streams as well, “not the least of which is the potential revenue source through the planned New England Clean Power Link that may be available to us in out years.”

The owners of that electric transmission line will pay Vermont for the right to run it under Vermont and into Massachusetts.

Few lawmakers have been more vocal than Westminster Rep. David Deen about the need to raise new public revenues for water cleanup efforts. But Deen, the Democratic chairman of the House Committee on Fish, Wildlife and Water Resources, says his committee identified a number of problems with the per-parcel fee when it vetted the proposal in 2015.

“What if someone doesn’t pay it? You have a whole issue of collection that we struggled with and never really came up with a good answer as we were passing the Clean Water Act,” Deen says.

Under Pearce’s recommendation, the per-parcel assessment wouldn’t take effect until the middle of 2019. She’s presented a plan that reallocates existing funds to pay for water cleanup efforts until that time. The two-year “glide path,” as Pearce calls it, means lawmakers could postpone for as long as two years any decisions about how to pay for longer-term water-quality costs.

Deen says it’ll be a tempting way to avoid a politically-fraught decision.

“But we’re still going to have the same decisions to make afterwards,” Deen says. “My advice and inclination is, let’s get to it.”