To Pay For Clean Water, House Taps Rooms And Meals Tax

May 4, 2018

The Vermont House on Friday advanced a bill that raises taxes to fund clean water programs.

The bill imposes a 0.25 percent increase on the rooms and meals tax. Another provision collects money from unclaimed bottle deposits. Together, the two funding sources would raise $6.4 million for the state's clean water fund by 2021.

The taxes won't go into effect until 2020 to give lawmakers time to look for different revenue sources.

Calais Rep. Janet Ancel, chair of the tax-writing Ways and Means Committee, said the delay will give lawmakers and the Scott Administration — which opposes the taxes — time to come up with “a better idea, if they have one.”

Westminster Rep. David Deen said the federal Environmental Protection Agency recently evaluated Vermont's efforts to get phosphorus pollution out of Lake Champlain and said the state needs a reliable source of money to pay for the work.

“The number one item is the lack of a sustainable ongoing funding source to implement those items that we are responsible for in cleaning up Lake Champlain,” Deen said.

The lake often sees blue green algae blooms in the summer, especially in St. Albans and Missisquoi Bays. The problem is nutrient pollution – phosphorus coming from farm fields, dirt roads and storm water – that fuels the toxic algae blooms.

Deen, who chairs the House Committee on Natural Resources, Fish and Wildlife, said it's appropriate to raise taxes on rooms and meals because tourists who often pay those taxes come to the state to enjoy a clean environment.

"How attractive is green, stinking water, dead fish on the shoreline, and toxic-laden beaches? A real tourist attraction." — Rep. David Deen

“And I have to ask, how attractive is green, stinking water?” he said. “Dead fish on the shoreline, and toxic-laden beaches? A real tourist attraction.”

But Stowe Rep. Heidi Scheuermann argued it's wrong to collect money from the tourist trade to pay for a problem it didn't cause.

“First off, no new funding for our clean water effort is needed until 2021,” she said. “As importantly, though, when we do institute a funding source it must have a nexus to water. Putting the vast majority of the burden to clean up our state's waterways on our hospitality industry is both unfair and misguided.”

And Arlington Rep. Cynthia Browning said the new taxes should relate to the underlying pollution.

"These taxes have no real connection to the generation of the pollution problems... These are opportunistic taxes because it's simple, it's easy, we can just increase meals and rooms." — Rep. Cynthia Browning

“These taxes have no real connection to the generation of the pollution problems that we have in our surface waters,” she said. “These are opportunistic taxes because it’s simple, it’s easy, we can just increase meals and rooms.”

The House gave preliminary approval to the bill on a 92 to 48 vote. See how legislators voted.

The measure comes up for final approval next week, and then will have to be reconciled with a Senate version.

The bill faces a potential veto from Gov. Phil Scott, who has said new taxes are not needed because the clean water fund has enough money for the next several years.