August 1st Legislative Update 

By: Matt Musgrave, AGC/VT Government Affairs Director

Vermonts Clean Water Initiative

One of Vermonts largest economic drivers are visitors to Vermonts lakes, mountains and streams. Around this natural beauty Vermonters have build homes, business and depend on tourism which accounts for over $2.8 Billion per in 2017. This accounts for roughly 10% of Vermonts gross domestic product or money spent in Vermont. While more urban centers are largely protected by tourism ups and downs, rural towns often depend on the influx.

Clean water has become one of the main focuses of the state legislature. In 2016 the US Environmental Protection Agency created a Total Maximum Daily Load (TMDL) that places a cap on the quantity of phosphorus to enter Lake Champlain. Decades of runoff from cities, farms and developed lands have deposited large quantities of phosphorus which is a chemical used in fertilizers. This phosphorus in the lake is having the same effect as in your garden; allowing organic life to grow faster. In particular, the “life” prospering in Lake Champlain is known as blue green algae but is cyanobacteria. The warm summer days with a predominant southwest wind has created large blooms particularly in the northern part of the lake. These cyanobacteria when in bloom can rise up to two inches out of the water, produce a horrible smell and is toxic to people and animals. Several dogs have died in 2019 as a result and 2 humans have been hospitalized by exposure.

In 2015 the Vermont legislature passed the Clean Water Bill also know as Act 64. This bill made changes to the way farms operate, wastewater treatment, municipal roads, municipal storm sewers, exiting developed lands, creation of a clean water board and some new construction standards using stormwater rules. Vermonts Treasurer Beth Pierce was also required by Act 64 to produce a budget and recommend revenue sources to clean the water ways. During 2016 Pierce had multiple public forums, met with engineers and Vermonts Agency of Natural Resources to develop the report. The report showed that over a 20-year period it would be necessary to raise and spend approximately $2 billion to fix our problem.

We are currently in phase one of the clean water plan and its calling for approximately $30 million per year. The fund already receives federal dollars, general fund, transportation fund and a portion of the property transfer tax. It is estimated between $12-15 million must change the source of funding from the general and transportation fund to a long-term dedicated revenue source (a new tax) to comply with EPA requirements and maintain our bond rating that sets interest rates the state can borrow at. For the past two years the legislature has used the Treasurers report as a guide to find monies. In the summer of 2017, I attended a working group focused on finding reasonable ways to raise the funds. Parcel fees, impervious surface fees, per acre fees, and/or increases to other taxes. The working group was unable to decide the best policy and the legislature will continue to debate this through the 2020 session. Currently the funding gap has been filled by reallocation of one-time monies and general funds but that will change particularly as the annual investment increases through the phases.

What does this mean for AGC/VT members??? There are already projects on the ground that include updating state highways, municipal roads and improvements being made on stormwater systems. One provision know as the “3 acre rule” will come in to play over the next few years requiring state, municipal and private property owners who own parcels of land with 3 or more acres of impervious surface that had previously not been required to have a stormwater permit to come into compliance or face huge impact fees which have been estimated at $50,000/acre. The Act 73 report has a breakdown of the monies needed that will consist of Federal, State and private funds. The estimates for fiscal years 2020-2024 will need $6 million for state roads, $5 million for municipal roads and another $15 million for the 3 acre lots. In addition, its estimated that another $35 million will go into fixing or replacing municipal sewer systems, combined sewage overflow systems and stormwater systems.

For all this work the state and private property owners will be relying on the professional contractor community to get the work done. This gives you the opportunity to get involved and take advantage of all the new work while doing something good for Vermonts environment. AGC/VT and its lobbying team are working for you to avoid any new onerous tax increases and to help “get the money out the door” for new projects that our members can take advantage of.