Vermont should generate $25 million each year to help clean up state waterways by creating stormwater utilities that charge property owners for contributing to the pollution, state Treasurer Beth Pearce recommended in a report filed Sunday.

A per-parcel fee would help raise just over half the cash needed to get the state in compliance with agreements it has in place with the U.S. Environmental Protection Agency to clean up various waterways, Pearce concluded in the much-anticipated 91-page report.

Pearce said that she envisions officials establishing regional stormwater utilities statewide. While Lake Champlain phosphorus cleanup gets much of the attention, virtually all of the state is under orders from the EPA to reduce the phosphorus load, she said.

Establishing stormwater utilities to collect funding through user fees would take two years, Pearce said in the report. Homeowners, developers, farmers and store owners would all contribute based on how much pollution they generate.

“I think it should be tied to the usage as much as possible,” Pearce said Monday.

Lawmakers and Gov. Phil Scott’s administration would need to set standards for who gets charged how much by the stormwater utilities, she said.


Until the utilities are established, Pearce recommended using existing state bonding power — and extending by one year a soon-to-expire property transfer tax — to raise the $25 million annually.

Lawmakers enacted the property transfer tax in 2015 to start paying for water cleanup. The hard work, a long-term solution, was left until this year. The legislature directed Pearce to study the options and recommend what’s most fiscally sound and fair. She filed her report just four hours before her midnight Sunday deadline.

Pearce’s report estimates that the state needs to spend at least $970 million over the next 20 years to keep pace with federal water cleanup requirements. The per-parcel fees would only generate about half that amount. The rest would have to come from other sources.

Lake cleanup funding is likely to be a point of contention this year between Scott and the Democratic-controlled legislature. While both say the issue is important, Scott does not want to raise new taxes or fees to pay for it.

“The challenge now for the governor and those of us in the legislature is to determine whether we move forward with a two-year strategy, hoping we’ll have the fortitude to come back in a year or two to adopt a plan to fund the next 18 years, or if we can get it all done at once with the information and systems in place today,” Senate President Pro Tempore Tim Ashe (D/P-Chittenden) said in an emailed statement.

The governor supports Pearce’s suggested use of existing bonding authority to fund the first two years, said Julie Moore, the Agency of Natural Resources secretary. “These are resources that are dedicated to existing projects and can be reallocated,” she said.

But Scott’s not keen on Pearce’s plan to enact a user fee for the 18 years that follow, Moore said. She said the administration will look more closely at the impact of the costs on homeowners, businesses and farmers, and may release its own funding proposal.

“We recognize this is a necessary and important investment. It’s how the work gets done and paid for,” she said.

Others also offered mixed reviews of Pearce’s report.

Tom Torti, president of the Lake Champlain Regional Chamber of Commerce, said his organization considers a per-parcel user fee the most equitable way to pay for water-quality measures. “It’s predictable. It’s transparent. Everybody pays,” he said.

But the details will matter, Torti said, including what the money is used for and what other costs remain. “They need to come up with hard and fast parameters,” he said. “It should be consistent year after year.”

James Ehlers, executive director of Lake Champlain International, a lake advocacy organization, said he found Pearce’s recommendations “disappointing.”

The annual $25 million won’t pay for all the work that needs to be done, but Pearce has left people with the impression that it’ll do for now, Ehlers said. “It does not convey the urgency that really exists,” he said. “There’s going to be pushback when people realize they need to pay more.”

Pearce, a Democrat who has been the state treasurer since 2011, concluded in the report that not spending the money is an unwise option. The Franklin County town of Georgia, she noted, lost $1.8 million from its grand list in 2015 after lakeshore properties were devalued because of declining water quality.

“Our lakes and rivers are part of the state’s assets. Not only must these assets be protected, but clean water should also be viewed as an investment in a healthier, more prosperous state for all Vermonters,” Pearce said.

This month, Pearce hired just-departed Department of Environmental Conservation commissioner Alyssa Schuren to help plan for lake cleanup funding.

Pearce and Schuren are scheduled to appear before several legislative committees this week to discuss the report.

The recommendation to help state regions establish stormwater utilities came after looking at a long list of suggestions submitted by various entities, Pearce said. Among the suggestions: taxing nail salons, ending a property tax exemption on ski lifts and taxing flushable consumer products.

Pearce said the advantage of a stormwater utility that charges a per-parcel fee is that all property owners contribute, including tax-exempt entities. Each can be assessed based on how much pollution they cause.

The money raised would be used to regulate stormwater, build municipal infrastructure, provide grants to improve development or farming practices, and reduce loan rates for stormwater-reduction projects, Pearce said.

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.