The Vermont House of Representatives agreed Wednesday to support a Senate proposal to fund clean water projects without raising new taxes, a feat made possible by unexpectedly robust state revenue collections.

The House voted 133-5 to concur with the Senate changes, meaning the bill now heads to Gov. Phil Scott for his likely signature.

"It looks like we're in a good place," Scott's spokesperson, Rebecca Kelley, told Seven Days after the vote.

The governor had proposed funding clean water from existing estate tax revenues, and while he still needs to review the final details, Kelley said he's encouraged that the legislature has embraced a similar principle.

The plan would take 6 percent of existing room and meals tax revenue that is normally committed to the general fund and divert it to the state clean water fund. The move would raise $8 million during nine months of next year and $12 million for water projects each full year thereafter.

Lawmakers argued that the state can afford the additional spending because revenues are tracking $50 million higher than expected this year, with projections of at least $15 million of that increase to recur in future years.

Budgeting on expected end-of-year revenues instead of the consensus revenue estimates from January struck some as unwise, however. Rep. Matthew Trieber (D-Bellows Falls) voted against the bill because he said it didn’t align with “our principles” of consistent budgeting.

Rep. Janet Ancel (D-Calais) said she understood such concerns and acknowledged that in years past, she had advocated against the exact thing she was now supporting.

“I’m willing to do something this year that I probably wouldn’t have before” because finding a solution to water funding has been so elusive, Ancel said.

Before the new financial projections, the House had proposed a “cloud tax” on software purchased over the internet to replenish rooms and meals revenues taken from the education fund.
But the boost in state revenues made that cloud tax, which was forcefully opposed by business and technology leaders, unnecessary — at least next year.

When the full $12 million must be diverted in future years, Senate leaders have opined that tax increases — perhaps of the property transfer or occupancy taxes — might be needed. That concerns some.

“This is good news, this is bad news and this is an opportunity all rolled into one,” Rep. Heidi Scheuermann (R-Stowe) said.

Not needing to raise new taxes now is good, she said. Using the rooms and meals tax, which is largely generated by the tourism industry, to solve a statewide problem is unfortunate, she said.

The Senate previously proposed raising the rooms and meals tax by 1 percent to pay for the water cleanup work. That idea eventually fizzled, but Scheuermann warned her colleagues that such a proposal would likely return in future years and should be opposed.

When the $12 million is added to other federal funding, the proposal would meet the state’s commitment to find a long-term, stable source for the $50 million to $60 million necessary to comply with a 2016 Lake Champlain cleanup order from the U.S. Environmental Protection Agency.