Senate OKs water quality bill that includes surcharge on property transfer tax

Sen. John Campbell, D-Windsor.

Sen. John Campbell, D-Windsor.

The Vermont Senate gave preliminary approval to an $8 million water quality bill on a voice vote Monday.

The money would be raised through a 0.2 percent surcharge on the property transfer tax, the same funding mechanism that was approved by the House. The property transfer tax is paid by real estate purchasers at closing.

The Senate’s version sunsets the tax in 2018 with the expectation that it would be replaced with a more equitable tax policy in which polluters pay more to clean up the state’s waterways.

The bill, H.35, aims to slow pollution into the state’s waterways, including Lake Champlain. It creates new permits to reduce runoff from developed areas and sets a timeline for the creation of pollution control measures on farms, among other measures.

The debate on the Senate floor Monday was more about about funding than policy. Three Senate committees have passed some form of a per parcel fee in which landowners pay a surcharge on their property tax bill.

But when Gov. Peter Shumlin, who originally proposed a tax on commercial and industrial properties in the Lake Champlain watershed, described the per parcel fee as a “property tax fee” last week, the Senate got cold feet.

Senate President Pro Tempore John Campbell, D-Windsor, said that could have stalled the bill.

“The only thing that tripped people up was the financing. The governor has been calling it a property tax repeatedly, and that kind of poisoned the well,” Campbell said. “The most important thing for me was to get the bill through.”

Others say it’s not fair that future property buyers, including young people seeking to establish roots in the state, be asked to pay for water pollution problems that were caused by past development and farming practices.

“We have legacy costs and we’re making the future pay for it instead of all of us,” said Sen. David Zuckerman, P/D-Chittenden.

Sen. Dick Sears, D-Bennington, was also concerned about tax fairness. One variation of the fee would have charged a constituent who lives in a trailer and another who lives in a mansion the same amount.

“That doesn’t seem fair to me,” he said. “That’s not what I call a progressive tax.”

The per parcel fee would have set the stage for a more complicated tax policy in the future in which polluters pay more. Both the Senate and the House version included a study on how to collect a tiered tax based on the amount of pollution a property generates.

David Mears, commissioner of the Vermont Department of Environmental Conservation, said the state should be looking at ways to tax based on pollution.

“It should be fair and tied to the source of the pollution. The so-called ‘polluter pays’ concept is an important one,” Mears said.

Despite the arguments over fairness, even supporters of the per parcel fee agreed to the property transfer tax because they wanted to see the bill move forward.

“It’s a balance that’s workable, and we know we have more work to do in the years to come,” said Sen. Chris Bray, D-Addison, chairman of the Senate Natural Resources and Energy Committee, whose committee supported a per parcel fee. “I think it’s important to be able to move the bill forward.”

But some senators are worried there will be less appetite to raise money for water quality through another funding mechanism in the years ahead. A University of Vermont study last year found a majority of residents would pay at least $40 per year for improved water quality.

Sen. David Zuckerman, P/D-Chittenden, is the lead sponsor of a bill to require manufacturers to label products containing GMOs.  Photo by John Herrick/VTDigger

Sen. David Zuckerman, P/D-Chittenden. Photo by John Herrick/VTDigger

“If we can’t pass any ‘all-in’ measure today after four months of talking water quality as the top policy question, do you think we’re going to do it in three years?” Zuckerman said. “This is the time to do it when the whole state says we are ‘all in.’”

In 2008, the Conservation Law Foundation sued the Environmental Protection Agency for failing to implement the Clean Water Act when it approved the state’s water quality plan for Lake Champlain. Now the EPA is seeking a commitment from the state that it can fund its new plan or the EPA will issue what are expected to be more costly regulations on stormwater and wastewater. A decision is expected early summer.

The EPA modeled the state’s plan last year and found that it did not achieve the phosphorus reductions necessary to comply with state standards. The state is still working with the EPA and the agency has not indicated whether it will approve the state’s plan, according to Mears.

“There is no guarantee. They are in charge of running the models. They may ask us to do more,” he said. “But all the signals from EPA are very positive.”

John Herrick

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  • Nick Spencer

    A race to get the funding as opposed to a well-conceived bill. Well, at least they give lip service to getting the polluters to pay up in 2018. Too bad the concept of “All-In”is so important in water quality, but not so much in education funding, where one town can always pass a bigger budget funded by tax-payers living elsewhere (sorry, non-sequitur, but I can’t take the hypocracy from those pushing the bill)

    On the water quality issue, I’ll start to feel guilty the moment I see Burlington stop releasing effluent into the lake and farms not turning the rivers chocolate brown during every rain event (like TODAY). Look at the color of the Winooski as you drive up the Interstate tomorrow.

    Meanwhile, the mature hardwood forest that I own and pay taxes on and my State-mandated engineered septic system will continue to help myfamily be of little negative impact to the waters of Vermont. The “All-In” mantra is extremely hollow if it treats rural landowners the same as if they are dumping stormwater off their cul de sac into the Potash Brook. Just calling it for what it is….

  • Joseph F. Whelan

    H. 35 is too watered down to do much. Maybe outlawing the sale of plastic-bottled water in our state would force us to get serious about water quality.

  • ruth sproull

    I was happy to read that this includes money for all the waterways in Vermont. People in Champlain County might think that Lake Champlain is the only one worth saving (since most discussion usually centers on this) but I would remind everyone that there’s ANOTHER gigantic lake in the Northeast Kingdom (Memphremagog) along with a host of other smaller bodies of water that also need the state’s attention.

  • James Maroney

    “All in, everyone contributes” sounds so democratic but it is essentially an effort to shift responsibility. What about “All in, everyone contributes, each in proportion to his or her responsibility?” There are approximately 371,354 people living in the Lake Champlain watershed, which comprises Bennington, Rutland, Lamoille, Franklin, Grand Isle, Chittenden and Addison counties, all of whose residents use the bathroom. A high percentage of these drive, and the rest depend upon cars. It is not going to stop raining. If these people want a clean lake, they must be “all in” for their share of the problem, which is about 50%. The other 50% is caused by 700 conventional dairy farmers, or about 2/10th of 1% of the population of the watershed, almost all of whom are in Franklin and Addison County. This tiny cohort should take responsibility for 0.02% of the first 50% and a 100% of the second 50%. Then we in the watershed, but not those not in the watershed, would fairly be “all in.” If the state were to charge 700 conventional dairy farmers for their fair share, say by levying a 100% excise tax on imported NPK fertilizer and 100% on imported feed supplements, the two main sources of phosphorus in the half attributed to agriculture, conventional farmers would quickly become sustainable.

    • Neil Johnson

      The farming can be solved easily and beneficially to all parties without a tax. All us other people flushing toilets are not contributing to the pollution, you see, we have septic systems.

      Another big money grab and government designed system that is better at taking in money than actually solving a problem.

      Why should the country folk pay for others municipal sewer violation? If the state actually enforced current rules we’d probably be rid of half the problem without taxing anyone.

      This is all bogus.

  • Ed Letourneau

    The only people who should pay for this are the ones who live in the Lake Champlain watershed. E.g., southern Vermont does not drain north. Someone needsto teach these people to read a topo map.

  • Kelly Stettner

    Nick Spencer, hear hear!

  • rosemarie jackowski

    This tax would be the ultimate injustice for those elderly Vermonters who live near a municipal water line but are not allowed to hook on. They must buy all their drinking water in plastic bottles and lug them home from the grocery store. They also lug hundreds of pounds of water softener salt on a regular basis.

  • Neil Johnson

    You can thank the lobbyists for pushing this through.

    We need to have a remedial class for all our representatives. The class will consist of how to identify the Vermont Public and how to Identify a lobbyist.

    Some topics for discussion will include the following.

    Do Washington representatives wear orange? Do they wear camo?

    How to tell the difference between a hunter dressed in orange and a convict dressed in orange, they are not the same.

    Those people who actually take time off from work to fill your state house are citizens.

    Arguments count, so do facts. Who should you listen to, well founded arguments by citizens or people in suits waving money and telling stories with no substance?

    Extra credit

    Is a fee a tax? So far for several years now representatives have failed this question. We will be holding study hours nightly to help those to understand that no matter what you call it, money from citizens to government is a tax.

    • John McClaughry

      Not really. A fee is a payment to the government in return for some specific service provided to the payor, like a toll bridge, a driver’s license, a physician’s license, a weights and measures inspection, etc.
      Every other payment to government is (so far as I can see) a tax to support whatever government spends its money on generally.
      Politicians are understandably nervous about inventing a new tax – so they tend to propose things like a “heating fuel savings charge” – Sen. Shumlin’s preferred tax on heating oil to finance his “thermal efficiency utility” in 2007. That one didn’t pass then, but it’s still around in different guises. Then there’s Energy Independent Vermont’s “carbon pollution assessment” , which is a new tax levied on heating oil, gasoline, diesel, propane and natural gas to defeat “climate change”. (In fairness, VPIRG & Co. do refer to it as a “carbon tax” in other places.)
      Fees are justified because they make the specific beneficiary compensate the government for a service rendered. “Taxes” along with the many inventive euphemisms, must pass the test of Ch I Art 9 of the Constitution. Voters should make their legislators justify every tax increase by that standard – but rarely do.

      • Neil Johnson

        Fees and taxes aren’t in alignment here. Why does somebody buying a home in Barton, get taxed and the money is used for Burlington’s municipal waste system? In theory you may be correct, but is this how money is really used at the state level? Registration fees have doubled for vehicles, does it cost 2x the amount to register them? The state now makes more than any listing agent selling a house, but people won’t know about it until they buy or sell there house. Sneaking way of raising money.

        A fee is neat way of saying we spent all our money for running the government, we have to find another way to raise money.

        The system is gamed such as the state as welfare recipients who don’t want to come off the dole. I’m talking about inside business deals, grants, cronyism….it’s rampant in our little green mountains.

  • Christopher Daniels

    Farmers need to stop spraying liquid manure to the edge of water before I as a homeowner with a septic tank that drains downhill to a 50 acre woodland ponies up to improve water quality. Just yesterday, I watched a farmer spray alongside a small lake with a vegetated buffer of no more than 10-15 feet. With the heavy rain from last night, that manure washed straight into the lake, which then drains to Lake Champlain. It’s unreal that this behavior continues. It’s time for farmers to take responsibility for their actions.

  • Robert Fuller

    All I’ve heard this session is “tax”.

    increase in property transfer tax
    tax on soda
    tax on bottled water
    income and payroll tax for healthcare
    tax on asset rich property taxpayers to adjust income sensitivity

    did I miss anything?

  • Chet Greenwood

    Robert Fuller-
    How about eliminating VT Income Tax deduction from prior year

    limiting itemized deductions to $31,500 (joint) or mortgage interest at $12,000 (TBD)

    Increase in fees (code word for more tax)

    increase in cigarette tax

    increase in e-cigarette tax

    increase in rooms and meals tax

    increase in property taxes

  • David Bresett

    Small farms will now start shutdown mode over this bogus bill. The state allows huge parking lots around such entities as Wall Mart to pollute, yet now after a couple hundred years, farms, small farms, will be a thing of the past. So, anyone thinking about farming, the downhillers have won.

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