DEC budget rises as federal infrastructure funds drive growth; lawmakers press on PCBs in schools and Lake Carmody treatment

Jason Batchelder, commissioner of the Vermont Department of Environmental Conservation (DEC), told the Senate Appropriations Committee on Feb. 20 that DEC’s FY26 budget is heavily driven by federal funding and that the department’s overall request is approximately $245,000,000.

Batchelder said the increase is “driven primarily by federal funds received through IIJA and BIL,” and that the department has seen major inflows tied to the Bipartisan Infrastructure Law, American Rescue Plan Act pass-throughs and other federal sources. He said the water investment division administers a large portfolio of state revolving loan funds and pass-through grants, and that the department is seeing unprecedented demand from municipalities for water and wastewater projects.

Why it matters: commissioners said the federal dollars expand DEC’s capacity to fund water infrastructure, land remediation and subrecipient awards—activities that drive both short-term construction and long-term operations in municipal systems and environmental cleanup.

Federal funds and portfolio status - Batchelder told the committee DEC’s federally funded portfolio is large and multi-year; he said the department has a portfolio “of about $50,000,000 in federal funding right now,” of which roughly $38,000,000 has been expended and about $12,000,000 remains to be spent. He said roughly 47 subrecipient awards are currently active and about $5,000,000 is committed but outstanding to local projects. - The department identified principal federal sources as the U.S. Forest Service, Land and Water Conservation Fund, Federal Highway Administration (recreation trails), FEMA, the Northern Border Regional Commission, and ARPA funds tied to outdoor recreation access and recovery from recent floods.

One-time investments and program asks - DEC identified a set of one-time investments the department would like to fund, including: • $250,000 to build a joined agricultural/permit database as part of implementing a Concentrated Animal Feeding Operation (CAFO) corrective action plan with EPA; and $600,000 for contracted support to stand up permitting capacity and specialist staffing. • $50,000 to develop municipal wastewater connection technical standards and a design manual. • A $10,000,000 ask to support remediation related to PCBs in schools; commissioners said $500,000 of that amount would go to the Department of Health for related work. Batchelder and staff said testing and remediation work is ongoing and that the total need will depend on further testing and site-by-site findings.

PCBs in schools: standards and questions Senator Michael Norris pressed DEC on the state’s PCB remediation standard and how it compares with federal guidance. Batchelder said the state’s approach was developed in conjunction with the Department of Health and that Vermont has set a more stringent cleanup level than some other jurisdictions. He deferred to health officials for technical medical risk assessment and said DEC and Health share responsibility for remediation standards and implementation. The commissioner acknowledged there are national disparities in testing and remediation practices and said the state’s standard was arrived at through interagency agreement.

Lake Carmody and alum treatment During discussion of watershed projects, water investment director Neil described plans for an alum treatment at Lake Carmody (Franklin County). He said the aeration experiment there had not produced the desired results and that the state assembled a funding stack that now supports an alum treatment, which is in permitting and likely to proceed this year. Neil cited another Vermont example—Lake Morey—where an alum treatment installed in the early 1980s provided benefits for more than 40 years before retreatment. He cautioned that alum is not a permanent fix and must be paired with watershed nutrient controls to attain long-term outcomes.

Other operational items and changes DEC staff outlined several operational changes: a 3% general-fund increase built into the budget for salary pressures; planned use of special-fund balances to absorb some FY26 pressures; a decrease in interdepartmental-transfer and internal-service allocations tied to federal indirect-cost coverage in the near term; and two proposed analyst positions to support CAFO permitting.

Committee follow-up and requests Committee members asked for supporting documentation on PCB thresholds and for a fact sheet on Lake Carmody’s alum plan and longevity; DEC staff said they would provide those materials. Batchelder and Deputy Commissioner Veil Kim offered to provide more granular lists of federal awards and subrecipient timelines to the committee.

Ending: DEC’s FY26 presentation positioned the agency to use substantial federal funds for water infrastructure, remediation and subrecipient grants while asking the legislature for one-time investments—most notably a $10 million PCB remediation request for schools and smaller technical and database development investments. The department offered to supply additional technical reports and permitting timelines to address lawmakers’ outstanding questions.