ANR FY26 budget: $341.7M recommended as federal funds peak; officials warn of staffing and access risks

The Agency of Natural Resources (ANR) told the House Appropriations Committee on Feb. 19 that the governor's recommended fiscal 2026 budget for the agency is $341,700,000 and that the increase is driven largely by one-time federal funding.

"The Governor's recommend for ANR for FY '26 is $341,700,000," ANR Secretary Julie Moore said in opening remarks to the committee. She and department leaders described a multi-year expansion in federally funded grants and loans that has pushed ANR’s budget well above pre-pandemic levels and created capacity and access risks.

Moore and Department of Environmental Conservation (DEC) officials said the agency’s budget has grown sharply since 2018 — from roughly $125 million then to the FY26 recommendation — and that much of the increase is tied to federal programs such as ARPA and the Bipartisan Infrastructure Law (BIL). Moore told the committee that the agency now uses limited-service staff to administer many of those grants: "we have between 50 and 60 limited service positions right now," she said, adding that those short-term positions are harder to recruit and retain as awards near their end.

Why it matters: ANR is the pass-through for major water and remediation programs. Committee members were told that 57% of the proposed FY26 budget is expected to be passed through as grants, contracts or loans, while about 28% of the budget funds salaries.

Federal-account suspensions and access risk

Moore and DEC officials told the committee that some federal awards were temporarily suspended at the federal level. "As of yesterday afternoon, we had 5 accounts that were suspended," Moore said, and she identified several programs affected, including a Climate Pollution Reduction Grant and a Diesel Emissions Reduction Grant. She added: "For those 5 accounts, the total awards were $7,000,000."

Agency leaders said they monitor accounts weekly and stand ready to draw down funds when they are reopened. DEC Deputy Commissioner Veil Cameron said the agency is tracking a larger set of infrastructure lines tied to BIL and IIJA funding and that municipalities and small communities are already seeing increased demand for loans and grants for drinking water, wastewater and stormwater projects.

CAFO permitting, staffing and one-time requests

The committee heard that ANR is preparing to assume authority to issue concentrate animal feeding operation (CAFO) discharge permits in response to a petition and EPA expectations. Moore said the FY26 budget includes two new permitting positions for that program and one-time investments to help stand it up. DEC presented a more detailed breakdown: $250,000 to build an interface onto the Agency of Agriculture’s farm-inspection database and $600,000 for contracted capacity as the department scales up — a $850,000 one-time package in total to support CAFO implementation.

Cameron described overlap with the Agency of Agriculture’s existing work, saying direct-discharge CAFO permitting will move to DEC while nonpoint-source matters would remain with Agriculture. The agencies plan a stakeholder workgroup and proposed legislative changes to clarify authorities.

PCBs in schools, municipal connection standards and other one-time items

Officials told the committee the governor's proposal includes $10,000,000 for remediation and mitigation of PCB contamination in schools; another $480,000 for a related limited-service position is in the Health Department budget, Moore said. Moore clarified the funds are for remediation and mitigation in schools already tested; she said the budget does not include funds for additional testing.

The package also includes a $50,000 one-time allocation to develop standardized municipal design details and a general permit to streamline municipal water and wastewater connections, an item the administration tied to its housing proposals.

Fish and Wildlife and other internal pressures

DEC Commissioner Jason Batchelder, speaking for the department, described large increases in pass-through funds and said the department is managing operational impacts. "We have met the governor's requirements. We have, managed our department responsibly," Batchelder told the committee, adding that the department will pursue a financial restructuring and that Fish and Wildlife faces budgetary stress. The FY26 request includes modest bridge funding for Fish and Wildlife and $80,000 to upgrade warden radio equipment, officials said.

Program and workforce constraints

Officials emphasized workforce constraints across technical areas. Julie Moore and Kim McKee, DEC’s director of administration and innovation, described difficulty hiring engineers, attorneys and business-office staff at state salaries while overseeing large federal-funded projects. Moore said many federal dollars are effectively "one-time" and staffing built to administer them will shrink as awards end; that creates a longer-term capacity concern.

Other details and monitoring

Moore said ANR issued a Clean Water Performance Report to the Legislature on Jan. 15 that aggregates projects and models reductions in phosphorus loads to Lake Champlain and Lake Memphremagog; the report shows approximately 25–30% of the needed phosphorus reductions have been achieved so far, Moore said. She warned the committee that ecological complexity and model uncertainty mean long-term monitoring and adaptive management remain essential.

Climate Superfund Act feasibility and funding gap

The Climate Superfund Act feasibility work completed with the Treasurer’s Office used an initial $600,000 appropriation (split between the Treasurer and ANR), Moore said, and ANR projects an additional $1,200,000 in one-time funds are needed in FY26 to complete statutory work. That $1.2 million was not included in the governor’s recommended budget, Moore told the committee.

Administrative and operational notes

Officials reviewed ANR’s internal finances: the secretary's office has 42 staff; the agency totals just north of 650 full-time employees; and the agency’s indirect rates are in the 21–28% range and do not apply to all federal awards. DEC said it is using vacancy-savings assumptions to reflect ongoing turnover (DEC increased vacancy savings in its budget documentation), has five regional offices whose rents are paid from the secretary’s office, and has implemented a hotel-desk policy to manage office footprints with significant telework participation.

What’s next

Committee members asked for more detail on suspended federal accounts, the CAFO implementation plan, and the PCB remediation prioritization matrix; Moore and DEC officials said they would share additional materials, including the Clean Water Performance Report executive summary and DEC’s proposed CAFO corrective-action plan.

The committee did not take a vote during the Feb. 19 hearing; members pressed for follow-up information on account suspensions, staffing plans, and the planned legislative changes tied to CAFO permitting.