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Environmental Services outlines $340M budget dominated by SRF loans; PFAS and ARPA funds drive new programs
Summary
Department of Environmental Services (DES) managers told lawmakers the agency’s operating budget is driven by pass‑through loans and federal grants, including the state revolving funds (SRF) for wastewater and drinking water and recent PFAS, ARPA and settlement monies used for remediation and grants.
DES Commissioner Bob Scott and agency leaders told the House Finance Division I that the Department of Environmental Services’ 2026–27 efficiency budget centers on large federal grants and revolving loan programs, not general‑fund spending.
Nut Graf: The department said roughly 69% of its operating budget moves out the door as loans, grants, rebates or reimbursements and that the Clean Water and Drinking Water State Revolving Funds (SRFs) constitute the single largest share of spending. DES also described a sizable portfolio of ARPA capital allocations, a drinking‑water trust fund (from prior litigation), and new PFAS response funding that municipal water systems can access.
Commissioner Scott and Susan Carlson, DES’s chief operating officer, told the panel the agency’s proposed efficiency budget totals about $340 million across funds but only about $29.5 million per year in general funds (roughly 8% of the operating budget). Carlson emphasized the SRF programs — clean water SRF and drinking water SRF — comprise roughly 43% of the department’s operating budget and function primarily as federal‑capital grants matched by state capital with repayments that are re‑loaned to communities.
Key details from testimony:
- SRF and ARPA: DES said its SRF portfolio has been augmented by one‑time federal infrastructure funding (for example, from the federal infrastructure bill) and by $15 million of ARPA funding for the state’s New Hampshire First (ERP) upgrade implementation. Carlson said most ARPA funds for the agency were designated for HVAC and building deferred maintenance projects and that those ARPA appropriations were fully committed and obligated prior to the program deadline.
- PFAS and trust fund: DES discussed a variety of PFAS response activities, including a PFAS loan and grant program that has allocated roughly $71 million to public drinking water systems and a homeowner rebate program for point‑of‑entry treatment (up to $5,000) or connection assistance (up to $10,000). Commissioner Scott said the state has received settlement funds (including a large recent settlement referenced as part of Multi‑state litigations) that will be allocated to impacted public systems and that the drinking water groundwater trust fund — capitalized by prior litigation proceeds — has lent roughly $30 million annually to water projects.
- Loans and other funds: Carlson added DES operates five loan programs overall (clean water SRF, drinking water SRF, drinking water groundwater trust fund, PFAS response fund, and a small Brownfields loan program) and that loan repayments fuel additional lending. The department told the committee it plans to spend down ARPA dollars for capital projects by late 2026 following federal deadlines.
- Plant and property / energy management: DAS‑related maintenance and building operations were described more broadly in the earlier portion of the joint hearing, but DES noted it manages environmental and permitting functions related to wells, wastewater, dams and stormwater, and that it will target one‑time capital monies for deferred maintenance and HVAC projects.
Ending: DES said the agency’s budget is dominated by pass‑throughs: loans, reimbursements and grants that are individually large but do not represent ongoing general‑fund commitments. The department asked lawmakers to consider sustained capital support for aging state‑owned dams and to note that PFAS response funding and SRF capacity remain key to municipal water system funding.
