Environmental Services warns of program cuts after House trims general funds; PFAS settlement and solid‑waste fee draw attention

Bob Scott, commissioner of the New Hampshire Department of Environmental Services (DES), told the Senate Finance Committee the agency faces sizable biennial general‑fund reductions in the House phase of HB 2 and urged careful handling of several policy changes the House inserted into the budget.

Scott said DES has about "94 full time permanent staff" (testimony transcribed as "9 4 93"), runs unusual state services such as operating some wastewater facilities, and relies heavily on non‑general funds: he summarized that roughly "94% of our operating budgets [are] from outside sources," with fees and federal funds comprising most of the balance. Susan Carlson, DES budget staff, provided line‑item figures showing the agency’s base budget falling from about $387 million in FY25 to $336.9 million in FY26, with a governor’s‑phase addition of $55 million tied to an anticipated PFAS settlement that the agency expects to flow through a drinking water trust fund.

Scott and staff asked the committee to exempt certain dedicated funds from a proposed 5% administrative assessment the House added to dedicated funds. The DES presentation identified several funds—title‑V federal funds and the drinking water groundwater trust fund among them—that the department believes are either legally barred from an administrative assessment or would be legally and practically harmed by it.

On PFAS, Carlson said the agency included a $55 million placeholder in FY26 as expected settlement money from litigation involving 3M and DuPont; DES is seeking statutory language that would allow reimbursing water systems consistent with an evolving court interpretation, which broadened eligibility to systems with any detectable PFAS levels. Carlson said the fund currently distributes reimbursements "proportionally" to impacted systems once money is received.

The House also added a new $3.50 per‑ton solid‑waste surcharge, DES testified, an item meant to replace general‑fund support of the solid‑waste program and to raise "between $6 and $7,000,000 per year" for departmental operations and grants for diversion. DES said it generally supports a sustainable revenue source for cyanobacteria work through a lake license plate and is working with stakeholders on boathouse guidance aimed at restricting over‑water boathouse uses to boating activities and limiting vertical size.

A highly contested policy insertion in HB 2 would eliminate the state motor‑vehicle emissions (inspection) program. DES officials told the committee that dropping the program without following federal Clean Air Act processes could expose the state to citizen suits and potentially jeopardize federal highway funds. DES recommended language making any program changes contingent on following federal requirements and obtaining federal concurrence.

Why it matters: The House adjustments shift program costs from general funds to fees and dedicated funds and put policy changes (motor‑vehicle emissions, landfill permitting language) into a budget bill rather than a standalone policy bill. DES asked senators to allow more substantive committee review in policy committees and to exempt several federal and trust funds from the House’s proposed 5% dedicated‑fund administrative assessment.

Committee context: Senators asked DES for more detail about how many new projects the state aid grant program could fund under the House phase (DES said only a small buffer remained). DES also cautioned the committee that taking 5% from a court settlement routed to the drinking water trust fund would be problematic and asked LBA consultation to draft precise exemptions.