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JFO: Clean Water Fund base revenues ~ $30M; surcharge, meals-and-rooms and bottle deposits provide core funding
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Summary
A Joint Fiscal Office presenter told the House Appropriations Committee the Clean Water Fund's core revenue mix is the property transfer surcharge, 6% of meals-and-rooms tax and unclaimed bottle deposits; FY25 receipts were roughly $9M (surcharge net), $15.2M (meals and rooms) and $4.3M (bottle deposits), with base revenues around $30M and a recommended FY27 clean water budget near $45.2M once capital and one-time funds are included.
A Joint Fiscal Office revenue-team member identified in committee remarks as "Ted" reviewed the Clean Water Fund's revenue composition and fiscal trajectory on April 15, telling the House Appropriations Committee that the fund depends on three dedicated sources: a property-transfer surcharge, a 6% allocation of the meals-and-rooms tax and unclaimed bottle-deposit revenue.
"The clean water surcharge applies to the value that is above $200,000 on a real estate transaction...that surcharge generated almost $10,000,000 in fiscal year 25," the presenter said, adding that a statutorily required $1,000,000 transfer to the Housing and Conservation Trust left the Clean Water Fund "just shy of $9,000,000" from that source in FY25.
He told members the meals-and-rooms allocation produced about $15,200,000 in FY25 and unclaimed bottle deposits contributed roughly $4,300,000. Combining these core sources and other revenues, the presenter said base revenues have been "right around the $30,000,000 mark" in recent years.
The JFO presenter also described the broader clean-water spending picture: in fiscal 2025 Vermont administered about $174 million in clean-water funding across state-managed programs, with the Clean Water Fund representing a portion of that total. He noted capital-bill appropriations, ARPA allocations and unreserved carry-forward balances have been important complements to dedicated revenues, and that ARPA-funded projects must be expended by 2026.
Committee members asked whether the fund can support large-scale combined-sewer-overflow separation and wastewater upgrades. Presenters said SRF loans, local bond votes and repayment capacity are important limits to how quickly towns can deliver capital projects and that the availability of matches and grant forgiveness varies by program.
The JFO member described the revenue mix as generally procyclical and sensitive to macroeconomic trends (real-estate activity and tourism), saying revenue performance improved after pandemic-era trends but could change if broader economic conditions shift. He flagged a forthcoming quarterly ARPA update that may provide additional detail on ARPA-funded clean water projects.
The committee scheduled further follow-up and asked the JFO and DEC to supply additional methodological and project-level details.
