Amanda D. DavisPA 395: Green TaxesGary FlomenhoftNovember 16, 2004The Unaddressed Issue of Water Consumption inVermontIntroduction:When I began this perilous research endeavor of water consumption taxes, I had a classmate say to me, “Why are you focusing on water quantity and not water quality? Vermont is a water-rich state and quantity is the least of our problems.” I set out to prove her wrong, and I believe I have succeeded. The following are my arguments as to why a water consumption tax is so crucial in Vermont. Let me first explain what does exist regarding water quality and water quantity in the state of Vermont. In 1977, the United States took one of the most progressive steps towards acknowledging the water pollution problem by implementing the Clean Water Act. This act mandates that a permit must be attained in order to discharge any wastes into a water source. In Vermont, this is called the Water Discharge Fee. The application for a discharge permit is $100. The application review fee ranges from $50 to $30,000 depending on the quantity and the type of waste discharged. The annual operating fee ranges from $30 to $10,000 also depending on the quantity and type of discharge. Although the fee is a green tax that is potentially progressive, it has failed to cause any significant behavioral changes and only generated $381,782 in 2003. There is also a Stormwater Fee that prior to 2001 was included within the Water Discharge Fee. The Vermont Agency of Natural Resources (ANR) issues storm water permits to new construction sites and large impervious surfaces. An impervious surface is any surface that prevents water from penetrating the ground. Such surfaces would include pavement, swimming pools, and other cement structures. The fee is paid by customers in order to convey storm water off their property. Storm water carries contaminants such as animal waste, fertilizers, pesticides, 1copper, zinc, lead, oil, grease, phosphorus, and soil particles (Greenville County Government website).There are three parts to the fee: the administrative operating fee ($100), the application review fee ($300 per acre of impervious surface in a Class B watershed, $1170 per acre of impervious surface in Class A watershed), and an annual operating fee ($50 per acre of impervious surface in Class B watershed, $235 per acre of impervious surface in Class A watershed). The stormwater fee only generated $318,735 in 2003. The Water Discharge Fee and the Stormwater Fee are the only two taxes relevant to water, other than pesticide and fertilizer taxes and gasoline taxes which are indirectly relevant to water since these are all non-point sources of water pollution. Although I should make note here, residents in Vermont that are part of a public water system (only homeowners) pay $2.68 per 100 cubic feet of water used, and pay $3.24 per 100 cubic feet of wastewater generated. 100 cubic feetis equal to be 748 gallons. So for the use of 748 gallons, a household only pays $2.68! With these insignificant rates, behavior remains stagnant. This is where my research of current water taxes inVermont ended and my research into a potentially revolutionary tax began. Analysis of a Water Consumption Tax:The Water Quality Division estimates that for housing projects, 75 gallons of water are consumed per person per day. Assuming this estimate applies to everyone in the state of Vermont,a meager 1 cent tax on every gallon consumed would generate over $169,000,000! However, there is an inaccuracy in this measure. Thousands of households in Vermont are not on a public water system. There are 95,000 wells on the state inventory. The majority of wells serve one household. The average household consumes about 200 gallons of water per day. Charging a 1 cent per gallon tax on each gallon used from a well would generate $69,350,000 annually. The number of households in Vermont according to Census Bureau is 240,634. Subtracting the 95,000households on well water leaves you with 145,634 households on public water systems. Now multiplying this by 200 gallons per day (an estimate from the Water Supply Division) times 365 2days and finally multiplied by $0.01 gives you $106,312,820. Now adding this to the $69,350,000gives you a grand total of $175,662,820! Pretty close to my original estimate of merely multiplying the population by 75 gallons by 365 days. The math clearly indicates that the revenueis colossal; however, it is important to evaluate the affects of this tax and assess its feasibility. The ease of administering this tax is noteworthy. The structure of the water discharge feesare already in place. A water consumption tax could easily buttress existing pollution reporting and fee requirements. “Water taxes could rest on top of irrigation districts’ existing water deliverycharges” (Durning and Bauman 78). Also, meters are on all houses that are part of the public water system. Meters are not mandatory on wells, although they do exist. Households on well water may argue that they shouldn’t be taxed on water attained from their own property, particularly because they are not exhausting the public water supply. However, even though the groundwater they are pumping for their well may be on their property, water itself is not a private commodity. Watersheds cross property lines, county lines, state lines, and even country lines. Groundwater seeps and flows and contamination affects more than the point source location. Therefore households should be expected, as others, to pay for their extraction of a natural resource. This is according to the polluter/user pays principle. The only thing households on well water pay for now is the power to run the pump and maintenance costs. There are no direct taxes! Although we are quick to exempt farmers from many taxes, 81% of the 408 billion gallons of water used each day in the U.S. is used for agricultural and irrigational purposes. Exempting agricultural uses of water from taxes misses out on a huge consumer and potential source of revenue. One who argues that agriculture needs this much water has not investigated more sustainable forms of farming and irrigation. Which leads me to my next point. Taxing natural resources incites innovation. We often underestimate ourselves, but when we are faced with no choice, we find alternative and/or more efficient ways to perform traditional tasks. 3It is superfluous that we rely on the highest quality water for every task, including
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