A Billion-Dollar Gap—and Counting
Vermont’s drinking water systems are facing a looming crisis that no amount of short-term federal aid will solve. Despite record levels of temporary infrastructure funding from Washington, the state is still on track to fall more than a billion dollars short in meeting its public water needs over the next two decades. And when the federal pipeline runs dry in 2027, towns and taxpayers may be left holding the bag.
In 2023, the Environmental Protection Agency (EPA) estimated that Vermont must invest more than $1.779 billion over 20 years just to maintain and upgrade public drinking water infrastructure. That figure does not include future costs related to operations, new regulations like PFAS testing, source protection, or system expansions due to population growth and climate adaptation.
Temporary Federal Aid Masks a Deeper Problem
To meet these needs, Vermont has relied heavily on the Bipartisan Infrastructure Law (BIL) and American Rescue Plan Act (ARPA) funds, which have temporarily boosted the state’s Drinking Water State Revolving Fund (DWSRF). In 2022 and 2023 alone, federal awards totaled more than $143 million, much of it earmarked for lead service line replacement and emerging contaminants like PFAS.
However, this funding is short-lived. These grants are structured to expire by 2027—and many are restricted in use. Worse still, long-term funding sources have been gutted by Congressional Directed Spending (CDS), commonly known as earmarks. The result is a hollowing-out of Vermont’s core water program staffing and capacity-building infrastructure.
Staffing Cuts, Local Strain
Before Congressional Directed Spending (CDS) diverted base funding, Vermont used about 31% of its general DWSRF grant to support up to 22 full-time employees and approximately $486,000 annually in local technical assistance. By 2023, that support had dropped to 10 full-time staff and just $198,000. Projections for 2024 suggest the state will be able to fund less than one full-time position and under $100,000 in support—an alarming cut as regulatory demands and infrastructure needs continue to grow.
While federal dollars have enabled temporary progress—asset management plans, leak detection, valve maintenance, and lead inventory programs—these efforts are not self-sustaining. Towns are depending on state engineers and grant consultants funded by these temporary sources. When those positions vanish in 2027, many small communities will have no internal capacity to manage their systems, apply for funding, or respond to failures.
Small Systems, Big Vulnerabilities
Seventy-two percent of Vermont’s community water systems serve fewer than 500 people. These small, often rural systems struggle with aging infrastructure, deferred maintenance, and insufficient rate structures. Some are operated by part-time or volunteer staff. Keeping rates low often means skipping essential repairs, underpaying certified operators, or forgoing basic recordkeeping.
The result? Systems that are already on the brink will find themselves unable to keep up with both infrastructure and regulatory demands.
Regulations Are Rising, Too
Adding to the challenge, Vermont must comply with several aggressive federal mandates over the next 18 months:
- The Lead and Copper Rule Revisions require every community and non-transient water system to complete a full inventory of service lines by October 2024.
- PFAS testing and treatment requirements are tightening.
- Climate resilience expectations are rising in both design and funding criteria.
All of these carry cost implications and require trained staff—both of which Vermont is running short on.
Disadvantaged Communities at Risk
To date, Vermont has awarded more than $318 million in DWSRF loans. But with the loss of general fund matching dollars and the evaporation of flexible funding due to earmarks, disadvantaged communities are being pushed down the priority list.
Congressional earmarks bypass Vermont’s merit-based system and send millions to projects with political backing, not necessarily greatest need.
The Cost Will Come Due
If nothing changes, taxpayers will eventually pay the price—through local bond votes, rate hikes, state tax increases, or emergency bailouts. Water is a foundational service. Failing to fund it sustainably is not an option.
What Vermont Needs Now
Lawmakers and local leaders should recognize the writing on the wall. The temporary flush of federal money has masked a system still financially unsustainable. The state needs a post-BIL plan—one that restores base funding, supports small systems, and insulates essential staff from political winds.
Without it, Vermont may soon find itself underwater.
Dave Soulia | FYIVT
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