Investing in Vermont / Investing Locally

August 2018: An overview of the Local Investment Program by Beth Pearce

Investing locally is a win-win-win: leveraging State resources, we get a guaranteed competitive rate while supporting local investment, economic development, and job creation while assisting in meeting the affordable housing, energy goals, and other important areas of policy adopted by the Legislature.

In the State Treasurer ʼs Office, we partner with cities and towns, nonprofits, State authorities, citizen groups, the Governor and the Legislature to provide finance solutions that look to the future. Beginning in 2012, I convened a Local Investment Working Group that met regularly to explore opportunities for local investment. Since 2012, over $33 million has been obligated and invested in local investment projects across the State. Investment in family daycare, sustainable food production, affordable housing, energy efficiency, reducing the cost of post-secondary education, and renewable energy investments provide examples of the breadth of the program.
I would like to highlight some of these initiatives.

The Treasurer’s Office extended $10 million in 2014 to enable VEDA to make loans and provide other forms of financing for projects that stimulate and encourage development and deployment of clean energy or energy efficiency technologies in the State of Vermont. Since the initial $10 million investment made by the Treasurer’s’ Office, VEDA has used these and other paired resources to complete nearly 80 loans to over 60 companies totaling over $45 million in local investment. The aggregate energy projects VEDA participated in totals over $100 million since the initial Treasurer’s Office loan to VEDA.

By investing in Neighborworks of Western Vermont we have assisted in expanding a successful residential energy efficiency program. Since 2013, the Treasurer’s Office has loaned $3.75 million to Neighborworks of Western Vermont for landlord rehabilitation loans, homeowner rehabilitation loans, landlord energy loans, homeowner energy loans, and down payment assistance. To date, over 200 families have received loans through local investment dollars provided by the local investment program in the Treasurer’s Office.

An investment of $2.8 million by the Treasurer’s Office with the Vermont Housing Finance Agency (VHFA) has been used to support energy improvements in multi-family housing projects throughout Vermont. We also put the State’s moral obligation behind a $15 million bond refunding issue to lower the cost of a number of multi-family affordable housing projects.

In 2014 we worked with Efficiency Vermont, the Governor, and legislative leadership to propose legislation to permit the Treasurer’s Office to invest up to $8 million in a revolving fund to make energy improvements/investments in State buildings.

The Treasurer’s Office provides ongoing investments of up to $1 million with the Vermont Community Loan Fund (VCLF). In 2016, we doubled our lending capacity with VCLF (from $500,000 to $1 million) to provide further assistance in new investments that will increase access to capital for businesses working to improve local food production, small farms, sustainable forestry, and affordable housing programs.

In 2016 a $2 million agreement was reached with Champlain Housing Trust that provided financing for the Local Investment Financing Trust program. This program supports the preservation, acquisition, and stabilizing of multifamily and single-family housing for the benefit of low, moderate, and media income families and individuals in Vermont.

$4 million agreement was reached with the Vermont Student Assistance Corporation and the Treasurer’s Office in the spring of 2016 that directed local investment dollars towards lowering the fixed rates on Vermont Advantage loans for parents and students, starting at 4.8 percent, the lowest rates ever offered in Vermont.
I am committed to investing locally while maintaining the highest quality due diligence as a fiduciary to taxpayer dollars.
As we move forward on these and other efforts, I am grateful for your support and partnership. After all, that’s how we get things done in Vermont – through partnership, collaboration and commitment to our shared values.

Beth Pearce: The financial case to protect Vermont’s water

The following commentary appeared in VT Digger on April 30, 2018. See below for the full commentary as well as the link to the commentary as posted.


Apr 30 2018

Editor’s note: This commentary is by Vermont Treasurer Beth Pearce.

“Beth Pearce: The financial case to protect Vermont’s water”

Clean water is the backbone to Vermont’s economy and is vital to the health and wellbeing of all our citizens. Not only is clean water an essential natural resource – it is also an integral part of our character as a state.

Despite common ground and a consensus from policymakers and citizens that we need to protect and preserve our most precious natural resources, the quality of our waterways has degraded as phosphorus and other pollutants have damaged the long-term health of our lakes and rivers. Lake Champlain and Lake Carmi are painful examples of the status of our waterways. It is time to recognize our current situation as a crisis.

For years, there has been an intensive statewide effort to understand the clean water challenges we face, to identify a range of possible solutions, and crucially, to determine how to pay for those solutions. The studies have spanned multiple administrations, and include a collaborative effort led by the Treasurer’s Office that resulted in the Act 64 Report, which was finalized in January 2017.

The General Assembly, the administration, nonprofits, businesses, and advocacy groups have studied the problem exhaustively and repeatedly. While continued study is important, what Vermont needs now is action and the courage to make bold policy decisions so that we do not shirk our environmental and financial responsibilities and place them on the shoulders of future generations. The General Assembly and the administration are now faced with making a policy decision on how to comprehensively address our clean water challenges. Luckily, policymakers have all the information they need to make decisions now. What we do not need is continued study in place of real action.

As it stands, there are two choices: to act or to defer action. We must not defer action.

As your treasurer, I approach this issue from a financial perspective, so let me lay out the numbers.

Over $2.5 billion is spent annually in Vermont by visitors and vacation homeowners, and much of that is linked directly to the quality of lakes and rivers throughout the state. A Vermont Agency of Commerce and Community Development study showed that in 2013 visitor spending contributed $318 million in tax and fee revenues and supported an estimated 30,000 jobs for Vermonters. In 2015, 37 lakeside properties in one Vermont town had their home values drop by $1.8 million due to declining water quality. The message is clear – the longer we defer action, the greater risk we face of decreased tourism revenue, property values, and further environmental damage.
Beyond the economics, there are real health concerns for Vermonters. Over 42 percent of Vermonters get their drinking water from our state’s lakes, rivers, reservoirs, and streams. Lake Champlain alone provides 154,000 Vermonters with their drinking water, with residents using approximately 20 million gallons a day. Particularly as we look towards the future health and wellbeing of our young Vermonters, we must act now to mitigate future pollution.

So what are the costs? The Act 64 Report identified a long-term funding need of $2.3 billion to fund water quality improvements over a 20-year time span. This includes compliance standards laid out in the Lake Champlain TMDL, as put forth by the U.S. Environmental Protection Agency. Of the long-term funding need, $1.06 billion is funded with existing resources, leaving a gap of $1.25 billion. To meet this need, the Act 64 Report recommended a target of $25 million per year in additional revenue as the state’s contribution, working in partnership with all stakeholders. For 2018 and 2019, the General Assembly adopted a two-year funding “bridge” that reallocated capital dollars to begin addressing this challenge immediately – but that funding runs out next year, and we have yet to adopt a long-term funding mechanism.

While I appreciate the value of additional research and refinement, we should not allow a continued search for the perfect solution to take the place of good, concrete action based on known data. The time to identify a more permanent and sustainable funding source is now. I urge the General Assembly to take action now to make the following decisions:
(1) how do we allocate existing clean water funding dollars;
(2) how do we deliver the services needed to improve water quality; and
(3) how do we generate any dollars that cannot be met with existing revenues?

As reflected in the Act 64 Report, to the extent that existing resources, built into the base budget, are not available, I have been an advocate of an impervious surface or user fee because of their proven nexus with respect to water quality. That said, I recognize that other fees have been included in the current proposed legislation that will only go into effect should the General Assembly fail to come up with and implement an alternate solution. I view these efforts as a demonstration by the House of their commitment to clean water. They recognize the urgency of the situation that we face, and I look forward to the General Assembly moving forward with a comprehensive funding solution with a clear nexus to water quality.

The time to act is now. Like an unpaid credit card bill — the longer we defer action, the more expensive the solution will become.

Our lakes, rivers and waterways are assets that support our way of life, our property values, our health and safety, and our economy. We need to invest in these assets. Like any investment, early, proactive and disciplined practices are the key to success. As stated before, we have two options, defer action or take action – we must not miss this opportunity to take action now.

Thank you

I am so grateful for your support and honored to continue serving as your State Treasurer. As we move forward, I will continue to work to improve our financial future and maintain prudent financial practices that protect taxpayer dollars. The Treasurer’s Office will continue to expand opportunities for local investment and work for retirement security and economic prosperity for all Vermonters.

Thank you for your support. Lets work TOGETHER for all Vermonters.

-Beth Pearce