Healey tax credit could help ease cost of septic system repairs


ONE SET Gov. Maura Healey’s tax plan, which largely stayed under the radar during the governor’s media tour last week, could mean a significant investment in clean water on Cape Cod, according to lawmakers and environmentalists.

In her $859 million tax break package, Healey proposed doubling the maximum credit for repairing or replacing septic tanks in primary residences from $6,000 to $12,000.

Failing and underperforming sewage systems are a major source of pollution in Cape Cod’s freshwater and saltwater systems. Nitrogen and phosphorus in human waste leach from septic tanks into groundwater, which then flows into bays, estuaries, rivers and ponds.

These chemicals, accumulating in natural water systems, encourage the growth of toxic algae and bacteria called cyanobacteria, leading to increased closures of lakes, ponds and beaches in the Cape during summer. Nitrogen and phosphorus also remove oxygen from the water, leading to large-scale fish kills.

“Beaches are closed every year due to water pollution and this has an impact on our fishing industry, especially shellfish, and our very dynamic tourism industry. “Anything we can do to protect water quality is a really important step in protecting our environment and economy in the Cape and Islands,” said Falmouth MP Dylan Fernandes.

The Association to Preserve Cape Cod, a nonprofit environmental organization that monitors and collects data on cyanobacteria, found that coastal bays that serve as important wildlife habitats are rapidly deteriorating.

Between 2019 and 2022, the rate of “unacceptable” water quality in these small bay ecosystems increased from 68 percent to 90 percent, according to the APCC’s annual State of the Water report.

“It’s a very encouraging first sign that the new administration understands the challenges we face on Cape Cod in upgrading underperforming wastewater treatment plants,” said APCC Director Andrew Gottlieb.

Under current state law, homeowners whose primary residence is in Massachusetts can receive a tax credit equal to 40 percent of the amount paid to design and install a water treatment plant to replace or repair a failed system in their yard. The credit covers 40 percent of actual costs, with a maximum credit of $6,000. A homeowner receiving a full $6,000 loan under the current rule will receive loan installments of $1,500 per tax year for four years.

Under Healey’s proposal, the loan would cover 40 percent of actual costs up to $12,000 — doubling the amount residents can receive. It also speeds up the loan repayment schedule, giving homeowners up to $4,000 in septic tank repair loans each year for three tax years instead of four.

An average sewer system costs homeowners around $15,000, Gottlieb said.

These standard systems — often referred to as “Title 5 systems,” referring to the state regulation that sets standards for sanitation systems — filter only about 25 to 30 percent of harmful nitrogen nutrients from wastewater before it flows into the soil to Brian Baumgaertel, clean water researcher at the Massachusetts Alternative Septic System Test Center. When sewage treatment plants fail, it can lead to even greater nutrient leakage and consequent pollution.

Healey’s proposal comes as the Massachusetts Department of Environmental Protection is considering updating Title 5 standard requirements.

Under MassDEP’s proposed amendment to the regulation, any area designated as a “nitrogen-sensitive area” (covering most of the Cape and Islands) “would have to be upgraded to the best available nitrogen-reducing technology within five years”. There are exceptions to this proposed change, including when a municipality can demonstrate that it is working to install a sewage system, which is the most effective method of reducing unwanted nutrients in water systems.

MassDEP held the last of five public hearings to amend Title 5 in January. If implemented, homeowners in many towns across the Cape and Isles would need to replace their less-efficient systems with a nitrogen-reducing system. These alternative systems use new technologies to remove nearly 90 or 95 percent of the nutrients in wastewater before they get into the soil, Baumgaertel said.

Senator Julian Cyr of Truro said he hopes Healey’s proposed Title 5 credit will include these alternative systems. Baumgaertel, whose test center researches and builds these new treatment plants, said the installation could cost homeowners an average of $30,000 to $35,000.

“Doubling the maximum available tax credit will definitely help in situations where people need to invest in nitrogen-reducing systems,” Gottlieb said.

Falmouth, Barnstable, Chatham and Provincetown are the only four cities on Cape Cod that currently have public sewage treatment plants that serve only a small portion of their populations, Gottlieb said. Orleans, Mashpee and Harwich are working on building sewage systems or sewage treatment plants, but they are at different stages of this expensive process.

If the sewers do go live, Cyr hopes the proposed tax credit will also be extended to homeowners who want to connect their homes to public sewers, which can also cost tens of thousands of dollars.

Healey’s proposed tax credit plan, which she released last week, is also consistent with a new loan program for Barnstable County to address sewage problems. The county’s Community Septic Management Loan Program revised its tiered interest rate system on March 1.

The Barnstable program previously offered a 5 percent interest rate on loans to replace failed wastewater treatment plants with either standard or nitrogen-reducing systems. As of last week, residents whose median income is below 120 percent (about $100,000 income, Gottlieb said) are now eligible for loans at 0 percent interest. Residents earning up to 180 percent of the region’s median income are eligible for loans at a 2 percent interest rate, and all other applicants are eligible for a 4 percent interest rate.

Cyr said that when solving Cape Cod’s sewage and water quality problems, previous generations went above and beyond to solve the problems. He said a friend of his who works in Harwich local government recently found a letter from the 1970s in which the federal government offered to pay 90 per cent of the cost of a sewer – an offer they would not have accepted .

“We have to bite the bullet on this issue. This problem will not go away. A pristine marine environment is not only the lifeblood of Cape Cod, it is also intrinsically linked to our economy,” said Cyr.

Cyr and Fernandes commended Healey and Lieutenant Governor Kim Driscoll for their work on the issue two months after taking office. Both Cyr and Gottlieb said that Driscoll in particular had spoken to them on several occasions about the Cape’s sewage pollution problems and possible solutions.

The Truro senator said he was encouraged by the new administration’s willingness to look into the issue and criticized former Gov. Charlie Baker for what he called the “hollow” and “unrealistic” proposal last year invest in wastewater infrastructure.

Baker recommended $200 million for Cape Cod’s water and sanitation initiatives in a supplementary budget last summer, but the investment was scrapped when lawmakers realized it had to pay $3 billion back to taxpayers under Chapter 62F.

“The Healey/Driscoll administration has already been an excellent partner for us in finding revenue streams to solve Cape Cod’s $4 billion sewage problem update, she never came up with a realistic revenue proposal on how we can help our cities meet this problem,” Cyr said. “Their proposal to spend $200 million was hollow and unrealistic given the implementation of 62F and a regressive gift that drained the treasury by $3 billion.”

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While Healey was busy speaking to reporters and constituents last week about other parts of her tax plan, Cape Cod lawmakers and environmental activists said this proposal was “a big deal” for people in the area. When asked about the septic tank system credit on GBH’s Ask the Governor last Thursday, Healey said it was “so important”.

“We see what’s happening now, especially in the Cape, but in the Commonwealth people need to arm themselves, but that costs money. So we wanted to provide this tax credit to help families do that,” Healey said. “You know, it’s expensive to replace your sewage system. So we wanted to give some help. … Many systems, what is that, 25 [thousand dollars]? I mean, 30,000 for a sewage system. And so we hope this tax credit will make a big difference.”

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