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Clean Water Advocacy - Newsroom - AMSA in the News

Proposed Cuts to Water Revolving Fund Prompt Calls for Establishing Trust Fund

The Bush administration's proposed cuts to the clean water state revolving fund in fiscal year 2006 prompted renewed calls by municipal officials for a trust fund to help pay for water and wastewater infrastructure upgrades.
The $7.6 billion budget request for the Environmental Protection Agency would cut the clean water SRF from $1.1 billion to $730 million, the lowest level sought for the fund in nearly a decade (25 DEN A-7, 2/8/04 ).

Previous budget proposals have typically sought about $800 million for the state revolving fund, and Congress has repeatedly bumped that figure up to $1.35 billion.

The $1.1 billion appropriated in fiscal 2005 surprised some state and local officials because support for the SRF in Congress has been strong.

State revolving fund money is allocated to the states based on a formula in the Clean Water Act. States use the funding to make low-interest loans to communities for infrastructure construction and improvements. The money may n also be used by states to implement a variety of Clean Water Act programs, including controls on nonpoint sources of pollution.


Precedents Set in Other Areas

The Association of Metropolitan Sewerage Agencies said the proposed cuts demonstrate the need for a trust fund to pay for infrastructure.
"Facing similar shortfalls in funding for critical national infrastructure, Congress has established trust funds supported by dedicated revenue sources," AMSA said in a statement. "Congressionally established trust funds for highway infrastructure ($30 billion/year) and airport infrastructure ($8 billion/year) provide a strong precedent for moving forward with a similar trust fund for clean and safe water."

EPA officials defended the cuts to the state revolving fund, saying the agency is still on target to meet its goal of having the fund revolve at $3.4 billion by 2011. The administration proposed $850 million for the drinking water SRF, the same as current year funding.

While funding for the state revolving fund is declining somewhat, targeted funding for water and sewer projects through congressional earmarks continues to rise. In fiscal year 2005, Congress tacked on 873 projects totaling $488.2 million, most of them for water and sewer infrastructure.

AMSA has floated draft legislation authorizing a $45 billion trust fund over five years that would include $3 billion annually in grants and $2 billion in loans for clean water programs and $1.5 billion each for grants and loans for drinking water programs. The legislation would pay for the fund through a bottle tax (226 DEN A-2, 11/24/04 ).

EPA has estimated an infrastructure funding gap of about $535 billion over 20 years. Municipal organizations said they think the gap is higher and may increase without more federal money.

"Without a long-term, sustainable federal-state-local partnership, communities will not be able to tackle essential capital replacement projects needed to meet federal Clean Water Act mandates and improve the quality of the nation's waters," Ken Kirk, AMSA's executive director, said.


Other Clean Water Act Programs

Other Clean Water Act programs would be funded at levels comparable to the current year. For example, the administration proposed $209 million for Section 319 grants, money used for nonpoint source pollution controls. This is the level Congress appropriated for fiscal 2004, but it is down from the $238 million that had been made available in the two previous years.
Funding under Clean Water Act Section 106, which covers numerous pollution control programs administered by the states, including the permitting programs, would increase to $232 million under the request, an increase of $10 million from the previous request and $22 million over the current year funding.

The Chesapeake Bay program would receive $20.7 million, about the same as the current level.

The administration announced Feb. 4 it was seeking $50 million to clean up the Great Lakes from toxic pollution (24 DEN A-3, 02/7/05 ). Congress has generally appropriated about half the requested amount.

The request zeroes out funding under Clean Water Act Section 104(b), which usually pays for innovative projects, one state official said. In recent years, funding has been about $18 million.



By Susan Bruninga