Clean Water Advocacy - Newsroom - AMSA in the News
Draft Proposal for $45 Billion Trust Fund Would Tax Bottled Beverages for Revenue
A trust fund being pushed by various interest groups to pay for clean water programs would rely in large part on a 5 cent beverage bottle tax and would cover more than infrastructure costs, according to draft legislation dated Nov. 22.
The draft being circulated for discussion among environmental organizations,
municipalities, and wastewater treatment plant operators would authorize 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.
Another $1 billion would be spread among technology programs that include
demonstration projects, research, and funds for small systems; fisheries
enhancements; assistance for states; nonpoint source pollution control; and
regional programs such as restoration efforts in the Great Lakes and Chesapeake
Bay. Of this amount, $200 million would go for nonpoint source management
programs under Section 319 of the Clean Water Act. Another $50 million would be
for state management of clean water programs under Section 106.
Funding under these two sections would be in addition to the $209 million and
the $210 million authorized, respectively, by Congress for fiscal 2005.
Need for Dedicated Funding Source
Municipalities and environmental organizations have argued that a dedicated
funding source, such as a trust fund, is needed to address the widening gap
between water quality needs, including for infrastructure, and the amount that
is actually spent. The Water Infrastructure Network, a coalition of municipal
groups including treatment plant operators, estimated the gap at about $23
billion annually over 20 years.
A gap analysis by the Environmental Protection Agency put the total at about
$535 billion over the 20-year period.
Advocates for increased funding cite increasing regulatory requirements,
crumbling infrastructure, population growth, and other issues as adding pressure
to do more with diminishing funds.
Under the draft proposal for a trust fund bill, state governments would have to
target the money to certain high priority areas, such as stormwater control,
sewer overflow abatement, pollution from abandoned mines, total maximum daily
loads, and disadvantaged communities.
The Bush administration has opposed increased funding levels, especially with
other competing budgetary demands. EPA officials instead have touted a
"four-pillar" plan to encourage water conservation, consolidation among some
utilities, improved system management, and pricing systems that better reflect
the cost of providing clean water.
Decrease in State Revolving Fund
For the first time since 1996, Congress approved a decrease in funding Nov. 20
for the clean water state revolving fund in fiscal year 2005 from $1.35 billion
to $1.1 billion (225 DEN A-1, 11/23/04 ).
Ken Kirk, executive director of the Association of Metropolitan Sewerage
Agencies, told BNA Nov. 23 that the administration's position and the state
revolving fund reduction by Congress reflects a belief that "clean water is a
local problem again."
However, officials have suggested, state and local governments already are
stretched thin financially, which is why a trust fund, similar to what is in
place to pay for highways and airports, is needed.
A nickel tax on bottled beverages would provide $35 billion over five years,
with the balance of the $45 billion coming from the combined drinking water and
clean water state revolving funds.
The clean water SRF has been funded annually at about $1.35 billion, and the
drinking water SRF receives about $850 million for a combined $2.2 billion. Over
five years, that totals more than $10 billion.
Only the $35 billion from the dedicated tax on bottled beverages would be new
money, according to one official familiar with the draft.
Most of the SRF money would go to states that make low-interest loans to
communities for infrastructure, but it also would pay for other program
requirements under the two laws.
States Resist Grant Money
State officials generally have resisted federal funding of grant programs in
lieu of increased funding for loans administered by the state governments
themselves because they want to retain discretion on how the money allocated to
them is used. Senate staff floated a draft bill in June that would have
reauthorized the clean water SRF program at $20 billion over five years. It
contained a grants component deemed more palatable by some state officials
because it was run through the SRF program and thus required projects funded by
grants to be part of the state priority list and to meet the same requirements
as those receiving loans (111 DEN A-9, 6/10/04 ).
The discussion draft is being circulated among municipal groups, environmental
activists, and others that have been pushing for a trust fund.
Kirk said the grants are needed because "the needs out there are incredibly
huge," and funds need to be targeted at some of the most pressing issues, such
as sewer overflows and lead pipe replacement projects.
Kirk said he does not know who would sponsor the bill in the 109th Congress, but
said the most likely sponsors are those who have championed increased funding in
the past, such as Sens. George Voinovich (R-Ohio) and James Jeffords (I-Vt.) and
Reps. John Duncan (R-Tenn.) and Sue Kelly (R-N.Y.).
By Susan Bruninga