Member Pipeline - Member Services & Information - Update (MU03-15)
| To: | Members & Affiliates, Legislative Policy Committee, Wastewater Infrastructure Funding Task Force |
| From: | National Office |
| Date: | August 15, 2003 |
| Subject: | WASTEWATER INFRASTRUCTURE FUNDING Report |
| Reference: | MU 03-15 |
Printer friendly versionAMSA is pleased to provide to members a report entitled, A National Clean Water Trust Fund: Principles for Efficient and Effective Design, which examines the rationales for a clean water trust fund, catalogues the potential funding sources for such a trust fund, and estimates the revenue that can be raised from each source. The report constitutes another key step in AMSA’s Wastewater Infrastructure Funding Task Force’s initiative to develop a sustainable funding solution to the nation’s clean water infrastructure financing shortfall. Although the report does not recommend any one method of securing a funding source, it serves as an important guide to feasible trust fund options.
Water Trust Fund Strategies and Revenue Potential
The report identifies the criteria commonly used to analyze the
basic viability of a new trust fund. The criteria include:
- Effectiveness - the ability to effectively raise funds sufficient to meet the nation’s clean water needs
- Equity – the ability of the trust fund source to extract funds equitably based on factors such as location, income, and time
- Administrative Simplicity - costs of implementation compared to other alternatives available
- Political Reality – the popularity, support and opposition to implementing the proposed funding source
Based on these criteria, the report further identifies the viable sources of funding and applies an in-depth analysis of the aforementioned criteria to each. The potential sources include:
- Polluter Pays — polluters are primarily industries that benefit from wastewater treatment services who would pay a fee in proportion to their impact on water quality. These would include manufactures of cleaning agents, chemical manufactures, land developers, etc. Publicly owned treatment works (POTWs) would not be responsible for paying into this fund nor, most likely, would industries that participate in pretreatment programs.
- Beneficiary Pays — those who benefit the most from wastewater treatment infrastructure would pay into a trust fund. Categories of clean water beneficiaries could include waterfront tourism, water recreation companies, fisheries, and food producers.
- The Nation as a Whole Pays —because water quality is a public good, the benefits of which are broadly available to all people, the nation as a whole would assume the fees through a federal sales or income tax.
- Specific Groups of Users Pay — this method would obtain funding from activities deemed “societal bads” and is often called a “sin tax”. Such “bads” would include smoking, drinking and breaking of the law.
The Water Infrastructure Network, Congressional Budget Office, and U.S. Environmental Protection Agency all agree that a gap on the order of $7 billion to $12 billion a year, over the next twenty years, separate current investment in wastewater infrastructure and the level necessary to meet infrastructure needs. With highways and airports having already garnered broad support and significant revenue for trust funds, it is time for Congress to initiate a serious discussion on the creation of a clean water trust fund.
AMSA encourages its public agency members and affiliates to review and disseminate this report to their boards, local, state and federal elected officials, business and industry. Please feel free to contact Lee Garrigan (202-833-4655), AMSA’s Legislative Affairs Director, with any comments or questions regarding the report. The report can be downloaded at http://www.amsa-cleanwater.org/private/legreg/outreach/2003-08-05TrustFundPrinciplesV5.pdf