FY23 budget proposal would expand drinking water funds, affordability assistance

The FY23 budget request released by the White House would boost EPA spending to $11.9 billion in 2023, (an increase from $9.56 billion in FY22), while providing full funding for a new drinking water system resilience program long championed by the drinking water sector and the Association of Metropolitan Water Agencies (AMWA). The budget plan also proposes to expand a long-established home energy assistance program to allow it to help low-income families pay water and wastewater bills.

Under the Biden Administration’s budget plan for EPA, funding for the Drinking Water and Clean Water State Revolving Fund (SRF) programs would remain flat next year, at $1.126 billion and $1.639 billion, respectively. The Water Infrastructure Finance and Innovation Act (WIFIA) program would receive roughly $80 million (including administrative expenses), about $10 million more than FY22. EPA said this level of funding would support up to $8 billion in direct credit assistance.

The White House budget also proposes to fund “all of the authorizations in the Bipartisan Infrastructure Law [BIL], including the creation of 20 new targeted water grant programs.” Among these are EPA’s new Midsize and Large Drinking Water System Infrastructure Resilience and Sustainability Program, which will offer competitive EPA grants to community water systems serving more than 10,000 people to address climate, extreme weather, and cyber-related challenges. AMWA developed the original concept for the program and has long been its leading water sector advocate, and the BIL authorized it to receive up to $50 million in FY23. President Biden’s request would also fully fund two similar programs dedicated to addressing resilience needs at small drinking water systems and publicly owned treatment works. In sum, the President’s budget would provide a combined total of $100 million for these three water system resilience programs next year.

According to AMWA, some other notable aspects of the FY23 budget request include:

  • More than $180 million for several EPA programs to reduce lead in drinking water (which the agency said represents an increase of $160 million above their 2022 levels), including programs to help communities and homeowners fully replace lead service lines and  schools address lead in their water;
  • $25 million “for competitive grants to meet cybersecurity infrastructure needs within the water sector,” which EPA is framing as “a new … water sector cybersecurity grant program,” but which would require congressional action to establish; and
  • Reforming the Department of Health and Human Services’ Low Income Home Energy Assistance Program (LIHEAP) to give states “the option to use a portion of their LIHEAP funds to provide water bill assistance to low-income households.” Currently, LIHEAP funds may only be used on home energy and weatherization assistance efforts, but a temporary Low Income Household Water Assistance Program (LIHWAP) created by Congress in 2020 is scheduled to expire after 2023.

On the wastewater side, much of the proposed funding for clean water remains level compared to FY22 enacted levels. The budget would provide the Clean Water State Revolving Fund (CWSRF) with level funding at $1.64 billion.

Another priority, EPA’s Workforce Grants program, would also see a sizeable plus up to $17.7 million – compared to less than $5 million received so far. The budget also proposes a new $25 million water sector cybersecurity grant program. Additionally, the Alternative Water Source Grants Pilot Program is funded at $25 million, which would help with water reuse and recycling projects. These are all important programs and NACWA commends the administration for prioritizing them.   

On environmental justice (EJ), EPA requests a major increase in funding – $300.8 million – to stand up a new national office led by a Senate-confirmed Assistant Administrator that would guide policymaking for the national program offices and assist EJ implementation efforts within the regions.  

To supplement the budget, EPA also released an FY 2022-2026 Strategic Plan, which serves as a marker for the Agency’s priorities over the next four years.  

Beyond EPA priorities, the proposed budget includes a significant increase in funding for the Building Resilient Infrastructure and Communities (BRIC) program, which supports states, local communities, tribes, and territories as they establish hazard mitigation projects with the goal of reducing the risks faced by disasters and natural hazards. The Federal Emergency Management Agency’s (FEMA) Pre-Hazard Flood Mitigation Assistance Grants program would also stand to gain greatly from an increase of funding from $9 million in FY22 to $88 million in the proposal.  

Additionally, U.S. Department of Agriculture (USDA) conservation programs, including the Environmental Quality Incentives Program and Conservation Stewardship Program, would see increases to make up a combined pot of funding of approximately $1.7 billion for FY23.  

Congress has had a slow start to developing FY23 appropriations bills after recently passing the FY22 Omnibus, but activity for next year will likely begin in the coming weeks. The release of the President’s FY23 budget marks the first step in what will be a long process to fund the government next year. Congress will begin holding hearings on the budget proposal in the coming days, including with EPA Administrator Michael Regan testifying before a Senate committee on Wednesday. The House and Senate will eventually develop their own budget plans for EPA and the entire federal government, with the 2023 fiscal year scheduled to begin on Oct. 1.


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