Water sector reiterates call to fully fund SRFs in 2024

In August, 18 water sector organizations including those representing U.S. utility systems, wrote to Congress to reiterate support for funding the Clean Water and Drinking Water State Revolving Funds (SRFs) to the maximum authorization in federal law, $3 billion each, for fiscal year 2024.

In July, a House Appropriations committee proposed a significant decrease for the Clean and Drinking Water SRFs in FY24 to reduce EPA spending. Senate appropriators have in turn proposed maintaining SRF and overall EPA funding relatively flat for next year. According to the Association of Metropolitan Water Agencies (AMWA), representing large drinking water systems, negotiators in Congress will need to reach an agreement on funding for the SRFs, overall EPA and the entire federal government later this fall. On that front, AMWA added that speculation is growing on Capitol Hill that lawmakers might risk a government shutdown if progress towards a deal is not made by Oct. 1, the start of the new fiscal year.

EPA’s 7th Drinking Water Needs Survey estimates the cost of meeting the nation’s infrastructure needs for safe drinking water is $625 billion over the next 20 years. The nation’s Clean Watershed Needs Survey, which completed data collection earlier in 2023, is expected to show an increasing funding need for wastewater, water recycling and stormwater infrastructure.

Without increased investment, the legacy gap in capital investment in water infrastructure is expected to grow to $434 billion by 2029, according to the American Society of Civil Engineers (ASCE).

According to the August letter sent by the water sector organizations, maintaining annual federal funding for the SRFs will allow water utilities to keep water infrastructure projects on track, on time and on budget.

The letter notes: “The SRFs offer a reliable, accessible and affordable financing option for water utilities who are facing a myriad of financial challenges. The economic and regulatory factors that are driving up the cost of infrastructure include historic inflation, supply chain disruptions, a shortage of skilled workers, increased competition for professional services such as engineering, rising interest rates on municipal bonds, and the increased cost of compliance to meet increasingly stringent federal water quality standards for nutrients, lead, copper and emerging contaminants such as per-and polyfluoroalkyl substances (PFAS).”

The organizations also note that SRF funding is directly linked to other areas such as the government’s ability to issue municipal bonds to generate additional funding to meet the demand for subsidized loans for water infrastructure projects, etc.

In addition, it notes annual federal funding for the SRFs is more flexible than short-term federal funding in the Infrastructure Investment and Jobs Act (IIJA).

Sources: EPA, AMWA

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