Clean Water SRF Focus of Budget Cuts

The Administration’s budget proposal for FY07 includes deep cuts in clean water programs administered by the Environmental Protection Agency (EPA).

The Administration’s budget proposal for FY07 includes deep cuts in clean water programs administered by the Environmental Protection Agency (EPA). The budget targets EPA for an overall cut of nearly $310 million, with much of the cut, nearly $200 million, coming from reductions in the Clean Water State Revolving Fund (CWSRF) program.

The President’s budget would reduce funding for the CWSRF to $687 million. That would represent nearly a 50% overall reduction in funding for the program since 2001, when funding for the program was $1.350 billion. Last year, Congress appropriated $887 million for the CWSRF.

The President’s budget also eliminates funding for wastewater operator training grants. The Drinking Water SRF is slated to receive a slight increase in funding -- to $841 million from last year’s enacted level of $837 million.

Since the program was established in 1987, the Clean Water SRF programs have helped fund over $52 billion in projects, providing more than 16,700 low-interest loans. In 2004 alone, the CWSRF helped fund $4.6 billion in high priority projects -- from wastewater systems and nonpoint source pollution control to estuary management and a range of projects focusing on water quality.

It’s sad to see the CWSRF funding being trimmed, considering it is one of the most cost-effective programs in government. For every dollar the federal government invests, more than two dollars is made available for environmental improvements.

Congress created the SRF program to serve as a long-term funding source for projects that clean and protect the nation’s waters. According to EPA, the fund has grown at a compound rate of 15 percent per year when you take into consideration federal funding, matching state monies and loan repayments.

Despite the program’s success to date, there was never any guarantee that Congress would continue to fund the program forever - it was originally designed to become a self-sustaining program.

The Bush administration has said its goal is to provide a cumulative $6.8 billion in funding for the CWSRF between 2004 and 2011. That total would help the program meet its long-term revolving level target of $3.4 billion.

In trimming the CWSRF funding for 2006, the Bush Administration argued that the fund had received more than its share of funding in 2004 and 2005: The administration’s goal was to provide $850 million each year through 2011. Congress approved larger amounts in 2004 and 2005, so the Administration keeps cutting back on its budget requests for the program.

To say the least, industry and environmental groups are not happy about the plan to reduce funding for the Clean Water SRF, especially given the state of the industry and the gap between need and funding levels expected over the next few years.

Although I understand some of the budget pressures on the President - and would like to see the Federal budget trimmed substantially - I feel that now is not the time to cut funding for water. Given the number of bills introduced in the last year to provide additional funding for water infrastructure, some Congressional leaders apparently feel the same way.

My preference would be for Congress to forget about alternative financing options and focus on beefing up the Clean Water SRF. It’s a program that works.

James Laughlin, Editor

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