Reprinted from Water & Wastes Digest Blog

The Obama Administration this month released its 2017 budget, which includes $15 million in credit subsidy for the Water Infrastructure Finance and Innovation Act (WIFIA). This may not sound like much (particularly in a budget that cut the Clean Water and Drinking Water State Revolving Loan Funds by a combined $257 million), but it has the potential to result in a significant number of water and wastewater infrastructure projects.

The funding, which will be administered by the U.S. Environmental Protection Agency (EPA), is designed to support large projects, meaning those that cost more than $20 million. It is money that will be put up as credit against default, and given the historically low risk of default for water and wastewater projects, this translates to a potential $1 billion in monies that could be borrowed from the U.S. Treasury.

As we reported on this blog in December, the Transportation Bill passed by Congress and signed by the president at the end of the year removed a paragraph in the Water Resources Reform and Development Act of 2014 that would have prevented cities from using tax-exempt municipal bonds to match these U.S. Treasury-backed loans for up to 51% of project funding under WIFIA. This language placed unnecessary restrictions on funding and would have made it more difficult for critical water projects to move forward.

The removal of that language and the funding proposed by the president for 2017 point to very positive progress for WIFIA. This is an excellent example of how the water and wastewater industry can work together with the legislature and regulators to move toward national goals of providing safe, clean water.