Lawmakers putting together the FY16 congressional budget resolutions should leave room for sufficient Drinking Water and Clean Water State Revolving Fund (SRF) funding and the new Water Infrastructure Finance and Innovation Act (WIFIA), AMWA and several other water sector organizations wrote to congressional budget leaders on March 10. The associations’ letter also urged Congress to reject a proposal in President Obama’s FY16 budget plan that would impose new taxes on municipal bond interest – a policy that would lead to higher borrowing rates for communities seeking funding for water infrastructure projects.
The letter was sent to the respective chairs and ranking members of the House and Senate Budget Committees, each of which is putting together an FY16 budget resolution. Each chamber’s budget resolution marks one of the first steps in the year’s appropriations process, and sets top-level limits for how much funding will be available for appropriation for various purposes. For example, funding for WIFIA and the SRFs would come from the budget resolution’s Natural Resources and Environment account.
The letter, which in addition to AMWA was signed by the U.S. Conference of Mayors, the American Public Works Association, the American Water Works Association, the National Association of Clean Water Agencies, the Water Environment Federation, and the WateReuse Association, endorsed President Obama’s proposed $279 million funding increase for the DWSRF but warned against the proposed $333 million cut to the Clean Water SRF. Instead, the groups urged Congress to maintain level funding for the CWSRF at $1.149 billion.
On WIFIA, the organizations requested fully funding the program’s $25 million authorization, to enable “communities to begin accessing additional capital [offered by the program] as quickly as possible.”
The letter also referenced municipal bonds, explaining that any policy altering their tax-exempt interest would “cost municipalities billions of dollars and prevent many projects from going forward, while significantly increasing rates for customers.” For the fourth consecutive year, President Obama’s budget proposal called for imposing new taxes on municipal bond interest earned by high-income households.
While the House and Senate budget resolutions will not reference SRF or WIFIA funding levels specifically, or make new policy regarding tax-exempt bonds, the letter is intended to draw attention to these issues before the appropriations process gets underway. For example, if the budget resolution provides additional budget authority in the Natural Resources and Environment Account, it could give appropriators more funding to work with when allocating dollars to EPA’s infrastructure programs later this year.
Congress has not approved a joint budget resolution since 2010, though federal budgeting rules say the House and Senate are supposed to agree to a resolution by April 15 of each year.