Funding for EPA would be cut by nine percent next year while the Drinking Water and Clean Water State Revolving Fund (SRF) programs would see their funding reduced by more than $580 million under a draft FY16 Interior-EPA spending bill approved by the House Appropriations Committee on June 16.
If enacted, the bill would reduce funding for the DWSRF to $757 million, nearly $150 million below its current level and to an amount that represents the program’s lowest appropriation since the 1998 fiscal year. The CWSRF would be cut by more than $430 million, to $1.018 billion. Overall, the bill would provide EPA with $7.4 billion, $718 million below the agency’s FY15 appropriation.
In comparison, as part of his FY16 budget request President Obama sought $8.6 billion for EPA overall, including $1.186 billion for the DWSRF and $1.116 for the CWSRF.
The committee-approved bill would allow states to use SRF dollars for green infrastructure projects, but would eliminate a current requirement that states set aside 10 percent of their CWSRF allotment for this purpose. Ten percent of a state’s CWSRF dollars, and 20 percent of its DWSRF funds, would be reserved for low or negative interest loans or grants to eligible communities. American-made iron and steel requirements would continue to apply to projects funded through the DWSRF, though EPA would retain the power to waive the requirement in cases where it would increase total project costs by more than 25 percent.
The report accompanying the bill also offers $4.4 million to facilitate EPA’s implementation of the new Water Infrastructure Finance and Innovation Act (WIFIA) pilot program for major water and wastewater projects. The funding would be drawn form EPA’s Water Quality Protection program (funded through the Environmental Programs and Management Account, as opposed to the State and Tribal Assistance Grant account, which funds the SRF programs). The report explains the committee’s belief these funds will provide EPA with “flexibility to identify and aggressively hire mission critical talent areas at any point during the next two years,” and expresses confidence that EPA will be “positioned to propose and implement the fully authorized level” for WIFIA in the 2017 fiscal year. The report does not include any FY16 funding for WIFIA loans.
Going forward, the bill faces a difficult path to enactment. A June 15 letter from the White House criticized cuts throughout the proposal, as well as the bill’s compliance with sequestration budget caps that most Democrats call inadequate, but did not single out the SRF cuts for criticism. The letter also expressed concern with a provision that would block implementation of EPA’s Clean Water Rule, which the White House said would cause “uncertainty about waters covered by the Clean Water Act to continue to prevail,” while leading to “more costly, difficult, and slower permitting process for business and industry.”