FY16 Budget Deal Trims SRFs, Delivers Another Round of WIFIA Admin Funds

An omnibus budget agreement approved by the House and Senate and signed into law on December 18 finalizes federal spending for the remainder of the 2016 fiscal year, but holds overall EPA funding steady while trimming dollars allocated to its largest water infrastructure funding programs.

The final FY16 appropriations bill delivers $8.14 billion for EPA in FY16, equal to the agency’s 2015 funding amount – a level that House Republicans boasted remains “lower than fiscal year 2010” funding.  But the bill reduces funding for both the Drinking Water and Clean Water State Revolving Funds (SRFs) compared with their 2015 allotments, while also rejecting the Obama Administration’s proposal to shift some resources from the CWSRF to the drinking water fund.

Specifically, the funding bill provides $863.2 million for the DWSRF – well below President Obama’s request of $1.186 billion and more than $40 million below the program’s FY15 appropriation.  But while the figure represents the lowest DWSRF appropriation in several years, it is significantly above the FY16 funding levels proposed by the House and Senate Appropriations Committees, each of which would have cut DWSRF funding to below $780 million.

The CWSRF, meanwhile, will see its funding cut by $55 million to $1.394 billion.  This actually exceeds the $1.116 billion requested in President Obama’s budget, which EPA Administrator Gina McCarthy described in testimony earlier this year as part of an effort to shift “funds away from wastewater into drinking water.”  Congress, however, failed to embrace this recommendation.

The explanatory statement accompanying the omnibus bill promises $2.2 million in administrative funds for EPA to continue implementing the Water Infrastructure Finance and Innovation Act (WIFIA) pilot program.  Though the statement does not reference WIFIA directly, it directs EPA to allocate its Water Quality Protection funding “consistent with fiscal year 2015” – thereby continuing Congress’ FY15 requirement that EPA reserve $2.2 million for WIFIA implementation.  This amount represents the maximum administrative set-aside lawmakers authorized for WIFIA when enacting the pilot program in 2014, although President Obama’s FY16 budget request sought $5 million for WIFIA implementation dollars.

The chart below provides a quick look at how EPA’s water infrastructure funding in the omnibus bill compares with FY15 levels and earlier proposals from President Obama and congressional appropriators.