February 2, 2015
Diane VanDe Hei, Executive Director of the Association of Metropolitan Water Agencies (AMWA), released the following statement today in response to the President’s FY16 budget request:
“President Obama’s fiscal year 2016 EPA budget represents a milestone, as it includes the administration’s first funding request for the new Water Infrastructure Finance and Innovation Act (WIFIA) loan program. While its proposal of $5 million for WIFIA start-up costs is a good first step, we will encourage Congress to provide the program’s full $25 million appropriation in 2016, so communities across the country may begin taking advantage of these new loan opportunities as soon as possible.
“The budget seeks a total of $2.302 billion for the Drinking Water and Clean Water State Revolving Fund (SRF) loan programs – nearly equal to their combined FY15 appropriation – while proposing to boost the DWSRF by $279 million. This request should put to rest unfounded fears that new funding to support WIFIA would only come at the expense of the existing SRFs. Instead, this budget shows that both programs can work together to deliver low-cost financing for a variety of water and wastewater infrastructure projects nationwide.
“Finally, AMWA will urge Congress to reject the budget’s proposal to limit federal tax benefits tied to interest income, including interest income earned on municipal bond investments. Since 1913, interest earned on municipal bonds has been exempt from federal income taxes. This has led investors to accept lower interest rates from communities borrowing to fund infrastructure improvements – which helps keep water service affordable for local ratepayers.
“A recent AMWA study found that fully taxing municipal bond interest nationwide in 2012 would have increased water infrastructure financing costs by $9 billion that year alone – a cost that would essentially serve as a new tax on municipalities and ratepayers. AMWA urges Congress to reject this and any other calls to erode the tax-exempt status of municipal bond interest.”