States Speak Out

The growing funding gap has taken a serious toll on states, many of which face sizable and growing backlogs of clean water projects. “As infrastructure ages and the population grows, the demand for financial assistance increases,” said Brian Howard, SRF coordinator with the Washington state Water Quality Program. “The demand for financial assistance over time far exceeds the funds available. For example, for [fiscal] 2008 we offered $70.6 million and funds requested for high priority water quality projects exceeded $141.7 million,” he explained.²³

“The first thing anyone from the [Clean Water] State Revolving Fund will tell you is that there are un-met needs,” agreed Scott Jordan, director of Massachusetts’ Water Pollution Abatement Trust.²⁴ Massachusetts’ clean water SRF budget for 2007 is $398 million, a little less than $37 million of which came from the federal government.²⁵ Meanwhile, ASCE estimates Massachusetts requires $4.6 billion to keep water clean.²⁶

Geoff Andres, administrator of Illinois’ SRF program, commented that despite SRF assistance, “Our forecasts show that demand will remain strong in the future…If you look at our demand in terms of a three-year window for projects proceeding in the program (projects for which a facility plan has been submitted), we have a three-year ‘need’ of $693.5 million, a number that would support an annual program in excess of $200 million, and that is significantly over our $140-$150 million annual average.” ²⁷

“There are currently not enough funds to satisfy the needs of [our] wastewater communities,” said James McGoff, director of Indiana’s Finance Authority for Environmental Programs. “The backlog is growing.” ²⁸

California, one of the nation’s primary economic engines, also shows the largest clean water funding gap. The state expects enough funding to undertake 41 projects in fiscal 2008 at a cost of nearly $500 million. Its most recent Intended Use Plan, meanwhile, lists 691 needed improvements.²⁹ They will cost an estimated $18.5 billion to complete, and EPA’s most recent Clean Water Needs Survey suggests the state will require $20 billion in infrastructure spending over the next 20 years. “There is no way that we can fund all of those projects,” said Liz Kanter, information officer with the California EPA State Water Board.³⁰

Not all states are in such rough shape. States with newer infrastructure and smaller populations have fewer pressing concerns. “We’re blessed in Wyoming that our program has always had enough funds,” said Brian Mark, with the Department of Environmental Quality.³¹ Even so, Wyoming, the most sparsely populated state in the nation, supplements its CWSRF funds with money drawn from a statewide gas tax.

But even many states that can meet current needs express uncertainty over what will happen down the road. Although New Jersey has been able to keep up with demand so far, “The future looks bleak,” said Maryclaire D’Andrea, CFO of the New Jersey Environmental Trust.³²

That future could be particularly bleak for small communities. The vast majority of water distribution systems in the United States serve populations of 3,300 people or fewer, with 58 percent serving communities of no more than 500.³³

These smaller systems often need the most assistance. Sixty four percent of CWSRF loans since the program’s inception have gone to communities with populations of 10,000 or fewer.³⁴ That number has jumped in recent years: 68 percent in 2005 and 72 percent in 2006. These small communities, without the resources to pay back private market loans, depend on federal money to keep their water safe.

State Key Findings

California

California’s current wastewater needs are the greatest in the nation. The state’s 2008 Intended Use Plan lists 691 pressing projects that will cost nearly $10.5 billion to complete, and EPA’s most recent assessment says the state will require more than $20 billion in wastewater spending over the next 20 years. California expects to have $285 million available, including federal funding, for wastewater infrastructure projects in 2008. The state’s needs are around 210 times the projected federal 2008 investment.

New York

Under current budget projections, New York will have only 55 percent of 2007 resources available for 2008 spending. The state’s annual list presents 148 projects costing nearly $3.9 billion – more than 50 times its expected federal allotment – while its long-term projections count 793 projects at a cost of nearly $11 billion.

Minnesota

Minnesota’s wastewater needs – 251 projects that will cost nearly $1.8 billion to complete – are five and a half times its current funding capabilities and more than 90 times its 2007 federal allotment. If 12 projects submitted but not yet approved for its 2008 Intended Use Plan are accepted, the state’s needs will increase by $51 million.

Texas

In order to compensate for needs costing more than 23 times its expected federal grants and 59 percent more than its projected funding capabilities, Texas will be forced to take on more than $220 million in leveraged debts in 2008.

Oregon

In 2008, Oregon expects to face an $86.6 million shortfall between its anticipated spending on wastewater infrastructure and its $133 million in needed improvements. The federal government’s expected contributions will account for just 14 percent of the state’s needs.

Washington

Washington’s clean water infrastructure requires nearly $142 million in improvements and maintenance in 2008, yet the state will be able to fund only half that based on current budget projections. The state’s needs amount to more than seven and a half times 2007 federal contributions.

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