FY16 Appropriations

In March, NUCA’s Former Chairman, Ron Nunes, testified before the House Appropriations Committee’s subcommittee on Interior, Environment and Related Agencies. Nunes’ testimony centered on the growing distance between the dollars America’s infrastructure needs and the dollars being spent by the federal government. Nunes’ message was simple: Investment in infrastructure will grow the economy.

There is undeniable evidence of the benefits of infrastructure investment. Investing in infrastructure creates construction jobs, it creates jobs in the facilities built above the infrastructure, it generates tax revenue and it is more cost-effective to implement proactively than reactively. These are the facts, and they are undeniable.

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When the federal government spends tax dollars on infrastructure, each of the benefits listed above generate more tax revenue for the government to utilize, spend or pay down the deficit. This is the very message that must be reiterated to every elected official from every state and every district because not a single district in the entire United States can prosper without water, electric, energy and transportation infrastructure — not a single one. This is another fact.

America’s infrastructure is deteriorating and in desperate need of repair and replacement. Bridges are collapsing. Roads are ridden with potholes. Water lines are breaking. Sewer systems overflow into clean water systems. Storm water systems have not been expanded proportionate to population growth. More facts.

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Left to their own devices, cities and states would face significant difficulty, if not the outright inability, financing infrastructure without federal involvement. The sheer size, in both scope and cost, is enough to overburden even a state budget, let alone a small municipality. Requiring states to shoulder the cost and administration of infrastructure creates an inconsistent network across the country. If the federal government requires some sort of standard, but does not financially support those requirements, states are left with unfunded mandates that only serve to drive up costs and create new bureaucracies. This is why a financial investment by the federal government is essential. Infrastructure, along with defense, are two federal roles written into the Constitution.

Over the past year, the topics of infrastructure and transportation have been gaining momentum. More news coverage has been dedicated to the decrepit state of America’s infrastructure, and more legislation addressing how to move the needle positively has been introduced in Congress. But the conversation inevitably comes back to one thing: cost. How does the federal government finance these projects? One way is through the annual appropriations process.

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On June 16, the House Appropriations Committee passed the Department of the Interior, Environment and Related Agencies Appropriations Bill of 2016. This is the appropriations bill that funds America’s most prominent and effective water infrastructure financing program, the Environmental Protection Agency’s (EPA) State Revolving Funds (SRFs). This is the legislation where Congress puts its money where its mouth is.

So what does the money say? It says the same thing it’s been saying. Last year’s House SRF appropriations were the exact same dollar amount as this year’s. The Clean Water SRF proposal for last year and this year is $1.018 billion, and the Drinking Water SRF proposal for last year and this year is $757 million for a total of $1.775 billion for the two programs. This number is almost $600 million less than last year’s (FY15) enacted amount of $2.354 billion. For comparison, President Obama’s FY16 budget proposed $1.116 billion for the Clean Water SRF and $1.186 billion for Drinking Water SRF for a total of $2.302 billion, or $527 million more than the House Appropriations Committee levels, but $52 million less than FY15 enacted levels. The final numbers will depend on how the process goes. If the last several years are any indication, these numbers won’t be the final numbers. Since 2011, the enacted budget numbers have been basically flat despite wide variance between the House and Senate proposed numbers.

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But even the Committee is becoming keenly aware of the problems they face. From the report that accompanies any legislation passed by the Committee: “Little progress has been made to reduce the known water infrastructure gap. The Committee believes that the EPA and the states must expeditiously allocate existing funds to projects in order to address the pressing infrastructure needs facing the country. In addition, the Committee continues to encourage the EPA and water infrastructure stakeholders to promote alternate financing mechanisms for water infrastructure at local, state and federal levels as it is widely accepted that federal financing through the State Revolving Funds remains an important yet insufficient tool to address the Nation’s water needs. Public-private partnerships, greater access to financing from private activity bonds and improved asset management are just a few of the mechanisms that the Committee believes could serve to increase investment in a complementary way to federal appropriations and reduce costs.”

In other words, “we [the Appropriations Committee] know there’s a big problem that we can’t get ahead of through appropriations, so innovative financing mechanisms need to be utilized and created.”

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While we are always disappointed by not seeing an increase in federal appropriations, this appropriations battle is not yet finished and is following the same pattern as the past several years that have resulted in level funding (during a climate of spending cuts). What we can be proud of is evidence that our messaging is working. Within the appropriations bill are two specific priorities of NUCA. First, the bill would prohibit the implementation of the Waters of the U.S. rule that would redefine “navigable waters,” and the bill appropriates $4.4 million to implement the WIFIA program that will provide loans for water infrastructure projects.

Our message that investing in desperately needed infrastructure will create jobs and improve our country by closing the gap between what is needed and what is being spent is getting through to elected officials. The pressure will continue to rise as we maintain consistency and patience.

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Will Brown is NUCA’s Director of Government Affairs.