On Tuesday, the Obama Administration released its Fiscal Year (FY) 2015 Budget request proposing deep cuts to water infrastructure investment programs. Specifically, the Administration’s budget includes $581 million in cuts to the Clean Water and Drinking Water State Revolving Fund (SRF) programs, requesting $1.018 billion and $757 million for each program respectively. This is the third consecutive budget request that has proposed steep cuts to these Funds.
In addition to the serious cuts to critical water infrastructure programs, this year’s budget request again includes a proposal to limit the amount of tax liability wealthy individuals can claim on interest income received from investments in municipal bonds to 28%. According to a report released last year by NACWA and the Association of Metropolitan Water Agencies, this policy proposal would likely increase water and wastewater project financing costs significantly, preventing approximately as $6 billion annually in projects from going forward.
The President’s proposal to slash critical water infrastructure programs and financing tools could not come at a worse time for municipal clean water utilities already facing severe financial pressures. Fully funding the SRF programs and maintaining the tax-exemption for investments in municipal bonds have never been more critical. Communities need the Federal government to remain a reliable, long-term partner in meeting the requirements of the Clean Water Act and now is not the time to begin retreating on our clean water goals. NACWA’s utility members are driving improvements to the local economy and spurring job growth, making it critical for the federal government to strengthen, not reverse, their support for utility efforts. NACWA will continue making the case to Congress that maintaining a strong commitment to clean water investments in the FY15 budget is critical and we will be working throughout this year to ensure these cuts do not go through.
Click here for a chart that compares proposed discretionary spending levels for EPA's water programs from FY2012 through the current FY2015 budget proposal.