May 04, 2015

Alleviating the Funding Burden

Neda Simeonova

In February, the Obama administration released its proposed FY2016 budget, which includes $2.3 billion for the Drinking Water and Clean Water State Revolving Funds (SRFs), up from $1.775 billion for FY2015.

Many feel that the new budget shows a renewed commitment to making the investments needed to protect public health and the environment, as well as a renewed emphasis on the SRFs as a tool for states and communities.

A recent W&WD online poll asked readers what they thought of the FY2016 budget, and 65% of respondents agreed that, while the budget increase demonstrates commitment to protecting the nation’s water resources, it is not enough to address the nation’s current water infrastructure needs. Another 25% felt that additional private investment options are needed to address water quality needs adequately.

These poll results are not surprising. While major federal investments were made in water infrastructure in the 1970s and 1980s, current public funding continues to fall short as local, state and federal budget deficits constrain necessary investments for repairs and improvements. As a result, many water infrastructure assets are nearing the end of their intended service lives, with some reaching the breaking point.  

Earlier this year, the Obama administration announced that building a 21st-century infrastructure is a critical component of its efforts to accelerate economic growth, create jobs and improve our country’s economic competitiveness. As part of these efforts, the administration introduced new steps that federal agencies may take to bring private sector capital and expertise to improve our nation’s infrastructure. 

The efforts include the launch of a new Water Finance Center at the U.S. Environmental Protection Agency. “The center will work closely with municipal and state governments, utilities and private sector partners to use federal grants to attract more private capital into projects and promote models of public-private collaboration that can address the real needs of cities and towns to provide safe water, rebuild sewer systems, and keep streams and rivers clean,” according to a release issued by The White House Office of the Press Secretary.  

Additionally, the administration announced the creation of a new municipal bond, Qualified Public Infrastructure Bonds, to provide opportunities for municipalities seeking public-private partnerships. 

These efforts, along with the Build America Investment Initiative, which was launched in July 2014, are designed to help bring up the current level of infrastructure investment in the U.S. and fund worthwhile projects “by bringing together the public and private sector to identify challenges and explore creative financing strategies.”

How much these efforts will help remedy the more than $600 billion needed over the next 20 years to address our nation’s water infrastructure remains to be seen; however, with Congress unable to fully share the financial responsibility necessary to maintain and upgrade our water infrastructure, and with states and municipalities continuing to shoulder a funding burden that in many cases is beyond their budgets’ ability to accommodate, a much-needed infusion of private dollars might offer a viable and efficient solution for communities to get more work started and completed faster. Ultimately, taking the right steps toward infrastructure leadership rests on the innovation, determination, and necessary investments from both public and private sectors.

About the author

Neda Simeonova is editorial director of W&WD. Simeonova can be reached at or 847.391.1011.