The issue?
America’s infrastructure is crumbling, while some areas saw improvement in the last year others declined. Infrastructure is important to the economy, global competition, and quality of life for our citizens. The American Society of Civil Engineers granted America a D+ grade last year. All infrastructure categories received a C+ or lower; except rail which received a B (see full report card here). Though none received a failing grade, majority of our infrastructures are standing at poor quality.
This means that we as citizens are paying more on goods and services, spending more time in transit due to poor roads, and suffering from unreliable utilities. “Our nation’s infrastructure challenges remain significant but solvable. Through strategic, sustained investment, bold leadership, thoughtful planning, and careful preparation for the needs of the future, America’s infrastructure will be improved and restored” (ASCE).
What is the Administration’s solution?
A comprehensive infrastructure bill to invest and improve all of America’s infrastructures by investing over the next 10 years, approving and encouraging innovative projects, meeting the needs of rural America, empowering State and local authorities, and training the American workforce to address current and future infrastructure needs.
What are the bill’s goals?
There are six principles included:
1. $200 billion in Federal funding to encourage $1.5 trillion investments with State, local, Tribal, and private level partners.
2. New investments in rural America.
3. Authority given to State and local governments.
4. Removal of regulatory barriers.
5. Permitting for infrastructure projects to be streamlined and shortened.
6. Support and strengthen America’s workforce
How is the funding to be allocated?
Breakdown of the $200 billion Investment:
· $100 billion will create Incentives Programs
· $20 billion dedicated to the Transformative Projects Program, which “will focus on projects that could have significant positive impact on States, cities, and localities but may not attract private sector investments” (briefing statement).
· $20 billion allocated to expanding infrastructure financing programs; of which $14 billion will go to expanding a number of existing programs (TIFIA, WIFIA, RRIF, and utility lending), and $6 billion will go to expanding Private Activity Bonds.
· $50 billion will be devoted to a new Rural Infrastructure Program to rebuild and modernize rural America
· $10 billion will go to a new Federal Revolving Fund, “which will reduce inefficient leasing of Federal real property which would be more cost-effective to purchase”
How is water included?
Drinking and wastewater systems, waterways, and water resources are addressed in the bill.
Drinking water received a D grade and wastewater received a D+ from the ASCE, and with an ever-growing population U.S. water infrastructure is in dire need of improvement.
The American Society of Civil Engineers suggest solutions to raising these grades:
· Reinvigorate the State Revolving Loan Fund Program
· Fully fund the Water Infrastructure Finance and Innovation Act (WIFIA) at its authorized level
· Preserve tax exempt municipal bond financing to provide communities with affordable access to capital for water infrastructure
Included in Infrastructure Bill:
· Authorize Clean Water Revolving Fund for privately owned public-purpose treatment works (Part 2, Section II, A.Financing)
· Expand Water Infrastructure Finance and Innovation Act funding and broaden program eligibility (Part 1, Section IV, C)
· Broaden eligibility of PABs (Private Activity Bonds) (Part 1, Section IV, E)
What is the timeline for the bill?
It is unclear when the bill will be passed. According to The Washington Post, Congress has only allocated $21 billion as they struggle to come to an agreement on the source of funding for the bill and are hesitant to add to the deficit. “House Speaker Paul D. Ryan (R-Wis.) thinks the best solution for now is to “break it into pieces” instead of doing one massive bill” (Heather Long, March 29).
What does this mean for water utilities?
While it appears the Administration’s infrastructure bill will not be passed in entirety, part of the water infrastructure section could potentially influence utility companies. Under the water programs category, the bill calls to modify the Clean Water Act in order to level the playing field for service providers both publicly and privately owned.
In the meantime, the Senate Environment and Public Works Committee has passed their own water infrastructure act. Last week the committee announced their bill will “cut Washington red tape, create jobs and grow our economy” by “increasing water storage in the West, protect communities from dangerous floods, and upgrade old drinking water systems” (Committee Chairman, John Barrasso). This could be a win for water utilities and our water infrastructure.
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Sources:
Administration’s Bill:
ASCE Report Card:
Washington Post, Bill Timeline: https://www.washingtonpost.com/news/wonk/wp/2018/03/29/trump-promised-1-5-trillion-in-infrastructure-spending-hes-1-percent-of-the-way-there/?noredirect=on&utm_term=.4380f4b7a979
Senate Infrastructure Bill:
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