We’ve been keeping a wary eye on D.C. as budget negotiations at the federal level have threatened to adversely impact funding for water infrastructure and source protection. But, this week, we finally heard some good news, as lawmakers rallied to introduce an alternative infrastructure-finance bill: The Sustainable Water Infrastructure Investment Act (S. 939).
Introduced by US Senators Robert Menendez (D–NJ) and Mike Crapo (R–ID), and US Representatives Bill Pascrell, Jr. (D–NJ) and Geoffrey Davis (R–KY), the bill focuses specifically on generating funding for the repair and rehabilitation our current crumbling infrastructure. The National Association of Water Companies (NAWC) predicted the bill, “will stimulate the economy through investment in our nation’s aging water infrastructure.”
The bill’s main goal is to lift the state volume cap on exempt facility bonds and private activity bonds for water infrastructure projects. The hope is that by removing bond caps, funding for water projects will finally be raised to a crucial level of support already granted to areas considered “critical” to the nation’s infrastructure: airports, high-speed rail, and solid waste disposal, all of which are all currently exempt from existing caps. Additionally, the bill should generate significant tax revenue for state and local governments across the country, which will allow those communities to maintain their own, local projects, while also supplying $354 million and 1.4 million jobs over the next 10 years. The legislation is also expected to generate $50 billion in private capital investment.
Which all dovetails nicely into the NAWC’s assertion that, “To continue protecting public and environmental health and economic vitality across the country, significant new investment is needed. Powerful financing tools such as exempt facility bonds (PABs) will encourage private capital investment, create jobs, and provide more affordable financing for our essential water infrastructure.”
The NAWC is particularly impressed the private/public partnership fostered by the bill, in part because this approach, “provides states and municipalities with a greater ability to invest in their water and wastewater infrastructure by partnering with professional private water companies, including transferring financial risk through the removal of state volume caps on private activity bonds for public-purpose water facilities. The removal of this constraint will bring together the power of public water service and free enterprise.”
In a statement applauding the introduction of the Act, Michael Deane, executive director of NAWC said, “There is a $500 billion need for capital investment in our nation’s aging water and wastewater infrastructure. Exempt facility bonds are the single-most effective financing tool the federal government can provide to communities to bring new money into long-term, capital-intensive infrastructure projects. This legislation will better equip local officials to meet the challenges of maintaining or improving essential water infrastructure by making repairs and construction more affordable for municipalities and, ultimately, customers.”
So what do you think? Does the bill have a chance of being ratified? Is the future of funding predicated on cooperation between public and private interests? Are bonds the answer, or are other options being overlooked in favor of an easy fix? And will removing the caps on investment highlight the critical nature of our aging water infrastructure, and finally raise the security and safety of our conveyance system to the level of notoriety and importance it so richly deserves?