Federal Tax Could Fund
Infrastructure, Utility Manager Suggests to Conference
A federal trust fund is one possible solution to funding repair and
replacement of drinking water and wastewater infrastructure, a manager
of a water utility told a conference March 30.
Money for the fund could be provided through an excise tax on some
entity, according to Buddy Morgan, general manager of the Water Works
and Sanitary Sewer Board in Montgomery, Ala.
Because utilities resist the idea of a tax on water, however, "we've got
to figure out where the money will come from," he told the annual
legislative and regulatory conference of the Association of Metropolitan
Possible funding sources could include polluters or money collected from
environmental enforcement actions, Morgan said.
In 2001, the Water Infrastructure Network estimated that needed
infrastructure upgrades over the next 20 years would cost about $1
trillion, or about $23 billion annually (31 DEN A-10, 2/14/01).
However, since then, utilities have examined their assets more closely
and found much more than previously thought is needed, he said. The true
figure is probably closer to $2 trillion, according to Morgan.
Federal Investment Has Decreased
Federal investment in infrastructure has decreased 75 percent since 1980
and a federal grants program ended in 1982, he said.
As this federal funding dried up, though, utilities did not raise their
rates in accordance with depreciation, Morgan said. "We're in the
dilemma we're in today because we did not do that," he said.
State revolving loan funds under the Clean Water Act and Safe Drinking
Water Act intended to fund infrastructure upgrades will not cover total
In its fiscal 2004 budget request, EPA requested $850 million for the
clean water state revolving loan fund, $500 million less than was
enacted for fiscal 2004. The agency requested $850 million for the
drinking water state revolving loan fund, the amount enacted for fiscal
2004 (23 DEN A-2, 2/5/04).
A federal trust fund would provide short-term help only to utilities,
"Once we get to the point to where our systems are stable, then it is
our responsibility as managers and directors of utilities ... to ensure
that we maintain those assets," he said.
By Patricia Ware