Environmental Infrastructure Programs under the Omnibus Budget Bill

Community and Economic Development – Blog by UNC School of Government

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Environmental Infrastructure Programs under the Omnibus Budget Bill

By Glenn Barnes

Published March 27, 2018

On Friday, March 23, President Trump signed a $1.3 trillion FY 2018 spending bill that will fund the federal government through September 30.   This budget funds several environmental infrastructure programs that help communities pay for crucial services such as water and wastewater.  How did those infrastructure programs fare in the budget?

In general, the budget funded most environmental infrastructure finance programs at the same level as in FY 2017 or higher.  In some cases, the programs had additional money added during the conference committee meetings between the House and Senate to finalize the bill.

Two major infrastructure programs that saw budget increases are the Environmental Protection Agency’s Clean Water and Drinking Water State Revolving Funds.  Under these programs, the EPA grants funds to all 50 states plus Puerto Rico to capitalize loan programs.  The programs also provide direct grant funding for the District of Columbia, U.S. Virgin Islands, American Samoa, Guam, and the Commonwealth of Northern Mariana Islands.  The Drinking Water SRF also allows states to set aside up to 31 percent of their federal funds for state water program management, technical assistance, and other local assistance.  Under the omnibus bill, the CWSRF allocation for FY 2018 is $1.693 billion, and the DWSRF allocation is $1.163 billion.

Another EPA infrastructure funding program to see an increase is the Water Infrastructure Finance and Innovation Act, or WIFIA.  Its allocation more than doubled under the omnibus budget bill, to $63 million for FY 2018.  WIFIA is a federal credit program administered by EPA for eligible water and wastewater infrastructure projects that provides long-term, low-cost supplemental loans for regionally and nationally significant projects.  A relatively new program, WIFIA is just now closing on its first loans.

Funding was also expanded for the Community Development Block Grant Program, or CDBG, which is operated by the U.S. Department of Housing and Urban Development.  The CDBG program is a flexible program that provides communities with resources to address a wide range of unique community development needs, including water and wastewater infrastructure.  The omnibus budget increased the funding allocation for this program in FY 2018 to $3.3 billion.  It should be noted that President Trump’s proposed FY 2018 budget had called for the elimination of this program.

The omnibus budget maintained the funding level for the Water & Waste Disposal Loan & Grant Program, which is administered by the US Department of Agriculture’s Rural Development.  This program provides funding for clean and reliable drinking water systems, sanitary sewage disposal, sanitary solid waste disposal, and storm water drainage to households and businesses in eligible rural areas, including areas with populations under 10,000 people, tribal lands in rural areas, and Colonias.  The program will receive $1.25 billion for FY 2018 under the omnibus budget, which matches its FY 2017 allocation.  As with the CDBG program, the President’s proposed FY 2018 budget had called for the elimination of this program.

The National League of Cities has put together a useful federal budget tracker tool which shows for these and many other federal programs the FY 2017 program allocation, the proposed allocation from the President’s budget, the allocation included in the initial House and Senate bills, and the final FY 2018 allocation from the omnibus budget bill.