U.S. Senator Charles Schumer on a press conference call March 25 criticized the recent budget request that would slash funding for over 340 critical, and often mandated, sewer upgrades in New York, calling it an unacceptable hit to local budgets, property taxes, the environment and New York’s aging infrastructure.
Specifically, the Administration’s FY2015 budget request cuts funding for the Clean Water State Revolving Fund (CWSRF), through the Environmental Protection Agency (EPA), by $430 million, which translates to an approximately $40 million cut for New York alone.
There are more than 340 sewer projects in Upstate New York and Long Island that have pending applications for such funding in 2014 alone, with hundreds more waiting to be funded in future years. Schumer called on his colleagues on the Senate Appropriations committee to provide level or increased funding for the overall sewer program, especially since the program is already woefully underfunded due to a steady decrease in its budget over the past few years — more than $600 million since FY2010.
Schumer is fighting to stop that trend in its tracks.
Schumer also revealed that the Clean Water grant program, pioneered by Schumer in the stimulus legislation, which allows states to use a portion of the CWSRF as direct grants instead of loans, has decreased New York’s share from a high of $112 million in 2010, to just $10 million in 2013.
Schumer introduced a proposal that would allow States to utilize a 50 percent grant option of their total funding, rather than the current 20 percent.
“New York has some of the oldest sewer systems in the country, and we should be doing everything in our power to provide the funding that is needed to repair and upgrade them,” said Senator Schumer. “Unfortunately, the budget request released by the Administration earlier this month cuts funding where it’s sorely needed, making it extremely difficult for New York’s cities and towns to make long overdue – and often mandated – upgrades to their sewer systems. A cut in federal funding could jack up water utility bills, and could jeopardize the ability to complete projects that are already underway or soon to get started. Investing in our water and wastewater infrastructure is absolutely essential in order to attract businesses to our urban, suburban and rural communities, and I am going to fight hard to make sure New York gets its fair share of infrastructure dollars so we can continue to make these much needed repairs.”
On the call, Schumer unveiled a list of pending 2014 sewer project applications for CWSRF funding to demonstrate demand in New York. Schumer said that if sufficient funding for these key programs is not held at current levels or increased, sewer systems throughout the state could fall into further disrepair, creating another pressure on local property taxes.
Schumer has long pushed for federal aid to repair New York’s aging sewer systems, among the oldest in the country, because each dollar invested helps to create jobs, repair crumbling water and wastewater infrastructure, and protect public health and environmental quality.
The proposal outlined by Schumer today would maintain or increase the existing funding level of $1.45 billion nationally and increase the optional grant amount from 20 percent to 50 percent.
This would, at a minimum, maintain New York’s total sewer appropriation at $155 million and allow more than $77 million of that to be used as grant.
Demand for Federal Sewer Project Funding:
For years, Upstate New York communities have been grappling with aging sewer infrastructure that threatens the environment and public health of residents.
As sewage systems age, contaminants are more likely to leak into soil and waterways; and pathogens and viruses are more likely to be released, which can affect local wildlife and fisheries and threaten drinking water.
To make the upgrades that are needed, villages, towns, and cities must make billions of dollars’ worth of investments over the coming decades, something that is difficult for many smaller municipalities to afford. It is particularly difficult for small suburban and rural areas because they tend to have a smaller tax base and population, making the high cost of repairing or upgrading sewer systems a major strain on local budgets.
Not only do local governments repair and upgrade their sewer infrastructure due to concerns about the environment or public health, but often they are mandated to do so in order to comply with the federal Clean Water Act. The Clean Water Act requires communities to improve water quality, achieve and maintain compliance with environmental laws, protect aquatic wildlife, protect and restore drinking water sources, and preserve our nation’s waters for recreational use.
In order to comply with the Clean Water Act, local governments must invest significant funds into sewer repair and upgrade projects.
Schumer warned that without the funding from the CWSRF that makes the generous loan terms and grant money available, these cities and towns will have an even harder time complying with the law than before. Specifically, many communities, especially those under a legally binding Consent Order, have to upgrade sewer infrastructure due to federal requirements limiting nitrogen discharge and combined sewer overflow (CSO), a type of sewer system common in New York that collects wastewater and storm-water in a single pipe system.
In order to help local governments afford these major sewer infrastructure projects, the EPA provides funding to states through the Clean Water State Revolving Fund program. CWSRF funding allows each state to maintain a revolving loan fund that provides independent and permanent sources of low-cost financing to local cities and towns for a wide range of water quality infrastructure projects. This low-cost financing enables local governments to access loans with significantly lower interest rates (1.7% on average) for their sewer infrastructure projects than the market rate (3.7%).
These low-interest loans make it easier and more affordable for states to undertake major sewer infrastructure projects.
CWSRF is particularly important to New York because the state gets approximately 11% of program’s funding level every year. New York’s funding level is so high due to a combination of population, age of infrastructure and cost to undertake major infrastructure projects. In the 25 years CWSRF has been in existence, the program has financed nearly 1,650 projects and New York has benefitted from close to $13.6 billion in leveraged financing from just $1.95 billion in federal investment.
According to Schumer, failing to provide robust funding for CWSRF would also be a missed opportunity to create jobs and spur economic development. Studies indicate that for every $1 billion invested in infrastructure projects, over 26,000 jobs are created. Beyond job creation, investment in sewer infrastructure meets public health and safety needs and helps communities attract new businesses and residents.
Push for More Grants:
Schumer also stressed the need for New York to have an increased ability to put the funding it receives through the CWSRF toward grants, not just loan interest subsidies. Schumer explained that many of the communities that are most in need of aid in New York will not start the process of securing an interest subsidy through New York State Environmental Facilities Corporation (EFC) if the EFC is not able to provide grant money as part of the funding package. These grants are a much-needed catalyst that spurs municipalities to move faster on sewage infrastructure projects since they want to move quickly in order to capitalize on the available grant money.
Schumer is pushing for States to have the flexibility to provide up to 50 percent of their funding in grants.
“Making it easier for New York State to award some of this funding in the form of grants, as opposed to only loans, will provide the incentive that many communities need to take advantage of this program,” added Schumer. “When our cities and towns know that grant money is available that can help lower the risk of undertaking a major infrastructure project, they are more likely to dive in and make the repairs and upgrades that are needed.”
Total CWSRF Funding for New York State
Allowable Grant Amount