Debate over detailed so­lutions to close the gap in funding the nation’s water infrastructure needs has begun. Rep. Earl Blumenauer (D-Ore.) introduced legislation on July 15 to establish a Clean Water Trust Fund for repairing and upgrading the nation's drinking-water and wastewater treatment systems.

Photo: The Office of Earl Bluemenaur

Blumenauer starts debate on water trust fund.

The bill aims to amass $10 billion in annual funding through a mix of taxes on bottled beverages, corporate profits, pharmaceuticals and products typically disposed of in wastewater. Almost half the funds would be distributed as grants and loans through the existing Clean Water State Revolving Loan Fund (SRF). Over one-third of the funding would be distributed as loans through the drinking water SRF. The remainder would support new programs that address security upgrades, energy efficiency, sewer overflow control, workforce development, reducing pharmaceuticals in water and various studies and demonstration projects.

During a July 15 hearing before a House Transportation and Infrastructure subcommittee, Blumenauer cited the Environmental Protection Agency’s most recent estimate, which claims a $534-billion gap between current investment and projected needs over 20 years.

The proposed plan would avoid a national water tax, which has been opposed by several water industry groups including the American Water Works Association and the National Association of Clean Water Agencies.

“A water tax could be a bill killer,” says Susan Bruninga, spokeswoman for NACWA. “A lot of our members would be opposed to that, mainly because the burden of meeting these needs is already falling on the ratepayer.”

Instead, the bill calls for a 4¢-per-container excise tax on water-based beverages, a 3% excise tax on items disposed of in wastewater, such as toothpaste, cosmetics, toilet paper and cooking oil, a 0.5% excise tax on pharmaceutical products and a 0.15% tax on corporate profits over $4 million.

The multiple-source strategy follows a May 2009 report from the General Accounting Office about the creation of a Clean Water Trust Fund that found it “may be difficult to generate $10 billion from any one [revenue] option alone.”

AWWA favors bolstering existing state revolving loan programs and removing the annual volume caps on private activity bonds for water projects rather than establishing a water trust fund.

NACWA’s Bruninga says passage of a trust fund bill is not likely to happen this year, but “it does provide a way to get the discussion out there.”