Why Tennessee Needs Federal Funding For Water Infrastructure

WATER Why Tennessee Needs Federal Funding for Water Infrastructure Fact Sheet • April 2009

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ur nation’s water infrastructure and economy are bound together. Aiding the former will help the latter. Unfortunately, these days, both are treading troubled waters. In communities in Tennessee and across the country, drinking water and sewerage systems are straining under the weight of decades of federal government underinvestment. In recent years, the State Revolving Funds were financed at some of the lowest levels in history. For fiscal year 2008, Tennessee received only $18 million, a mere 5.6 percent of the $326 million that the state’s water and sewer systems need.1 As the troubles with our water infrastructure mount, the country’s economy slides deeper into recession. Tennessee’s January 2009 unemployment rate reached 8.6 percent, or about 261,800 people, up from 5.3 percent a year earlier. One in 12 people in the labor force are now unemployed.2 Investing now in water and sewer systems to generate solid economic growth can lead the state out of the recession. Every federal dollar invested in infrastructure yields a $1.59 return to our states.3 The National Utility Contractors Association estimates that for every $1 billion spent on water infrastructure, nearly 27,000 jobs are created.4 The economic stimulus legislation passed by Congress in February 2009 provides more money to water infrastructure than the country has seen in recent years, but this one-time allotment cannot cure the problems plaguing many communities. In fact, the bill provides water and sewer systems with less than one-third of what the Environmental Protection Agency estimates we should spend each year just to maintain them.

projects at a total cost of at least $142 million.5 In 2008, the state received only $8.5 million in federal funding6 — enough to finance 5.9 percent of its needs.

Tennessee’s Water Infrastructure Funding Gap: Tennessee’s water needs outpace its current ability to fund projects by a large margin.

Federal contributions to Tennessee’s drinking water funding efforts have decreased by 33.8 percent since the Drinking Water SRF was implemented in fiscal 1997 and 50.7 percent when adjusted for inflation.7

For the Drinking Water State Revolving Fund (SRF) program, the state’s most recent Intended Use Plan lists 51

For the Clean Water State Revolving Fund program, which goes toward wastewater infrastructure, the state’s

most recent Intended Use Plan lists 78 projects at a total cost of $184 million.8 In 2008, the state received $9.9 million in federal funding9 — enough to finance 5.4 percent of its needs. Federal contributions to Tennessee’s wastewater funding efforts have decreased by 66.8 percent since the Clean Water SRF was fully implemented in fiscal 1991 and 79.0 percent when adjusted for inflation.10 Job Creation: Fully addressing Tennessee’s currently listed water needs of $326 million would spur 8,696 employment opportunities, according to National Utility Contractors Association estimates for job creation from water infrastructure investments. That could put back to work one out of every 30 unemployed people in the state.

Endnotes 1

Water Quality: According to EPA’s 2006 National Water Quality Inventory assessments, 37 percent of river miles and more than one-fifth of the state’s lake waters are impaired, and 35 percent of its rivers do not support recreation.11 Legislative Solutions: A comprehensive, long-term solution is a dedicated source of public funding for water infrastructure. This would help communities in Tennessee and across America keep their water clean, safe and affordable. It would unburden overtaxed state and municipal governments of the cost of water infrastructure repairs. Such an investment also would create employment opportunities and give our economy a much-needed boost. Two legislative solutions exist. Clean Water Trust Fund: A federal water infrastructure trust fund bill will be introduced during the current legislative session. As with the trust fund for highways and airports, we should have a Clean Water Trust Fund to provide municipalities with the funding they need to keep our water safe and clean for future generations. The trust fund should distribute money to publicly owned water and wastewater systems. It also should ensure that funds be made available for research and implementation of green infrastructure and conservation practices. National Infrastructure Bank: Related to the trust fund is a proposed national infrastructure bank to raise and distribute the money necessary to upgrade drinking water and wastewater systems, highways and other underpinnings of our nation’s prosperity. Policy-makers should strictly limit private sector involvement in water infrastructure to financing only. The public should maintain ownership and control of public water and sewer utilities because it does a far better job of management and operation.

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U.S. Environmental Protection Agency, Office of Water. “Tentative distribution of Drinking Water State Revolving Fund appropriation for fiscal year 2008.” May 19, 2008; U.S. Environmental Protection Agency, Office of Water. “FY 2008 Clean Water State Revolving Fund Title VI Allotments.” January 28, 2008; Tennessee Department of Environment and Conservation, State Revolving Fund Loan Program. “Drinking Water State Revolving Fund FY2008-2009 Priority Ranking List.” May 2008 at 1-5; Tennessee Department of Environment and Conservation, State Revolving Fund Loan Program. “Clean Water State Revolving Fund FY2008-2009 Priority Ranking List.” May 2008 at 1-5. United States Department of Labor, Bureau of Labor Statistics. [Press Release]. “Regional and state employment and unemployment: January 2009.” March 11, 2009. Schwartz, Bernard L. and Schwenninger, Sherle R. “A Public Infrastructure–-Led Economic Recovery Program.” December 4, 2008; Zandi, Mark. Chief economist and co-founder, Moody’s Economy.com. Testimony on Economic Stimulus For Small Business: A Look Back and Assessing Need For Additional Relief. U.S. House Committee on Small Business. July 24, 2008. National Utility Contractors Association. [Press Release]. “New CWC Report Demonstrates Immediate Economic Impact of Water/Wastewater Infrastructure Investment?” January 28, 2009. Tennessee Department of Environment and Conservation. “Drinking Water State Revolving Fund FY2008-2009 Priority Ranking List.” May 2008 at 1-5. U.S. Environmental Protection Agency, May 19, 2008. Ibid; U.S. Environmental Protection Agency, Office of Water. “Distribution of DWSRF funds.” June 23, 2006; Sahr, Robert C. “Inflation conversion factors for years 1774 to estimated 2019.” Oregon State University, Political Science Department. January 16, 2009. Tennessee Department of Environment and Conservation, “Clean Water State Revolving Fund FY2008-2009 Priority Ranking List.” May 2008 at 1-5. U.S. Environmental Protection Agency, January 28, 2008. Ibid; U.S. Environmental Protection Agency, Office of Water. “Clean Water State Revolving Fund Allotments.” April 4, 2007; Sahr, 2009. U.S. Environmental Protection Agency, Office of Water. National Assessment Database. Available at www.epa.gov/waters/305b/, accessed February 6, 2009.

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