I have blogged previously about the issues facing water/wastewater systems in the U.S. and the challenge of funding replacement of aging infrastructure and upgrading to meet the requirements of the Clean Water Act.  According to the ASCE, most jurisdictions are spending between 1 and 1.5 percent on infrastructure, which is down from 5 to 6 percent spent in the 1960s and ’70s.  In September 2002, an EPA Gap Analysis concluded that if there is no increase in investment, there would be a $6-billion gap between current annual capital expenditures for wastewater treatment ($13 billion annually) and projected spending needs.  The AWWA has estimated that the cost of repairing and expanding U.S. drinking water infrastructure will exceed $1 trillion in the next 25 years and $1.7 trillion over 40 years.

One of the most important funding mechanisms are state revolving funds which provide low interest loans for water and wastewater infrastructure.  The House Appropriations Subcommittee on Interior, Environment and Related Agencies of the U.S. House of Representatives has approved a FY2013 funding bill that will cut state revolving funds for water and wastewater.

A bill has been introduced in Congress that will provide a protected source of revenue for water infrastructure similar to the Highway Trust Fund, which is funded by a tax on gasoline.  The Water Protection and Reinvestment Act proposes to raise revenue by assessing small fees on a broad base of those who use water and contribute to water pollution inlcuding

• 3 cent per container excise tax on water-based beverages.
• 3% excise tax on items disposed of in wastewater, such as toothpaste, cosmetics, toilet paper and cooking oil.
• 0.5% excise tax on pharmaceutical products. (Pharmaceutical residues found in our nation’s water bodies are an increasing concern for clean and drinking water utilities.)

The proposed revenue base has been analyzed by the Government Accountability Office (GAO) report and it is estimated that this would raise around $6.5 billion a year. The funds would provide grants and loans through the existing Clean Water State Revolving Loan Fund (CWSRF), as well as grants for energy and water efficiency; sewer overflow control; research, development, and technology demonstration; and workforce development.

It is reported that the bill is supported by the American Society of Civil Engineers, the Association of General Contractors, Sierra Club, Water Infrastructure Network, American Rivers, and others.