Federal Budget Likely to Provide Reduced Funding for SRFs

Work is underway in Washington to develop a budget for the upcoming 2012 fiscal year (FY2012) as well as a budget for the remainder of FY2011.  The government is currently operating under a Continuing Resolution (CR) that provides federal funding at levels appropriated for FY2010.  The current CR expires on March 4th and Congress is working to develop a budget for March 5 through the end of FY2011 on September 30 of this year.  There is an effort underway to achieve a balance between reducing the nation’s spending while not hampering the economic recovery.  Although there is much disagreement as to the best way to achieve these two objectives, it is evident that there will be decreased support for the State Revolving Funds (SRFs) in both the FY2011 and FY2012 budget proposals.  Despite the proposed cuts, these two programs received major funding increases in recent years, through both the appropriations process and economic stimulus, which provided $6 billion to these programs.  These programs have a degree of bi-partisan support.

The graphic below illustrates the potential impact on SRFs based on preliminary budget proposals.  It should be noted that much negotiation has yet to occur on the FY2011 and FY2012 proposals, but that is likely that the end result will be greatly diminished funding for the SRFs, which will significantly affect the water and wastewater industries.



While a small percentage of the overall budget (2.4%), the Environmental Protection Agency’s (EPA’s) proposed FY2012 budget is reduced by 11 percent from the FY2010 appropriated level/FY2011 assumed level.  In particular, the reduction to the SRFs within the EPA budget is in contrast to recent years in which the President supported increases to the SRFs.

American Water Works Association, 2011.
Congressional Quarterly, 2/15/2011.