As House and Senate committees begin prioritizing funding for fiscal year 2026, NGWA joined 29 water associations in a letter urging full funding of the Clean Water and Drinking Water State Revolving Funds (SRFs) at congressionally authorized levels of $3.25 billion each.
Fully funding the SRFs at congressionally authorized levels of $3.25 billion, each, will expand access to affordable financing for infrastructure that provides safe drinking water, suitable recycled water, wastewater services and stormwater management in thousands of communities across the nation every year, including groundwater systems.
Over the next 20 years, the United States must invest more than $1 trillion in water infrastructure to protect human health.
According to recent surveys, the need for investment in drinking water, recycled water, wastewater and stormwater infrastructure over the next 20 years exceeds $1.255 trillion. Fully funding the SRFs at $6.5 billion will allow the SRFs to play a key role in closing the funding gap and help make investments in water infrastructure more affordable for communities.
The demand for affordable SRF financing has increased exponentially in recent years.
Adequate federal funding is needed to meet the growing demand for SRF low-interest loans, which has skyrocketed due to the increased cost of planning, design, construction, and financing.
- While inflation has stabilized, the cost of planning, design, and construction remains well above pre-pandemic levels, especially in small and rural communities that can least afford it.
- Higher construction costs are compounded by higher financing costs from rising interest rates on the municipal market.
- Complying with more stringent water quality standards requires new investments in sophisticated and often expensive treatment technologies.
The SRFs are fiscally responsible, effective, and efficient state-federal partnerships.
Since Congress established the SRFs, $90 billion in cumulative federal funding has generated $244 billion in financial assistance for water infrastructure projects, producing a combined return-on-investment of $3 for every $1 in federal funding. Today, decades-old congressional appropriations for the SRFs are being reused and reinvested, with more than $100 billion in loan repayments permanently revolving and financing new water infrastructure projects.
Over the last three years, these state-managed programs have executed more than 3000 loans, on average, each year. Two thirds of these projects were built in small and rural communities with fewer than 10,000 people, many of which couldn’t qualify or afford financing in the municipal or private lending markets. The cost of administering the SRFs is capped at 4 percent of annual federal funding.
Drinking water, recycled water, wastewater, and stormwater utilities face a funding cliff.
Supplemental federal funding for the SRFs in the Infrastructure Investment and Jobs Act (IIJA) ends next year. When that one-time funding ultimately dries up, many communities will lose access to a source of affordable financing to build infrastructure to meet national standards for safe and clean water, jeopardizing the health of millions of Americans.
Funding the Clean Water and Drinking Water SRFs at congressionally authorized levels of $3.25 billion, each, for fiscal year 2026 will avert this funding cliff and maintain the pipeline of projects for water infrastructure that protects human health and the environment.
Click here to read the letter and see the list of organizations supporting Clean Water and Drinking Water State Revolving Funds.