State Revolving Funds and Green Infrastructure: tools for water, public health, and climate resilience

Shaun Roberts and Lauryn Magno - EPIC Water Policy Interns

Access to affordable and reliable water is crucial for public health, which has become even more evident amid the COVID-19 pandemic. To address the need for stronger public health provisions, the U.S. government has invested millions of dollars in COVID relief funds to keep Americans’ taps running. With water accessibility now at the forefront of America’s federal priorities, how do we maintain this level of federal support in the long-term? Investing in State Revolving Funds (SRFs) presents one solution. 

SRFs are financial partnerships between the federal and state governments to finance water infrastructure projects that improve water quality, and address equity, public health, and climate resilience concerns. One such use is through the funding of green infrastructure, which can include independent or integrated management practices such as bioretention, green roofs, and permeable pavements. 

Green infrastructure has been identified to have many positive effects on communities’ health and overall climate resilience, bringing benefits like improved air quality, reduced urban heat island effect, access to green space, and enhanced social interaction and recreation, among others. For example, Combined Sewer Overflows (CSOs) have emerged as a priority waste concern as they contain untreated or partially treated human and industrial waste, toxic materials, debris and stormwater. They stem from combined sewer systems, which are systems that collect both stormwater and sewage. CSOs are becoming an increasingly large threat as natural disasters, such as extreme rain events, increase in frequency and intensity. 

SRF financing can be utilized to mitigate the threat of CSOs through natural processes while prioritizing both public health and climate resilience. Akron Waterways Renewed! is an Akron, OH, initiative to update the city’s sewer system after a 2009 Federal Consent Decree. As part of an EPA-approved Integrated Plan, Akron is modifying its long term control plan to include green infrastructure elements. The proposed green infrastructure projects are predicted to save Akron approximately $300 million. As states develop SRF backed projects, the prioritization of green infrastructure, as Akron has demonstrated, as well as vulnerable, marginalized and low-income communities, is critical in the distribution of funds. 

The selection of projects and distribution of SRFs is largely left to the state’s discretion, but top-level decisions remain under the federal government’s authority. On top of authorizing new levels of SRFs every fiscal year, the government requires a portion of a state’s annual CWSRF capitalization grant to be dedicated to green infrastructure, i.e. the Green Project Reserve (GPR). In FY 2012, though, the requirement was reduced from 20 percent to 10 percent. 

As Congress now recognizes the importance of water infrastructure investment through SRFs, it has proposed levels of funding that meet the nation’s infrastructure needs and is reexamining the value of the GPR. Congress’ authorization of this large increase in federal funds to SRFs would provide communities the opportunity to solve existing and burgeoning water challenges, including ones that were exacerbated by the pandemic.

Congress

The Senate released the “Infrastructure Investment and Jobs” bill text on August 1st. Although the $1.2 trillion, eight year bill is significantly smaller than Biden’s original vision , the President has voiced his support for the bipartisan framework since late June. The bill advanced past the Senate's procedural vote on July 28th and is expected to be voted on prior to August recess. The bill includes $55 billion over eight years for water infrastructure and largely replicates the Senate’s $35 billion “Drinking Water and Wastewater Act of 2021” (S. 914) passed in May. Specifically, it:

• reauthorizes the CWSRF and awards the program about $14.7 billion over five years, starting at $2.4 billion in FY 2022 and gradually increasing to $3.25 billion in FY 2025 and FY 2026. 

• reauthorizes the DWSRF at levels equal to the CWSRF. 

• increases the minimum percentage subsidy for disadvantaged communities to 12% from 6% in FY 2021. 

• authorizes $1.4 billion over five years for the sewer overflow and stormwater reuse municipal grant program to help invest in green infrastructure and water and energy efficiency projects. 

The House passed the “Water Quality Protection and Job Creation Act” (H.R. 1915) in early July through the INVEST in America Act 2021: 

• reauthorizes the CWSRF and proposes $40 billion distributed to the CWSRF over five years. 

• permanently codifies the GPR and increases it from 10 to 15%. 

As our nation grapples with its C- rated water infrastructure, a public health and climate crisis at our door, the strides made in Congress to increase SRF levels and the commitments to rebuild our infrastructure are promising. But we can’t stop there. All 50 states must critically evaluate how they use Congress’ proposed increased SRFs to prioritize innovative solutions, like green infrastructure, and to ensure public health in the face of climate threats. This will ensure cities like Akron, OH can guarantee clean water and public health benefits for all its residents, especially its marginalized and low-income communities that stand to gain the most from nature-based solutions.