Revolving No More: How Earmarks Are Draining America’s Water Funds
By Janet Pritchard, Ekta Patel, and Denise Schmidt
Congressional earmarks taken from federal State Revolving Fund (SRF) appropriations fundamentally undermine water infrastructure funding, harming the majority of states. EPIC’s report shows that earmarks create both immediate and lasting financial losses for states.
Through clear data and policy analysis, this report highlights actionable recommendations for how Congress could reduce this harm, with one recommendation for states:
Stop earmarking SRFs. Do not earmark these loan programs.
Fund earmarks through separate appropriations. This practice would preserve SRF integrity while allowing targeted investments.
Use loans, not grants, for earmarked projects. There is no structural reason earmarks must be issued as grants.
Deduct earmarks from the receiving state’s allotment. These deductions will help prevent cross-state harm.
Require ongoing impact assessments. Regular assessments should show how earmarks impact long-term SRF capacity.
Increase visibility of SRF-supported projects. State agencies should better coordinate the announcement of SRF awards with Congressional delegations to share deserved credit for supporting projects.
The SRFs are one of America’s best ideas in infrastructure finance. However, you cannot divert funds from a revolving loan program to grants without weakening its ability to revolve. SRF earmarks will result in an estimated net loss of $19.4 billion—enough to finance approximately 5,700 projects.
For more information, please see: policyinnovation.org/state-revolving-fund-earmarks
