WATER

Why Arizona Needs Federal Funding for Water Infrastructure
Fact Sheet • April 2009

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ur nation’s water infrastructure and economy are bound together. Aiding the former will help the latter. Unfortunately, these days, both are treading troubled waters.
In communities in Arizona and across the country, drinking water and sewerage systems are straining under the weight of decades of federal government underinvestment. In recent years, the State Revolving Funds were financed at some of the lowest levels in history. For fiscal year 2008, Arizona received only $28 million, a mere 2.6 percent of the $1.1 billion that the state’s water and sewer systems need.1 As the troubles with our water infrastructure mount, the country’s economy slides deeper into recession. Arizona’s January 2009 unemployment rate reached 7.0 percent, or about 220,700 people, up from 4.4 percent a year earlier. One in 14 people in the labor force are now unemployed.2 Investing now in water and sewer systems to generate solid economic growth can lead the state out of the recession. Every federal dollar invested in infrastructure yields a $1.59 return to our states.3 The National Utility Contractors Association estimates that for every $1 billion spent on water infrastructure, nearly 27,000 jobs are created.4 The economic stimulus legislation passed by Congress in February 2009 provides more money to water infrastructure than the country has seen in recent years, but this one-time allotment cannot cure the problems plaguing many communities. In fact, the bill provides water and sewer systems with less than one-third of what the Environmental Protection Agency estimates we should spend each year just to maintain them. Arizona’s Water Infrastructure Funding Gap: Arizona’s water needs outpace its current ability to fund projects by a large margin. For the Drinking Water State Revolving Fund (SRF) program, the state’s most recent Intended Use Plan lists 187 projects at a total cost of $572 million.5 In 2008, the state

received only $23.1 million in federal funding6 — enough to finance 4 percent of its needs. For the Clean Water State Revolving Fund program, which goes toward wastewater infrastructure, the state’s most recent Intended Use Plan lists 105 projects at a total cost of $494 million.7 In 2008, the state received $4.5 million in federal funding8 — enough to finance less than 1 percent of its needs. Federal contributions to Arizona’s wastewater funding efforts have decreased by 67.2 percent since the Clean Water SRF was fully implemented in fiscal 1991 and 79.3 percent when adjusted for inflation.9

Job Creation: Fully addressing Arizona’s currently listed water needs of $1.1 billion would spur 28,432 employment opportunities, according to National Utility Contractors Association estimates for job creation from water infrastructure investments. That could put back to work one out of every eight unemployed people in the state. Water Quality: According to EPA’s 2004 National Water Quality Inventory assessments, 36 percent of river miles and 14 percent of the state’s lake waters are impaired, and all of its lakes are impaired for coldwater fisheries.10 Legislative Solutions: A comprehensive, long-term solution is a dedicated source of public funding for water infrastructure. This would help communities in Arizona and across America keep their water clean, safe and affordable. It would unburden overtaxed state and municipal governments of the cost of water infrastructure repairs. Such an investment also would create employment opportunities and give our economy a much-needed boost. Two legislative solutions exist. Clean Water Trust Fund: A federal water infrastructure trust fund bill will be introduced during the current legislative session. As with the trust fund for highways and airports, we should have a Clean Water Trust Fund to provide municipalities with the funding they need to keep our water safe and clean for future generations. The trust fund should distribute money to publicly owned water and wastewater systems. It also should ensure that funds be made available for research and implementation of green infrastructure and conservation practices. National Infrastructure Bank: Related to the trust fund is a proposed national infrastructure bank to raise and distribute the money necessary to upgrade drinking water and wastewater systems,

highways and other underpinnings of our nation’s prosperity. Policy-makers should strictly limit private sector involvement in water infrastructure to financing only. The public should maintain ownership and control of public water and sewer utilities because it does a far better job of management and operation. Endnotes
1 U.S. Environmental Protection Agency, Office of Water. “Tentative distribution of Drinking Water State Revolving Fund appropriation for fiscal year 2008.” May 19, 2008; U.S. Environmental Protection Agency, Office of Water. “FY 2008 Clean Water State Revolving Fund Title VI Allotments.” January 28, 2008; Arizona Water Infrastructure Finance Authority. “Supplemental 2009 ARRA Intended Use Plan Arizona Drinking Water State Revolving Fund.” 2009 at 14 – 25; Arizona Water Infrastructure Finance Authority. “Supplemental 2009 ARRA Intended Use Plan Arizona Clean Water State Revolving Fund.” 2009 at 14 – 21. United States Department of Labor, Bureau of Labor Statistics. [Press Release]. “Regional and state employment and unemployment: January 2009.” March 11, 2009. Schwartz, Bernard L. and Schwenninger, Sherle R. “A Public Infrastructure–-Led Economic Recovery Program.” December 4, 2008; Zandi, Mark. Chief economist and co-founder, Moody’s Economy.com. Testimony on Economic Stimulus For Small Business: A Look Back and Assessing Need For Additional Relief. U.S. House Committee on Small Business. July 24, 2008. National Utility Contractors Association. [Press Release]. “New CWC Report Demonstrates Immediate Economic Impact of Water/Wastewater Infrastructure Investment?” January 28, 2009. Arizona Water Infrastructure Finance Authority. “Supplemental 2009 ARRA Intended Use Plan Arizona Drinking Water State Revolving Fund.” 2009 at 14 – 25. U.S. Environmental Protection Agency, May 19, 2008. Arizona Water Infrastructure Finance Authority. “Supplemental 2009 ARRA Intended Use Plan Arizona Clean Water State Revolving Fund.” 2009 at 14 – 21. U.S. Environmental Protection Agency, January 28, 2008. Ibid; U.S. Environmental Protection Agency, Office of Water. “Clean Water State Revolving Fund Allotments.” April 4, 2007; Sahr, Robert C. “Inflation conversion factors for years 1774 to estimated 2019.” Oregon State University, Political Science Department. January 16, 2009. , U.S. Environmental Protection Agency, Office of Water. National Assessment Database. Available at www.epa.gov/waters/305b/, accessed February 6, 2009.

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