Money, Money, Everywhere – Can I Get a Drink?

BY MIKE HOWE tawwa executive director

If you have been paying any attention to the news as the legislative session started, you undoubtedly have heard that Texas is projected to have $188.2 billion available in general revenue for funding the business of the state over the next two years. This is about 26% more than the state has ever had available for programs and according to State Comptroller Glenn Hegar, "The amount of projected revenues give the state a remarkable, a truly once-in-a-lifetime opportunity, for historic actions in this legislative session."

This extraordinary amount comes primarily from sales and energy taxes and the notes of caution are already being pushed forward so everyone realizes that it would be foolish to spend every dollar. However, even in the most conservative of groups, everyone is lining up to "encourage" the members of the legislature to direct dollars to a number of pressing needs.

The water community, including Texas AWWA along with a consortium of water associations and other interested groups, are working closely together to present a united front to address numerous water supply and infrastructure needs throughout the state.

The funding needs for water and wastewater infrastructure upgrades in Texas are significant. The Texas Water Development Board estimates that $53 billion will be needed for water infrastructure alone between 2020 and 2070. Funding for wastewater infrastructure is also needed on top of that, making it a huge financial burden for the state and communities.

The question is how to fund such a large investment. The traditional method of funding infrastructure upgrades is through government grants and loans. However, the federal government's funding for water and wastewater infrastructure has been decreasing in recent years, leaving states and local communities to shoulder a larger share of the financial burden. In recent years, AWWA successfully worked with Congress to secure the Water Infrastructure Finance and Innovation ACT (WIFIA) and is currently working with other groups on the national level to maintain the funding levels of the State Revolving Fund (SRF). But these funding mechanisms are never enough. And, here in Texas, we do not have dedicated funding for water and wastewater infrastructure, making it difficult for communities to secure funding for upgrades.

One solution that has been proposed is the creation of a state water infrastructure bank. This type of bank would provide low-interest loans to communities for water and wastewater infrastructure upgrades. By providing low-interest loans, the bank would make it more affordable for communities to fund upgrades, while also reducing the burden on ratepayers. That is the direction we are hoping the legislature will commit to with a portion of the billions of surplus funds available this year.

There are other funding options, including increasing the use of private financing for water and wastewater infrastructure upgrades, but this raises concerns about potential rate increases and the privatization of water and wastewater services. Or, some periodically suggest increasing the use of publicprivate partnerships (PPPs) for water and wastewater infrastructure upgrades for certain projects. The difficulty in all these other options is that they don’t address the problems of smaller systems and could