Issue Brief: State Revolving Loan FundsUpdated May 2003
Background
State revolving loan funds (SRFs) are loan programs that are capitalized by federal grants, state appropriations and dedicated revenues. States use the funds to provide a range of financial assistance to local governments, including loans, grants and credit enhancement. The drinking water and wastewater state revolving loan fund (SRF) programs provide low-interest loans to local governments and operators of sewer and water facilities. The program has become a major source of water infrastructure financing and is often leveraged with bonds.
The Government Finance Officers Association (GFOA) supports the establishment and use of state revolving loan fund programs because they are flexible financing tools that assist local governments in paying for public capital facilities and are adaptable to varying state and local government needs. Additionally, SRFs complement other federal financial infrastructure assistance programs.
Legislative Outlook
President Bush’s fiscal year 2004 budget would continue funding both the Clean Water and Drinking Water SRF programs with annual appropriations to each of $850 million through 2011 and 2018, respectively. The administration estimates that for the Clean Water SRF, this extended federal capitalization will provide an additional $21 billion in loans over the next 20 years, enough to fund over 15,000 additional projects according to Office of Management and Budget (OMB) estimates. For the Drinking Water SRF, it will cover the projected compliance costs for federally mandated drinking water regulations. By these estimates, the long-term annual revolving levels for each fund will increase by more than $500 million over current levels—to $2.8 billion for the Clean Water SRF and to $1.2 billion for the Drinking Water SRF. H.R. 20 (Rep. Kelly, R-NY), HR 1560 (Rep. Duncan, R-TN) and S. 170 (Sen. Voinovich, R-Ohio) have been introduced in the 108th congress and would authorize appropriations for Waste and Water SRFs.
GFOA has sent letters to members of Congress and the Bush Administration advocating an increase in federal funding for the Clean Water and Safe Drinking Water State Revolving Funds in the forthcoming fiscal year 2004 budget.
Related GFOA Public Policy Statements
Additional Resources GFOA • Federal Liaison Center • (202) 393-8020 • (202) 393-0780 FAX • Email
|
