FAQ on the Water Bill

Water Protection and Reinvestment Act

Frequently Asked Questions

Why is local water infrastructure a federal responsibility?

Local water infrastructure is a local responsibility as are roads and school. But like roads and schools, the Federal government provides financial support to localities. For years the federal government has provided funding to State Revolving Loan Funds, money that the State then lends out to local water utilities. This funding is a small fraction of the money spent on water infrastructure. Water utilities receive about $60 billion dollars a year from ratepayers while the federal government provides about $2 billion a year in funding. The trust fund created by the Water Protection and Reinvestment Act would provide only an additional $10 billion a year.

Why can’t ratepayers just pay more?

Through water and sewer bills, local citizens and private businesses already pay 90 percent of the total cost to build, operate, and maintain their water and wastewater systems. Increased local fees and taxes undoubtedly will help pay for a fair share of future system requirements, but local fees alone cannot solve all funding problems. Our nation’s water infrastructure needs have grown while federal funding for clean water has declined. While the needs are estimated to be over $25 billion a year, appropriations for water infrastructure have averaged just over $2.3 billion a year since 2000, far short of the money needed to complete necessary maintenance. This forces more and more costs on local governments and ratepayers, whose rates have grown at twice the rate of inflation in recent years. Paying the full $25 billion a year that is needed with utility rate increases would result in a doubling of rates, on average, across the nation, placing a heavy burden on the already besieged American economy. In some communities, especially small, rural, low-income, or older shrinking urban communities, economic hardships would be severe. In some communities, costs would run as high as $10,000 a household. We need new sources of revenue to meet our communities’ water infrastructure and environmental restoration needs. Similar dedicated funding is available for America’s transportation systems. It’s time to establish a trust fund to finance water infrastructure.

Who would pay and why?

The fees are designed to be collected at the manufacturer level, so any increased costs to consumers will be minimal. These revenue sources were analyzed in a recent Government Accountability Office report and are expected to raise at least $10 billion a year. The vast majority of which will not come from the average American.

• 4 cent per container fee on water-based beverages: These products rely on drinking water as their major input and result in both increased flows and increased waste in our waters.

• 3% fee on items disposed of in wastewater, such as toothpaste, cosmetics, toilet paper and cooking oil: These products wind up in the water stream and require clean up by sewage treatment plants.

• 0.5% fee on pharmaceutical products: Pharmaceutical residues found in our nation’s water bodies are an increasing concern for clean and drinking water utilities. A small fee on the industry will support efforts to prevent pharmaceuticals from entering water systems and research into remediation.

• 0.15% fee corporate profits over $4 million. All corporations use drinking and wastewater infrastructure and depend on it functioning to conduct their business. A similar tax was used to fund the Superfund program until it expired in 1995.

How will we be able to afford these new fees?

Overall the Trust Fund will raise approximately $10 billion a year, which is about $33 a year for each American. For most, this will be much less than the increases in water utility rates they would face if the Trust Fund were not in place. Because the fees are set at a low level, they will have a only a tiny impact on the cost of products. This is especially true when it comes to the fees on consumer goods. They are based on a percentage of the price that the manufacturer sells the product for, which is much lower, sometimes about half, the retail price. This means that the impact on retail prices will be much less than the amount of the fee. The corporate fee in the bill is equal to about the price of a small pizza on every $10,000 of corporate profits over $4 million a year. The first $4 million in profits are not counted towards the fee to ensure that small and many medium size businesses don’t have to pay the fee.

Will more money alone fix the problem?

While there is a clear need to invest more money in water infrastructure, money alone will not solve the water infrastructure problem. Water utilities need to invest in nonstructural solutions, reduce energy costs and engage in long term asset planning. Many are doing just that and the Trust Fund is designed to support those utilities and encourage others to follow their lead. In addition, $500 million dollars of the Trust Fund will fund the research, development and deployment of new technologies to improve service and reduce long term costs.

When I turn on the faucet water comes out; isn’t the concern about water infrastructure over blown?

The American Society of Civil Engineers gives water and wastewater systems a D-, the lowest grade of any infrastructure category. According to EPA, approximately 240,000 water main breaks occur each year, resulting in disruptions in service and threats to public health across the country. In addition, while water supplies in many parts of the country, but particularly in the west, are under strain to meet rising water demand, the current system wastes huge amounts of water. EPA estimates that over 6 billion gallons of water a day are lost to leaking pipes. That is enough water to fill over 9,000 Olympic sized pools. Lined up end to end, those pools would reach from one end of Pennsylvania to the other. In less than 10 days the United States loses enough water to fill enough Olympic pools to allow you to swim across country from the Atlantic to the Pacific Oceans. Not only does this waste water, it also wastes energy. Water infrastructure uses 4% of the electricity in the country and is the largest energy cost for local governments

Does the water infrastructure crisis have an impact on public health?

Yes it does. According to estimates from The Center for Disease Control, there are over 1.3 million cases of waterborne disease each year, many due to poor infrastructure. In 2000 alone, there were an estimated 23,000 to 75,000 sanitary sewer overflows in the U.S., discharging 3-10 billion gallons of untreated wastewater into local waterways. According to the EPA, an estimated 1.8 million to 3.5 million people get sick from recreational contact with sewage from sanitary sewage overflows every year. A separate study estimated that up to 1.5 million gastrointestinal illnesses are caused each year by swimming in contaminated waters at various beaches in California. The EPA reports also show that 8.2 percent of the community water systems in the United States that serve populations of less than 10,000 were in violation of health and safety standards for drinking water quality in, affecting more than 4 million people.

Will this Act increase my water rates?

No, on the contrary, the Act will work to reduce increases in future water rates.

Why did Congressman Blumenauer write the Water Protection and Reinvestment Act?

As Congressman Earl Blumenauer said, “We know things are critical when, based on current funding levels, it would take Oregon more than 62 years to meet our current wastewater needs. Establishing a steady funding source to rebuild and renew America’s outdated water infrastructure is a concrete step that puts us on the path to a healthier, more secure future. As we look for ways to jumpstart our economy, the Water Protection and Reinvestment Act will create hundreds of thousands of jobs while protecting the health of people and the environment. After many years of work, and numerous conversations with a multitude of stakeholders, I am proud to unveil this vital piece of legislation.”

How is this money spent? Does it create a lot of new government programs?

No, over 90% of the funds will be spent through existing programs, while 80% will be distributed from the EPA to States under existing formulas through the Clean Water and Safe Drinking Water State Revolving Loan Funds. Money will be distributed from the States to local water utilities in the form of loans and grants.