The White House recently put forth its fiscal year 2026 budget proposal, which includes a significant $2.46 billion cut to the Drinking Water and Clean Water State Revolving Funds compared to 2025 levels.
The reduction is part of a larger proposed decrease in the U.S. Environmental Protection Agency's overall budget. According to a May 2 letter from President Donald Trump to Appropriations Committee Chair Susan Collins, the proposed funding reduction aims to shift more financial responsibility for water infrastructure projects to individual states.
"Contrary to that design, in practice, the program has been heavily earmarked by the Congress for projects that are ultimately not repaid into the program and bypass states’ interest and planning," reads the letter. "In addition, the SRFs are largely duplicative of the EPA’s Water Infrastructure Finance and Innovation Act program and the Department of Agriculture’s Water and Wastewater Loan and Grant program, and they received a massive investment in the Infrastructure Investment and Jobs Act."
Associations respond
The National Association of Clean Water Agencies released a press statement the same day headlined Proposed EPA Budget Puts Americans' Health and Clean Water at Risk. NACWA argues that the 55% reduction in the EPA's annual spending is only made possible by "kneecapping the primary water infrastructure financing programs on which local utilities rely."
"The Clean Water and Drinking Water State Revolving Funds help thousands of clean water utilities across the country complete projects that are integral to protecting public health and the environment," reads the NACWA statement. "Yet the budget proposed today would cut the SRF’s annual funding by nearly 90%. NACWA strongly opposes these cuts. Now is the time to intensify investment in our country’s critical infrastructure, job creation and economic growth — all of which depend on water. NACWA urges the White House to reconsider these proposed cuts and urges Congress to ensure that funding for these critical programs is not reduced."
Meanwhile, the National Utility Contractors Association argues that without SRF funds, other state and federal programs such as WIFIA will not have the resources to repair the nation's deficient water infrastructure systems.
"The Drinking Water SRF and Clean Water SRFs are used in conjunction with WIFIA and USDA's water and wastewater loan and grant programs to build local water and sewer systems, and have done so for the last 40 years. None of these programs are adequately funded today to meet the projected $1.2 trillion needed to maintain and replace these aging systems over the next 20 years. Cutting these federal programs does not fix anyone’s water or sewer system. States simply will not be able to fill the funding gap."
The Association of Metropolitan Water Agencies also released a statement, and emphasized that while the proposed cuts are concerning, it's worth noting that President Trump asked Congress to cut EPA spending by an average of about 30% in each of the four years of his first term.
"Congress rejected each of those requests and ended up providing the agency with a modest funding increase each year," reads the statement. "While there is no guarantee the process will play out the same way again this year, some lawmakers on Capitol Hill were already blasting the proposed cuts within hours of their release.
"The proposal to slash EPA and SRF spending will surely attract strong opposition from a range of stakeholders, including AMWA. Last week the association submitted a statement for the record of a Senate committee hearing expressing strong support for SRF funding, and AMWA has also urged its members to utilize the Legislative Action Center to contact elected officials in support of strong water infrastructure investments. Those efforts will redouble in the coming months as the FY26 budget debate plays out."
