The Huffington Post published an article this week about AWWA’s very own WIFIA. As a reminder, WIFIA is short for Water Infrastructure Finance and Innovation Act. It was signed into law in 2014 to help fund drinking water and wastewater projects by providing low-interest federal loans for up to 49%.
But as the law is written right now, it prohibits tax-exempt bonds from funding the remaining 51%, which takes away the cost effectiveness of using WIFIA for communities.
The struggle that WIFIA has gone through is summed right in the HuffPost article:
“Forces in Congress began worrying about how to further minimize losses to the U.S. Treasury. So, they inserted three provisions. First, they lowered the funding amount from 100% to 49%. Next, they said that tax-exempt municipal bonds couldn't be used to fund the other 51%. Finally, they said that the 49% WIFIA share couldn't be subordinated to the 51% of other money. Unfortunately, these three - otherwise well-intended - provisions crippled WIFIA.”
We need to “free WIFIA” because our country’s water and wastewater infrastructure needs will top two trillion dollars over the next 25 years. WIFIA is meant to serve as a tool to help communities manage those reinvestment costs. But with not being able to use tax-exempt bonds, that holds up the full effectiveness of WIFIA.
To understand more about WIFIA, visit AWWA’s Infrastructure Financing webpage and DrinkTap’s infrastructure webpage.