New WEF Study on Infrastructure Spending Is the Focus of Senate Hearing

Washington, DC, April 7, 2016 — WEF was invited to testify at a Senate Environment and Public Works (EPW) Committee hearing entitled "The Federal Role in Keeping Water and Wastewater Infrastructure Affordable" today in the U.S. Senate.  The goal of this hearing was to examine the federal role in water and wastewater infrastructure.  A primary purpose of the hearing was to receive the results of an analysis that WEF and the WateReuse Association conducted at the request of the Senate EPW Committee.  The analysis shows the full economic benefits to the economy, job creation and federal tax revenues from federal funding for the Clean Water and Drinking Water State Revolving Fund (SRF) programs.

Rudolph Chow, P.E., Director of the Department of Public Works in Baltimore, represented WEF, the City of Baltimore and the WateReuse Association.  Mr. Chow is a proponent of above-ground and underground infrastructure renewal and has spent his career in the water industry developing and implementing new and innovative programs. 

Mr. Chow’s testimony focused on three significant issues affecting water and wastewater infrastructure:  affordability, federal funding of infrastructure, and economic benefits of SRF spending.  He focused on the results of the economic analysis which shows the impact of SRF spending in four sample states, including taxes returned to the federal government, jobs created and other benefits to the state and national economies.
Mr. Chow explained how the results of this analysis show that SRF spending generates Federal tax revenues. Specifically:

• Total (state and federal) annual SRF spending in these 4 states has averaged $1.46 billion. This generates $234 million of Federal tax revenues. Therefore, every million of SRF spending is estimated to generate $160,000 in Federal taxes from those states. This does not include tax revenues generated by indirect spending by firms in other states (other than CA, OH, MD and OK).  
• When compared only to the federal portion of SRF spending, which accounts for 23% of total spending, every $1 million of federal spending generates $695,000 in Federal taxes from those states.

However, not only does SRF spending generate Federal revenues, it generates output in the state economies, as well.

• Every million dollars of SRF spending results in $2.25 million dollars in output for the states’ economies, on average.  
• On average, 14 jobs are generated in these four states for each million dollars in SRF spending.  Plus, additional jobs are likely created by indirect spending in other states.
• SRF spending generates high paying jobs - each job is estimated to bring about $60,000 in labor income.

Complete results of this analysis will be added to the Committee Report and available for review within the next several weeks.

For more information, please contact WEF Legislative Director, Steve Dye at sdye@wef.org, or WateReuse’s Legislative Director, Ian Wolf, at iwolf@wateruse.org.