Proposed Clean Water State Revolving Fund (SRF) changes spell trouble for Maryland state and local governments.
A bipartisan Senate proposal would replace the decades-old formula used to distribute federal Clean Water State Revolving Fund dollars with a system based on current infrastructure needs, population, and poverty levels. The program provides low-interest loans and grants for sewer repairs, wastewater treatment upgrades, stormwater projects, and other water-quality improvements.
The revised formula would increase funding for many fast-growing states while reducing allocations for others, with temporary limits on annual gains and losses to ease the transition. The change is intended to better align federal investment with today’s clean water needs as communities face an estimated $630 billion in wastewater and related infrastructure costs over the next 20 years.
Under the proposed formula using 2022 data, Maryland’s share of federal Clean Water State Revolving Fund appropriations would decline from 2.46% to 1.67% after a four-year transition, a 31.8% reduction. Maryland received an average of approximately $45 million annually in federal grants from 2019 through 2023, so applying that reduction as a rough benchmark would mean about $14 million less each year to capitalize low-interest loans, grants, and other assistance for wastewater treatment, sewer, stormwater, septic, and water-quality projects. Because Maryland’s revolving fund distributed an average of $163 million annually during that period, the reduced federal contribution could also constrain the state’s ability to leverage funding and support county and municipal infrastructure needs.
