A short version of the June 30 white paper just published in Water Finance & Management, a leading water sector magazine.

This article was scheduled before the recent moves by the House Appropriations Committee to effectively defund the program in 2021. I don’t know (at all) any of the politics behind this move, but on the surface it certainly is surprising. The WIFIA Program works well, doesn’t cost much, is totally low-risk and accomplishes completely non-partisan stuff (voting against water infrastructure? Really?). And defunding it in the middle of a economic crisis that’s expected to hit state & local infrastructure agencies especially hard? I just don’t get it.

Yes — there is a public-facing explanation, apparently connected to the EPA being late in developing application criteria to score federal involvement in the projects WIFIA plans to lend to. That’s an important budgetary metric (non-federal projects get highly-leveraged FCRA numbers while federal projects are fully cash-costed upfront) and should always be accurately assessed. But as the Program’s selected application list clearly shows, most if not all its projects are local systems relying on local funding. More fundamentally, it’s a budgetary metric — WIFIA was not caught making loans to another Solyndra or to cut down rain forests or something else that might justify draconian action. Isn’t there a more effective way to enforce an internal accounting matter than to punish state & local water agencies? Bureaucratic fights can (and often should) be extreme, but aren’t politicians supposed to look after the interests of folks in the real world? Especially now?

I’m sure the reality of this funding issue is complex and multifaceted — way above my pay grade, especially the political aspects. But even from my narrow technical perspective I can add some context, which is perhaps why the WF&M article about WIFIA’s success is timely. And I’ll add some blunter comments:

• The WIFIA Loan Program is fundamentally working very well — and that’s not exactly easy to do for federal loan programs. If there’s an issue, fix it — don’t casually derail a rare success.
• Keep the longer term economic consequences of Covid-19 for state & local infrastructure agencies squarely in the forefront of the real-world decisions here — future planning is critical for recovery, 2021 in particular. WIFIA is a useful tool — don’t throw it out of the toolbox just when it’s needed most.
• Most fundamentally — infrastructure loan programs only really work when they are perceived by borrowers as a reliable and stable source of capital. If you wreck that perception, you take away a lot of a program’s value, regardless of future funding levels. Unless that’s the intent, there are plenty of other federal programs oriented to a robust cash-and-carry mentality, to play short-term games with.