Water Infrastructure Loans Get a Budgeting Facelift: What the WIFIA Change Means for Local Projects

This legislation, the Restoring WIFIA Eligibility Act, is all about changing how certain water infrastructure loans are counted on the federal balance sheet. Specifically, it targets financial assistance provided under the Water Infrastructure Finance and Innovation Act (WIFIA). The core change is this: If a state or local government gets a WIFIA loan or guarantee, and they promise to pay it back using only non-Federal revenue—think local water fees, state taxes, or bond revenue—then that financial assistance will be treated as non-Federal money for budgeting purposes under the Federal Credit Reform Act of 1990. It’s a technical change that could have real implications for how much water infrastructure gets funded.

The Budgeting Loophole: Making Federal Money Look Local

To understand this, you need to know a little about federal budgeting. When the government gives out a loan, it has to set aside cash to cover the risk of that loan defaulting—a process called credit reform scoring. This bill essentially creates a carve-out. If a city’s water department takes out a WIFIA loan to replace aging pipes but commits to paying it back strictly with local water utility fees, the federal budget treats that loan as if it originated outside the federal government entirely. It doesn't change the fact that WIFIA is still backing the loan, but it changes how the budget office scores the risk.

What This Means for Your Water Bill and Local Projects

So why should you care about a piece of budget accounting? Because these technical rules often determine how much money is available for actual projects. WIFIA is critical for funding large-scale water projects, like upgrading wastewater treatment plants or securing new drinking water sources. By reclassifying these loans when they have a secure, non-federal repayment source, the bill potentially reduces the amount of budgetary “cost” the federal government has to assign to the WIFIA program. In the best-case scenario, this frees up budget capacity, allowing the program to support more projects without requiring a massive new federal appropriation.

For the average person, this means that the local utility—the one you pay every month—might have an easier time accessing federal financing to fix that broken water main or build that new reservoir. The bill clarifies and streamlines the process for local governments that are already financially sound and can demonstrate dedicated, non-federal revenue streams for repayment. This is important because while the federal government is providing the guarantee, the local community is explicitly shouldering the repayment burden, making the financing structure more robust from a budget perspective. It’s a classic example of how a small, technical tweak in budget law can open the door for more large-scale infrastructure investment where it’s needed most.