Leveraging Data to Drive Equitable Water Policy in Texas: Insights from Prioritization Tool Inform Texas SFY 2025 DWSRF IUP Comments
On September 12, 2024, the Texas Water Development Board (TWDB) will consider approving the State Fiscal Year (SFY) 2025 Clean Water State Revolving Fund (CWSRF) Intended Use Plan (IUP) covering general activities, and the SFY 2025 Drinking Water State Revolving Fund (DWSRF) Intended Use Plan (IUP) covering Lead Service Line Replacement (LSLR) activities.
While we await the release of the draft Emerging Contaminants program DWSRF and CWSRF IUPs, last month the Environmental Policy Innovation Center (EPIC) submitted four sets of comments on the Texas’ SRF programs. During this public comment period, EPIC provided comments on the SFY 2025 CWSRF General Activities IUP, SFY 2025 DWSRF General Activities IUP, and the SFY 2025 DWSRF LSLR Program IUP, as well as on how our Texas Community Water System Prioritization Tool could be used to help drive DWSRF policy recommendations.
Access to safe, affordable drinking water is a critical yet unmet promise in many parts of the United States, and Texas is no exception. With a report card grade of “C-” for drinking water from the American Society of Civil Engineers, Texas faces significant challenges, including aging infrastructure, rapid population growth, and climate change impacts. Recent assessments estimate that $61.5 billion is needed over the next 20 years to address these issues. In response, Texas will receive $2.9 billion in additional supplemental State Revolving Funds over five years through the Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Law (BIL), for critical water infrastructure projects.
However, we want to ensure the policies that impact how these funds are spent ensure more equitable outcomes. One of the key hurdles for equitable water infrastructure investment is the lack of comprehensive, accessible data on where funding is needed. To bridge this gap, EPIC developed the Texas Community Water System Prioritization Tool. This innovative tool consolidates data affecting water users, making it accessible along service area boundaries, and is available to decision-makers and communities striving for safe and affordable drinking water. To do this, our prioritization tool harmonizes 50 variables from 11 datasets across six organizations, including the U.S. Environmental Protection Agency (EPA), Texas Commission on Environmental Quality (TCEQ), U.S. Census, and others.
In order to fill in the gap and provide data-driven policy recommendations that support more equitable practices, we utilized this tool in the public comments we submitted to the TWDB on the DWSRF SFY 2025 General Activities and Lead Service Line Replacement program IUPs. These policy recommendations include:
1. Increase Principal Forgiveness for Very Disadvantaged Communities Under the DWSRF General Activities IUP
The draft DWSRF IUP for SFY 2025 allocates $1 million in principal forgiveness for systems classified as Very Disadvantaged, defined by a service area median household income (AMHI) below 50% of the state average ($36,517.50). However, this represents only 7% of the total amount of principal forgiveness Texas will allocate during this funding cycle under the base funding, with an additional 10% of Texas’s base funds ($3,606,930) available to be allocated as additional principal forgiveness for projects, but instead planned for loan funding. Our tool identified 181 utilities across Texas qualifying as Very Disadvantaged, many of which we found face disproportionately high water bills relative to their income. In order to help alleviate this burden and to help these systems receive funding, we recommended increasing the percentage of principal forgiveness allocated to these Very Disadvantaged communities under the base funding from 7% to 17% under the DWSRF General Activities program.
2. Enhance Support for Very Small, Very Disadvantaged Systems Under the DWSRF General Activities IUP
Our analysis revealed that smaller Very Disadvantaged systems are less likely to secure funding. While Very Small systems make up nearly 67% of the Very Disadvantaged systems analyzed, they account for only 36.8% of the Very Disadvantaged systems that received DWSRF funding from 2009-2020. To address this, we proposed increased outreach, technical assistance, and planning grants for these systems, along with additional prioritization points to improve their chances of receiving funding.
Figure 1: Comparing Very Disadvantaged systems that received DWSRF funding from 2009 - 2020 stratified by system
3. Provide a More Targeted Disadvantaged Communities Definition Under the DWSRF LSLR Program
Under the draft DWSRF LSLR IUP for SFY 2025, an entity is considered a Disadvantaged Community (DAC) if it has lead service lines and if 51% or more of the project beneficiary area has an AMHI that does not exceed 150% of the state’s AMHI level. Our tool found that 3,880 out of 4,616 water systems meet this broad AMHI criteria, but 41.2% of these systems have 0% of their service area considered disadvantaged under the Justice40 framework. See the image below showing in blue the areas that have high AMHI but have low percentage rates of the service area considered disadvantaged under Justice40 by the Climate and Economic Justice Screening Tool (CEJST).
Image 1: Bivariate representation of the communities eligible for DAC funding under DWSRF LSLR program and the White House’s Council on Environmental Quality’s Disadvantaged status
The broad definition proposed by the TWDB therefore may dilute the chances of truly disadvantaged communities receiving funds, if more resourced areas are also eligible for this funding as DACs. To better target funds, we recommended reserving at least 50% of LSLR program funds for communities with an AMHI at or below 75% of the state average. This approach would make 1,022 water systems eligible for more targeted funding. We also suggested prioritizing principal forgiveness based on the severity of disadvantage, offering up to 100% forgiveness for the most disadvantaged areas.
These recommendations, supported by our data prioritization tool, aim to guide the TWDB in making informed, equitable decisions for water infrastructure investment in Texas. Our policy analysis demonstrates how targeted funding and enhanced support can help address disparities, ensuring all Texans have access to safe, affordable drinking water. By leveraging comprehensive data, we can help prioritize investments where they are needed most, fostering a more equitable and sustainable water future for Texas.
Have any questions about these comments or our tool? Reach out to Danielle at DGoshen@PolicyInnovation.org.