Sewer, water systems need aid State supports trust fund plan

By Mal Leary, Capitol News Service
Posted Sept. 13, 2009, at 11:12 p.m.

AUGUSTA, Maine — The numbers are huge.

Maine’s sewer and water systems need more than $500 million in repairs and expansions, according to state officials, and more than half of those projects need to be addressed in the next five years.

To come up with funding for the projects, a national trust fund has been proposed to help pay for the needs across the country. The proposal has state support and the interest of Maine’s congressional delegation.

“It is a good proposal,” said Maine Environmental Protection Commissioner David Littell. “But I am reluctant to place the future of the program on the hopes that something will pass in Washington.”

He said the federal Recovery Act has provided some one-time funding for projects, $6 billion nationally and about $30 million in Maine, but said the backlog of needed projects is growing as are the costs. The state uses bonds, federal loans and grants and local sewer and water district revenues to pay for repairs and upgrades.

“This is an economic development issue,” Littell said. “For developers to move forward, they need to make sure there is the capacity to handle their projects.”

The concept of a trust fund to ensure adequate funding for projects has support in Congress, with a House measure sponsored by both Democrats and Republicans.

Second District Rep. Mike Michaud, D-Maine, is a member of the House Transportation and Infrastructure Committee that is considering the measure.

“We definitely have to look at setting up some sort of long-term trust fund to deal with this,” Michaud said. “How we fund it will be a contentious issue, I am sure of that.”

Michaud said the federal Environmental Protection Agency has done a study showing that over the next 20 years there are more than $534 billion in projects that should be funded. He said the trust fund proposal is sure to run into opposition from those who do not want to implement new taxes to pay for the projects.

“I’m not ready to say I will support new taxes, and I am not alone,” he said.

The House bill suggests a wide array of new taxes, from a tax on pharmaceuticals to taxes on a variety of household goods such as detergents, toothpaste, toilet paper and cooking oil. In all, the taxes are supposed to raise $10 billion a year for the new trust fund.

Sen. Susan Collins, R-Maine, said there is no dispute that the nation needs to do more to address its aging infrastructure. But she also said that with the nation’s deficit increasing, there would be great reluctance to add any new taxes to meet even a clear need.

“I am open to new financing means,” she said, “but I am leery of new taxes for a specified trust fund because we have seen the highway fund, which takes exactly that approach, go broke.”

Collins said the current revolving loan fund is a good approach, where money is lent at low or no interest and as it’s repaid, additional loans are made. She said the problem is the needs across the country are growing faster than the ability of the fund to meet the needs.

First District Rep. Chellie Pingree, D-Maine, said taxes are always an issue, but without taxes, infrastructure projects can’t get built. She said the taxes might be made more acceptable by adopting different rates based on a public policy goal.

“If the kind of detergent that’s doing more polluting is taxed differently than one that allows us to have cleaner water, I don’t think that’s a bad way to get us to change our cleaning habits,” Pingree said.

She said with so much of the state’s water and sewer systems a century or more old, Maine would benefit greatly from an increased level of federal aid for projects.

Sen. Olympia Snowe, R-Maine, said Congress needs to do more to help local water and sewer districts upgrade facilities. But she doubts the trust fund proposal will find the support it needs for quick passage,

“This sort of permanent approach needs to be thoroughly reviewed,” she said, “and clearly, any new taxes are going to be controversial and a difficult battle.”

Snowe said an incremental approach to the problem might be more successful, where Congress increases funding to the revolving loan fund and later considers some modest taxes to further bolster the fund.

Littell said there have been some discussions at the state level that additional resources are needed. He said those talks have included larger bond issues and some have suggested additional user fees.

http://bangordailynews.com/2009/09/13/news/sewer-water-systems-need-aid-state-supports-trust-fund-plan/ printed on September 20, 2014