The Challenge of Prioritizing Waste Water Management in Policymaking

The issue in policymaking, when resources and funding is available, is often not about the legitimacy of the problem that occurs when waste water is untreated. The debate arises on the soundness of subsidies for waste treatment plants.  While municipal waste treatment was progressed measurably, it is false to state that federal subsidies have been effective in creating this change. The increasing proportion of the population is served by facilities using at least a secondary treatment. Between 1968 and 1996, this proportion increased from 85.

9 million to 164.8 million and the number of people whose service comprised less than secondary treatment fell from 54.6 million to 17.2 million (Federal Register). However, research has shown that most of these federal grants have just displaced local funds that would have been allocated to POTW construction had the national program not been in existence. This is because there is only a fraction of the federal money was incremental to what would have been spent at a local level, and only a portion of the improved water quality can be linked to the program (Jondrow, Levy).

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  The federal grant program to fund POTW construction achieved something less than a dollar for dollar improvement is a critical revelation. Furthermore, it seems that the well-intended grant program had many shortcomings and inefficiency.

The most notable of these occurred because the legislation lacked incentives. A fundamental aspect of the program was the sharing of costs to be absorbed by the federal government. This was set at a 75% maximum originally. This large proportion shifted most of the spending away from local governments, and that left behind minimal incentive to decrease costs in the building of treatment facilities.

With the addition of special aid from federal and state governments, there were some municipalities only had to raise enough funds for 5% of the construction costs. Many of these POTWs are larger and more sophisticated than needed because municipalities wanted to use the POTW as a talking point to incentivize economic development. This excess capacity is a waste of economic resources and has received criticism for its poor operating performance in some POTW facilities (Callan, Thomas).   In response to these inefficiencies, several changes were made to the program. Aggregate grant awards were significantly cut and by 1985 the government’s cost share was decreased to 55%.

Tighter restrictions on grant authorizations were issued to reduce excess capacity. Some of these restrictions include the limitation of funds to service the needs of existing rather than projected levels of pollution. They also changed the funding mechanism from outright construction aid to state-administered revolving loans. These changes shifted the cost burden to local governments. This forced municipalities to become more self-sufficient in developing their sources to fund and manage their wastewater treatment systems. In doing this, the intended consequence is that municipalities would begin making more cost-effective choices. This policy could entail higher sewage fees, which may also prompt local residents to be more active in ensuring that local officials carefully consider the costs of sewage treatment Otherwise, perhaps a Tiebout emigration could occur from communities provided cost ineffective sewage treatment facilities. The CBO reported that increases in the lifetime local cost share between 50% and 60% that occurred lead to efficiency improvements from declines in lifetime unit costs. However, the POTW program also created equity imbalances. The inequity was largest for smaller, rural communities that weren’t able to take advantage of economies of scale.  The shift to this CWSRF program could have provided some alleviation of this inequity because the state managed loans are tailored through interest rates or grace periods to accommodate the lower income levels in certain communities.

A majority of these small communities are receiving these assistance agreements, however the dollar value of these grants are significantly smaller. Communities with 10,000 residents or less received 78% of the assistance agreements in 2009. But, they only received $1.2 billion of the programs total $5.2 billion. Additionally, most of these communities were awarded more than half of the funding available in this proportion through the American Recovery and Reinvestment Act (2009 Annual).   Furthermore, it was found that the grant program under the Clean Water Act did lead to a decline in water pollution and that some of the Clean Water Acts municipal wastewater treatment plants were the causation of some of this change. However, it was also discovered that the estimated effects on housing values are generally smaller than the cost of the grant program. Overall, the Clean Water Act’s goal was “to restore and maintain the chemical, physical, and biological integrity of the Nation’s waters.” The legislation was a classic example of addressing an externality. A plant that pollutes the river can harm people downstream through heavy metal contamination, nitrates, and other forms of pollutants.

Before the act, the Cuyahoga River in Cleveland would often catch fire, and there was little to no biodiversity within the waters. Despite the well intentions to address this. Despite the good intentions of the legislation, the Clean Water Act has received its fair share of criticism due to its ambiguity in solving for water pollution problems and whether or not the benefits of the plan have exceeded the costs. One analysis done on the legislation’s ability to solve for water pollution noted that over half of the nations waterways still violate state water standards. While the water quality was worse before the Clean Water Act, it is still apparent that since its conception the bill could be relatively ineffective at controlling legislation if there are other potential factors affecting pollution levels in the nation’s rivers. The first head of the EPA William Ruckelshaus did comically note “even if all of our waters are not swimmable or fishable, at least they are not flammable.” The costs of the Clean Water Act have been enormous. Since 1972, federal and industry spending has exceeded one trillion dollars in water pollution ablation. This figure is more than what has been spent on abating air pollution, and during the mid-seventies the Clean Water Act was the largest public works program in the nation. The costs were excessive because the goals of the program are ambitious. Making all U.S. waters swimmable and fishable by 1983, to prohibit discharge of toxic levels of pollutants, and to have no water pollution discharge by 1985 are the main factors to the programs high costs (Keiser, Shapiro).