As part of the nation’s COVID-19 response, federal policymakers should consider expanding and repurposing existing federal financing programs like U.S. EPA’s Water Infrastructure Finance and Innovation Act (WIFIA) Loan Program.
In many ways, the economic consequences of the COVID-19 pandemic are just beginning for state and local governments and public-sector infrastructure agencies. They will face the direct effects of the prolonged shutdown on revenues and expenditures while being responsible for economic and social recovery in their communities. These challenging conditions will likely persist for years.
Even for those governments and agencies in good long-term financial shape, financing assistance may be critical to help manage the massive budget dislocations caused by this unprecedented crisis. Such assistance is especially effective for infrastructure agencies to keep major projects from being delayed or canceled due to unexpectedly lower revenue expectations.
The federal government’s role in the pandemic’s economic recovery is well recognized. But plans for specific federal financing programs are far from finalized. Many in Congress are calling for the $500 billion Municipal Liquidity Facility (established by the Federal Reserve in the CARES Act) to be amended to offer cost-effective loans. This concept is included in several bills recently passed or proposed in the House, but full enactment is still a distant prospect in the current political environment. And even if new sources of federal credit were established, the design and implementation of large-scale lending programs is a major task. It can’t be accomplished overnight.
Water World
by John Ryan
Nov 11th, 2020