White House FY2026 budget proposes sharp reductions to water infrastructure funding

On May 2, 2025, the White House released its Fiscal Year 2026 (FY2026) discretionary budget request, proposing a reduction in funding for the Environmental Protection Agency's (EPA) State Revolving Fund (SRF) programs. The combined allocation for the Clean Water and Drinking Water SRFs is set at $305 million, marking a $2.46 billion decrease from the $2.765 billion enacted in FY2025.

The administration's budget document indicates that this adjustment aims to return SRF funding to levels prior to the Bipartisan Infrastructure Law (BIL), encouraging states to assume greater responsibility for financing their water infrastructure needs. The proposal does not detail how the $305 million will be divided between the Clean Water and Drinking Water SRF programs.

This proposed reduction is part of a broader plan to decrease the EPA's overall discretionary budget by $4.2 billion, representing a 54.5% cut from the previous fiscal year

This proposed reduction is part of a broader plan to decrease the EPA's overall discretionary budget by $4.2 billion, representing a 54.5% cut from the previous fiscal year. The budget outlines a shift in focus towards defence spending and border security, with a 13% increase in defence funding and a nearly 65% increase for the Department of Homeland Security.

The SRF programs have historically played a crucial role in supporting water infrastructure projects across the United States, particularly in small and rural communities. According to the EPA, these programs have provided over $172 billion in funding for water quality infrastructure projects since their inception.

The proposed budget has raised concerns among water industry stakeholders and public health advocates. Critics argue that the significant cuts to SRF funding could hinder efforts to maintain and upgrade aging water infrastructure, potentially impacting water quality and public health.

The budget proposal is subject to congressional approval, and debates are expected as lawmakers consider the implications of the proposed funding changes. The final budget outcome will depend on negotiations between the White House and Congress in the coming months.