Picking up right where the legislature left off last year, the newly-passed House Budget again targets the Clean Water Management Trust Fund with policy changes that will likely gut the long-term effectiveness of the state’s primary capital investment resource for developing clean water infrastructure in North Carolina’s rural communities.
Created in 1996, the Clean Water Management Trust Fund  provides significant financial assistance to local governments and nonprofits to aid in strategic water-related infrastructure development and the purchase of riparian land to protect long-term water quality. In the years since inception, the Trust Fund has helped rehabilitate crumbling water/sewer lines, outdated pump stations, and low-capacity storm water systems across rural North Carolina—infrastructure critical for attracting and retaining industry and ensuring vital water-related tourism resources remain pristine and unpolluted.
Overturning state statute and 15 years of precedent, last year’s budget dramatically reduced the biennial appropriation to the Clean Water Management Trust Fund, cutting the program’s funding from the $100 million to $11.25 million for both FY2011-12 and FY2012-13. This represents an 89% cut from the levels previously required by statute and annually appropriated to the program every year since FY1999-2000.
As if cuts of this magnitude were not enough, the House budget took the additional step of converting the clean water fund’s appropriation from a recurring obligation—one that is guaranteed a certain amount of funding in every biennial budget— to a non-recurring obligation, forcing the program to fight for one-time funding in every legislative session. Over the long-run, this will likely reduce the clean water fund’s appropriation—and capital investments in rural water/sewer systems across the state—even further.
Ultimately, along with losing 89% of its appropriation, forcing the Trust Fund to rely on one-time funds to sustain its grant-making will cripple the program’s capacity to assist rural communities in developing sufficient clean water infrastructure to support both tourism and economic development. Additionally, given the resulting chronic uncertainty in the fund’s available resources from year to year, local communities will have a much more difficult time planning for their infrastructure development needs—further hampering their ability to attract and retain the industries critical for their long-term recovery.