USDA cuts to rural water funds could stretch state program

By Kelda J.L. Pharris
[email protected]

Rural water and wastewater systems could feel a funding crunch if President Donald Trump’s proposed 21 percent budget cut to the U.S. Department of Agriculture is approved.

Trump wants to get rid of a program that provides grant and loan money that rural water systems can tap for infrastructure work. The estimated savings would be $500 million.

“I suspect that rural America and water systems in general will want to see the loan and grant program continue. It’s been used enough in this state that they have that desire to keep it,” said Dennis Davis, executive director for South Dakota Association of Rural Water Systems. “I suspect people who currently have access to rural development funds, a lot of them would like to see it continued.”

If the federal program is eliminated, the demand from water and wastewater systems for state revolving loan fund money would likely increase.

The federal budget now contains $2.3 billion for state revolving loan funds nationwide. Trump is proposing increasing that total by $4 million, said Jim Feeney, division director of financial and technical assistance with the South Dakota Department of Environment and Natural Resources.

His office handles the applications and disbursement of state revolving loan funds.

Could the extra revolving loan money offset the lost grant and loan program?

“The short answer is no,” Feeney said. “There’s always more demand than funds available for the subsidy grants with our revolving loan programs.

“Obviously, the USDA Rural Development is a component of the funding provided to rural water and small communities serving less than 10,000 people. We work with parallel programs,” he said, referring to the state loans.

“Speaking strictly to programs I work with, we’re basically a status quo proposal,” he said. “If this (federal) funding goes away, we may be the only game in town.”

That state money is important to systems like Aberdeen-based WEB Water, which Feeney said received $7.12 million in state revolving loan fund money in January.

WEB Water provides treated Missouri River water to many homes, businesses and towns in 14 northeast South Dakota and three southeast North Dakota counties.

Trump’s budget proposal would also trim USDA staff at the county level. Farm Service Agency officials in South Dakota referred calls to a USDA federal spokesman.

“We do not have additional information at this time,” Ed Curlett of the USDA communications office said in an email.

The McGovern-Dole International Food for Education program would also be scrapped under the Trump proposal. The program “helps support education, child development and food security in low-income, food-deficit countries around the globe,” according to its website.

When it was announced in 2009, it was lauded as a successful bipartisan effort to combat hunger. But the Trump administration does not believe it’s been effective, according to a host of accounts. There is $182 million earmarked for the program for the current fiscal year.

George McGovern, a South Dakota native, ran for president in 1972.

All of Trump’s proposed ag cuts are in discretionary spending, so they do not affect conservation or crop price support payments to farmers.

Follow @Kelda_aan on Twitter.

South Dakota revolving loan funds

• $8.5 million goes to rural water systems.

• $6.5 million goes to wastewater systems.

• WEB Water received $7.12 million from the state fund in January.