EPA’s plan to slash funding for state environmental and water infrastructure programs in its fiscal year 2026 budget is expected to significantly undercut states’ abilities to finance upgrades to drinking water systems to meet upcoming PFAS requirements and may undermine state efforts to regulate PFAS on their own, utility and other sources say.
“We knew the Trump administration would gut the EPA staff and funding but hoped that states would take the lead on [per- and polyfluoroalkyl substances (PFAS)] in EPA’s absence,” Betsy Southerland, a former EPA official now with the Environmental Protection Network of EPA alumni, tells Inside PFAS Policy.
Southerland points to EPA’s proposed severe budget cuts to state programs, noting the proposal would decimate state environmental programs by zeroing out categorical grants and slashing spending for state revolving funds (SRFs) by 90 percent. “All of the states that have delegated authority from EPA to run air, water, and waste programs depend on the categorical grants to fund those programs,” she says.
“Zeroing out those funds guts the states’ ability to permit and enforce regulations for PFAS and all pollutants,” she says. Cutting SRFs prevents treatment upgrades to drinking water and wastewater plants to lower PFAS, she says.
“This will ensure that no states will take on unregulated new pollutants like PFAS when they are losing all their funds for already regulated pollutants,” she adds.
As proposed, the FY26 request would cut the agency’s total budget by about 54 percent, including by eliminating most categorical grants to state environmental agencies, valued at about $1 billion, along with billions of dollars in water infrastructure loans.
According to EPA’s May 30 “budget in brief” document, the largest grant eliminations include the State & Local Air Quality Management grants worth $236 million, Pollution Control Section 106 grants at $225 million and Public Water System Supervision grants at $116 million.
On the Clean Water State Revolving Fund (CWSRF) and Drinking Water State Revolving Fund (DWSRF) programs, the document says, “There has been significant historical federal funding, exceeding $243.9 billion, invested in the [SRFs] and EPA is returning the responsibility of infrastructure funding to the states to leverage the strongest return on investment towards these projects per taxpayer’s dollar, while retaining funding to allow for an offramp as states prepare during this transition period.”
The proposed budget would cut the CWSRF by $1.5 billion, from $1.64 billion, the DWSRF by $976 million from $1.13 billion, and Water Infrastructure Finance & Innovation Act (WIFIA) funding by $64 million from $72 million.
States have already warned they may have to return delegated programs to EPA if the proposed cuts are enacted.
‘Significant Disconnect’
But one water utility source says such cuts will gut states’ abilities to address PFAS. “There is a significant disconnect between the budget’s promise to improve Americans’ quality of life by addressing PFAS in water, and its proposal to cut EPA water infrastructure funding programs by 90%,” the source says in an email response to questions.
The source points out that the SRF programs and the WIFIA program “are vital tools” in aiding water systems to affordably finance essential water infrastructure projects and upgrades, including those needed to comply with EPA’s PFAS drinking water standards.
Under the Biden-era drinking water rule, drinking water utilities face a 2029 deadline to meet strict drinking water limits for six PFAS, although the Trump EPA plans to rescind and reconsider standards regulating four of the PFAS while providing an additional two years -- until 2031 -- to come into compliance with limits for the two remaining PFAS -- perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS).
“Slashing funding for these programs will leave communities with fewer options to finance the infrastructure projects necessary to address PFAS -- the nationwide costs of which will run into the billions of dollars,” the water utility source says. As a result, higher infrastructure costs would ultimately be passed on to ratepayers, exacerbating the existing water affordability challenge and diverting resources away from other needed investments such as lead service line replacements, the source adds.
“If these cuts are included in the final budget they will mean significantly reduced funds for utilities to address all manner of water quality challenges, including PFAS,” a second water utility source says. The cuts “are especially harmful in the context of the end of the Bipartisan Infrastructure Law funding,” which will occur next year.
The source adds that “states and local governments simply don’t have the funding on their own to make up the difference.”
But a third water utility source says that while the cuts to the SRFs and WIFIA program “are not helpful for water utilities, . . . we are moderately hopeful that Congress will restore most of the funding.”
PFAS are noted twice in EPA’s budget in brief document. Under the “Clean and Safe Land” section, it says that in FY26, “EPA’s land cleanup programs will utilize funding strategically,” with the agency fully transitioning its Superfund remedial program to Superfund taxes. The Superfund work will include initiating new remedial work at National Priorities List sites to address contaminants including PFAS and lead.
Method 1633
In addition, the “Clean Water and Safe Water” section says that in FY26, “EPA will focus on actions that improve quality of life for Americans such as addressing 40 different PFAS compounds in surface water, groundwater, and wastewater through cutting-edge methods . . .”
Sources believe this refers to EPA’s Method 1633, which tests for 40 PFAS compounds in wastewater, surface water, groundwater, soil, biosolids, sediment, landfill leachate and fish tissue.
EPA published Method 1633A, a revised version of the earlier Method 1633, on its website in January 2024 but did not propose it as part of a methods update rule until Jan. 21 of this year, prompting several groups to urge the Trump EPA to withdraw the measure. They argued its Jan. 21 publication subjected it to President Donald Trump’s regulatory freeze.
Instead, EPA reopened the comment period through March 24.
Once the proposed rule is finalized, National Pollutant Discharge Elimination System (NPDES) permits that have PFAS monitoring or discharge requirements are required to rely on the methods to ensure compliance.
Among the comments on the rule were those from wastewater and power utilities warning that the method may be inaccurate, adding to technical concerns expressed by industry and others.
Lenny Siegel, executive director of the environmental watchdog group Center for Public Environmental Oversight (CPEO), questions whether EPA’s mention of the 40 different PFAS in the budget document means EPA will finalize the rule on Method 1633. “That would be a start, but because there are many other PFAS in circulation, there is a need to broaden both analysis and treatment,” he notes. For instance, he points out that a majority of PFAS used in the semiconductor industry are not detected by Method 1633.
And Southerland says she is unsure what the budget document in this section means by “cutting edge methods” since Administrator Lee Zeldin “has delayed the effluent limitation guidelines and the biosolids risk assessment.”
On the language referencing Superfund remedial work on PFAS, a Superfund expert says the document fails to provide enough detail to tell how it will affect PFAS cleanups. Further, the plan to rely solely on tax receipts is unclear as to how much those receipts will be, the source says, noting that the Treasury Department estimates Superfund tax receipts will be $1.6 billion though it is unclear if actual revenue has lived up to expectations.
In addition, the source notes that the Superfund program has dozens to hundreds of sites with lead as a contaminant of concern. “Given the lower screening number for lead, I have not seen any estimates of those costs and number of sites,” the source says. “Depending on the response strategy those will absorb a large portion of the budget.”
This source could also envision a strain on the budget as more groundwater sites have been identifying PFOA and PFOS as contaminants.
Southerland also laments that the proposed 56 percent cut to EPA’s Sustainable and Healthy Communities Research Program would “further compound the damage of the state funding cuts by preventing highly contaminated communities from being able to address their public health threats from PFAS in the absence of state and federal technical assistance.” -- Suzanne Yohannan (syohannan@iwpnews.com)
