Wisconsin approves $732M for water infrastructure upgrades

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The state’s powerful finance committee approved adding more than $700 million to the state budget for municipalities to borrow for water infrastructure projects.

The Joint Finance Committee approved increasing borrowing power for the Environmental Improvement Fund by $732.3 million. The program provides funding for the Clean Water Fund and Safe Drinking Water Loan Program.

“These are programs where the demand exceeds the capacity we have,” said State Sen. Howard Marklein, co-chair of the committee and Republican from Spring Green, at a news conference. “These are important to our communities, upgrades for our wastewater treatment plans and upgrades to public drinking water systems across the state,” he added.

The EIF is funded through federal capital grants and needs a state match of 20%, a budget summary showed. The committee also approved raising the state match increase by more than $73.6 million, and increased revenue obligation bonding by more than $658.5 million. The latter will be used to fund around 87% of expected financial assistance needs for four years, the summary showed.

The JFC decided as Wisconsin communities deal with aging infrastructure and contaminants such as polyfluoroalkyl substances or PFAS, State Sen. Eric Wimberger, a JFC member and Republican from Oconto, said in a statement.

The EIF offered loans at a starting interest rate of 2.2% – lower than the 4.0% market rate – to communities who wanted to address water contaminants or expand their existing water infrastructure, Wimberger’s office said. Some smaller communities can receive lower rates of 1.3% or even 0%, officials added.

In the 2025 loan cycle, the Wisconsin Department of Natural Resources reported applications exceeded available funding by $89.9 million, officials noted.

Engineers, architects and designers applaud the approval

The American Council of Engineering Companies of Wisconsin, which represents engineers, architects and other design professionals, applauded the JFC’s approval.

In February, the group asked the Legislature to increase bonding authority for the EIF in the 2025-27 biennial budget by more than $1.25 billion to meet an expected increase in requests in the next four years.

Gov. Tony Evers initially requested $750 million in additional funding for EIF, however the Legislature cut most of the budget and developed their own.

In 2024, the EIF didn’t meet all the demand from communities, ACEC-WI officials said. Council officials told lawmakers the shortfall hampered work on vital water projects for municipalities. In the last budget, the JFC increased bonding authority by $46 million.

“Larger municipalities may be forced to bond at higher rates while smaller ones may not have the ability to do the project at all because of the cost and complexity of obtaining private loans,” officials said in a memo. “These sanitary and water projects are critical for the health, safety and welfare of Wisconsin residents,” they added.

Cities and villages already submitting applications for next cycle

Through previous EIF loans, the village of Pulaski received nearly $14 million to connect to Green Bay’s water system and the city of Kaukauna received $2.3 million to replace water mains, Wimberger’s office said. The city of Green Bay received $500,000 to help replace lead service lines, officials added.

Villages and cities from northeast Wisconsin have already submitted “dozens” of applications for EIF funding for the 2026 cycle, officials noted.

“Today’s bipartisan action by the Joint Finance Committee promotes the interests of municipal taxpayers and ratepayers, economic development, public health, clean water and Wisconsin’s local governments,” said Toni Herkert, government affairs director of the League of Wisconsin Municipalities, in a statement.

“Everyday around this state, cities and villages with populations ranging from less than 100 to over 500,000 work tirelessly to ensure the delivery of safe and drinkable water to homes, schools, and businesses, and consistently ensure wastewater effluent is safe and clean for release back into the environment,” Herkert continued. “This is not only a labor-intensive process, but is also capital-intensive. The result of this work ensures that three-quarters of the state’s residents and nine-tenths of the state’s businesses continue to have unimpeded delivery of these critical municipal services,” she added.