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srate Solutions to Water Problems: Smaller -Scale and Site-Specific Annual federal expenditures for water projects have decreased from approximately $5.5 billion in 1960 to approximately $4 billion in 1984. 32 Joan Warren Office of Solid Waste U.S. Environmental Protection Agency The shift of responsibility for water management from the federal government to the states may lead to smaller-scale - and more cost- effective - responses to water problems across the nation. Reagan Administration policies, combined with changing water issues, have brought to Wlshington a new philosophy about the role of the federal government in water management. Previous administrations, both Republican and Democratic, sought an active management and financial role for the federal government: through construction of multi-purpose water resources development projects and wastewater treatment facilities, the planning and coordinating activities of the Water Resources Council and the River Basin Commissions, state grants for water resource planning and the research activities of the Office of Water Research and Technology. Significant Reductions in Federal Participation With the exception of funding for the Bureau of Reclamation, the current administration has significantly reduced or eliminated all of these activities. Annual federal expenditures for water projects, including navigation and port development, have decreased from approximately $5.5 billion in 1960 to approximately $4 billion in 1984. The federal role in protecting water quality increased greatly with the enactment of the Federal Water Pollution Control Act Amendments of 1972. The Act established not only a new federal regulatory program, which would be eventually turned over to the states to manage, but also authorized a massive funding program for the construction of wastewater treatment facilities. Program funding levels reached a high of $5.5 billion per year in 1976 and 1977, with federal appropriations dropping to $2,4 billion annually in 1982 through 1985. This has been in addition to a reduction of the 75 percent federal share for project costs to 55 percent beginning to 1985. Finally, the National Water Resources Council has been abolished. While many regarded the Council as ineffective, it was an easily identifiable source of information on federal water activities. No such source now exists; information must be obtained from the myriad of federal agencies with some responsibility for federal water activities. Responding to Increased Responsibilities In addition, the nature of emerging water issues has increased the responsibilities of the various regions, and the state and local governments. By 1982 most of the major water development projects had been completed, The 1983 National Water Summary concluded that "...the best reservoir sites have been put to use, and new reservoir development is likely to be less cost -effective than that which has occurred in the past." Funding, however, is still needed not only for new construction but also for rehabilitation of our nation's water "infrastructure." State and local governments are undertaking smaller-scale projects that can be financed and completed expeditiously at these levels of government with the assistance of private beneficiaries, According to a recent study by the Congressional Budget Office, states began to utilize a variety of different financing techniques in 1981 and 1982 which were independent of federal expenditures. These included: direct appropriations (36 states), general obligation or "GO" bonds (23), revenue bonds (11), dedicated taxes (28), and revolving or special funds (27).