Despite Population Growth, Federal Spending On Water Utility Projects Plunges

The federal government has steadily backed away from its role in funding water infrastructure, but policymakers are considering a variety of innovative ways to make federal money available for local water projects without the need for direct federal spending.

“The past 38 years have actually been marked by a huge federal retreat from helping cities fund water projects,” Politico reported in a lengthy piece on the role of the federal government in funding water infrastructure.

Federal spending on water utility projects has dropped 75 percent since 1977, Politico reported, citing Congressional Budget Office estimates. In the meantime, population growth has put more strain on water infrastructure.

As water infrastructure costs fall largely on cities and states, there is an “an especially heavy toll on the people of poorer cities like Flint, with an average income of $39,000. The city’s lead problem was, after all, the result of a badly managed attempt to save money,” Politico reported.

“In the world of infrastructure, water stands out for the startlingly small role the federal government plays in building and maintaining our crucial systems. In 2014, federal dollars accounted for 22 percent of mass-transit money, 28 percent of highway spending and 44 percent of aviation projects. For water utilities, that number was just 4 percent,” the report said.

In the current legislative environment, it seems unlikely Congress will add lots of new money for water infrastructure any time soon. But policymakers say there are other ways for Washington to increase its role in funding water projects.

“In the absence of new money, one new idea has been arising: finding better ways for cities to help finance their own projects. The federal government has financial levers besides pure spending programs, and the water funding squeeze has forced policymakers to develop new ways to turn scarce federal dollars into larger loans for local communities,” Politico reported.

A bill under consideration in the Senate “included a grab bag of policies to help pay for water, including capitalizing the yet-to-be-funded Water Infrastructure Finance and Innovation Act and establishing a water infrastructure trust fund modeled after the Highway Trust Fund. The Obama administration has also created multiple centers to create innovative ways to increase private investment, though some are so new that few water experts have heard of them,” Politico reported.

“These unproven financing ideas could ultimately succeed in funneling private dollars for the public benefit—but they could also fail, leaving state and local officials with few options. With thousands of water main breaks and safety issues each year, federal policymakers have limited time to find a solution,” the report said.

Cities are already dealing with the challenges of crumbling infrastructure crisis on a daily basis. According to the American Society of Civil Engineers, "At the dawn of the 21st century, much of our drinking water infrastructure is nearing the end of its useful life. There are an estimated 240,000 water main breaks per year in the United States."