Infrastructure has been in the news a lot over the last couple of years, and not for positive reasons. Across the U.S., roads, bridges, pipelines, and other public infrastructure are in need of replacement and repair. Water infrastructure — our pipes, mains, valves, pumps, treatment facilities, and reservoirs — is also aging. Many of our water systems were built in the 1900s (or earlier!) and are reaching the end of their designed life.
Part of the problem is that the initial cost for a lot of water infrastructure was paid for in large part by the federal government in the form of direct investment, low-interest loans, or grants. Today, those funding sources haven’t kept pace. In fact, despite the growing need, the federal government’s share of capital spending in the water sector fell from 63% in 1977 to 9% of total capital spending in 2017. The American Water Works Association estimates that $1 trillion is needed just for drinking water infrastructure investment in the U.S. This burden is placed mostly on us, the ratepayers and customers, to pay for repairs and replacements to our local water and wastewater systems.
This raises an important concern. If communities have to pay for water infrastructure investments, what will that mean for low-income communities? Deteriorating infrastructure is a threat to public health, and increasing rates is a threat to poor communities where citizens can’t afford to pay their water bills. As many as 12% of Americans can’t afford their current water rates, and rates are continuing to rise each year to try to catch up with the growing infrastructure investment needs.
The Trump administration has spoken about infrastructure being a priority. The administration’s plans to increase investment generally focus on encouraging more private investment in public infrastructure. The challenge for water infrastructure (as opposed to, say, a bridge or toll road) is that the return on investment for water infrastructure is slow and modest. Private investment for water will likely not be able to meet the existing needs. Instead, long-term federal funding may be needed to help subsidize the cost of aging water infrastructure, particularly in vulnerable communities.
One option is to increase the funding of the EPA’s Clean Water State Revolving Fund programs and the Water and Infrastructure Finance and Innovation Act (WIFIA) program. This year, WIFIA received $63 million in funding, which doubled its funding from 2017. That funding will be leveraged to fund about $11 billion in infrastructure projects. This still leaves a gap of $1 trillion, however, so it only scratches the surface.
Photo by Jonas Verstuyft on Unsplash
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