Who Pays for the Water Pipes, Pumps and Treatment Works? – Local Government Expenditures on Sewer and Water – 1991 to 2005

Source: Rich Anderson, Mayors Water Conference, 2007

Local government spent $82 billion to provide sewer and water services and infrastructure in FY2005, up from $45 billion in FY1992. The local government share of spending on sewer is just over 95 percent, and the state share is just under 5 percent. The local government share of spending on water supply is over 99 percent. Total spending on sewer and water from 1991-1992 to 2004-2005 is $841 billion.

The trend is for greater spending levels. Factors contributing to the increased need for investment include: population growth and land use development; an aging water infrastructure that needs constant maintenance and rehabilitation; and climate change impacts that threaten water supplies from drought; reduced snow-pack; salt water intrusion on coastal aquifers from rising sea levels; increased storms, hurricanes and flooding that require infrastructure hardening.

Local government is the primary investor in public-purpose sewer and water. Costs and spending will increase dramatically over time, and the added costs from climate change impacts are not currently included in infrastructure financing discussions. The nation’s cities need more help from the federal government and greater access to private equity to address investment needs over the next 50 years.

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