A new report highlights a critical role for state and local leaders in addressing the growing financial and infrastructure challenges facing US water and wastewater utilities. With an estimated $110 billion funding gap in 2024, set to balloon to $194 billion by 2030, the sector is struggling to keep pace with aging infrastructure, rising operational costs, and increasing climate-related hazards.
Challenges include:
- Underfunded utilities are grappling with aging infrastructure and rising maintenance costs.
- Climate change exacerbates challenges through water stress and increased flooding.
- The funding gap hinders utilities' ability to provide essential services, with potentially catastrophic consequences for communities.
The report argues that state and local leaders are uniquely positioned to provide crucial support. They can implement ten key actions, utilizing existing funding sources, to close 25-45% of the funding gap. These actions fall into three categories:
- Optimizing Existing Funding: Innovating rate structures, finding new revenue streams, and maximizing state revolving funds.
- Prioritizing Resilience: Developing long-term resilience plans to address climate risks.
- Enabling Operational Efficiencies: Supporting technology adoption, regionalization, and consolidated capital expenditures.
By taking these steps, local leaders can significantly improve the financial health of water utilities; enhance infrastructure resilience against climate hazards; drive economic development through a stable water sector; and improve the lives and livelihoods of their constituents.
While a complete overhaul of water system funding is needed, local leaders can make a substantial impact by maximizing existing resources and driving innovation.
