In a new report, the U.S. Conference of Mayors documents the growing challenge of water affordability for low income households and communities and calls for “a fresh look at local affordability and national water policy.”
Growth in Local Government Spending on Public Water and Wastewater—But How Much Progress Can American Households Afford? finds the dual impact of increasing annual local government expenditures with declining revenues, along with substantial growth in long-term debt, signals potential for financial distress and local limits on public infrastructure financing.
Local government investment in public water and wastewater infrastructure and services reached a record high in 2010 at $111.4 billion, compared to $7 billion in 1972, according to the report. Public spending on water and wastewater over the decade from 2001 to 2010 was $864 billion.
Spending on water at the local level grew at a faster rate than several national benchmark economic indicators. The rate of growth in public water spending over the decade exceeded the rate of inflation for both capital and operations and maintenance investments. Public water spending increased 60 percent over the decade compared to 37 percent growth in GDP over the same period. Average year-over-year growth in public water spending from 2001-2010 was 5.9 percent.
Local government must provide water and wastewater as essential public services, while meeting requirements imposed by EPA and states to comply with mandates to achieve national clean water goals, the report states. To do so, local governments must raise rates and increase long-term borrowing and debt service obligations. Affordability becomes an issue as these costs are borne disproportionately by households with low, moderate or fixed incomes through increased user rates.
THE REPORT IS FOUND ONLINE:www.usmayors.org/pressreleases/uploads/2013/0502-report-water.pdf.