In early March, the Congressional Budget Office issued a report detailing public spending (spending by federal, state, and local governments) on six types of infrastructure – highways, mass transit and rail, aviation, water transportation, water resources, and water utilities – from 1956 to 2014. The report, prepared at the request of the Senate Finance Committee, updated information provided in the CBO’s 2010 compilation data, the most recent update.
The two types of water infrastructure spending measured by the report are water resources – water containment systems (dams, levees, reservoirs, and watersheds) and sources of freshwater (lakes and rivers); and water utilities – supply systems for distributing potable water as well as wastewater and sewage treatment systems and plants.
Among the report’s pertinent findings:
- Most public spending on infrastructure comes from state and local governments. In 2014, for example, the federal government spent $96 billion on infrastructure projects. That figure is dwarfed by the $320 billion spent by state and local governments in 2014.
- Forty seven percent of that money spent by governmental agencies was used for operating expenses and maintenance of existing infrastructure, while 43 percent was spent on new construction. This reflects a greater federal share of capital improvements and a greater state share of operations and maintenance because capital improvements have become substantially more expensive due to age, deterioration, and scope of capital needs.
- Although all levels of government have spent less, in real terms (i.e.inflation adjusted) on transportation and water infrastructure in recent years than in the past, the greatest reduction has occurred at the federal level. Adjusted for inflation, federal spending on transportation and water infrastructure has fallen by about 19 percent since 2003, while spending by states and localities has fallen by about 5 percent over that period.
- Roughly a third of all public infrastructure spending is on water infrastructure. In 2014, for example, transportation infrastructure accounted for about two-thirds ($279 billion) of all public spending on transportation and water infrastructure. The remaining one-third ($137 billion) went to water infrastructure.
- Federal spending on transportation and water infrastructure is highly concentrated among a few types of infrastructure, and water-related infrastructure accounts for a far smaller share than spending on transportation infrastructure. In 2014, three types of transportation infrastructure accounted for four-fifths of that spending – 48 percent went to highways; 17 percent to aviation; and 16 percent to mass transit and rail. Water-related infrastructure claimed just 10 percent of those outlays and water utilities and water transportation claiming 5 percent and 4 percent, respectively. This allocation of federal spending has remained fairly stable over the past several decades.
We at CWC believe that this report exposes the significant deficiency in public funding – particularly at the federal level – of water infrastructure. We see a viscous cycle emerging on the state and local level. State and local governments, which must balance their annual budgets, see a growing burden of operational and maintenance costs as a result of declining federal investments for capital improvements. As the need for capital improvement increases, so do the costs of operating and maintaining the infrastructure.
The American way of life relies on access to water infrastructure, and that is why the federal government must take a more-active role in financing infrastructure projects. The needs of communities all over the country for capital investments in water infrastructure remain critical, so we at CWC will continue advocating for stemming the tide of decreasing federal water infrastructure investment.
For the full CBO report, click here.