What Happened: The United States Conference of Mayors just released research findings indicating the
Great Recession (December 2007-June 2009) caused municipal water and sewer utilities to pare budgets,
shift resources to continue service for public health protection, and ultimately stifle up to $105 billion in
utility infrastructure investment over more than a decade. Utilities charge customers for service through
direct billing or through property taxes (or combination) and recessions with high unemployment threaten
the revenue streams so budgets shift resources to accomplish priority missions. These lingering effects on
infrastructure spending are important and may offer an insight into what the covid-19 recession impacts
might look like.
Why it’s Important: It is generally thought that the nation needs to invest $700 billion to renew the vast
inventory of physical assets that protects public health, the environment and supports the nation’s economy.
The current inventory – 16,000 sewer plants, 145,000 water systems and 6-8 million miles of pipes – serves
more than 280 million Americans. The inventory is aging but also facing an increase in federal mandates
with significant costs that pressure high rate increases for customers. This has implications for the future of
“If the Covid-19 recession matches the Great Recession impact on utility infrastructure spending
we will have lost a full generation of needed reinvestment to protect public health, the
environment and the economy.”
Want the Facts?
- How much are cities spending on utility infrastructure?
- How much did it decline because of the Great Recession?
- What categories of utility infrastructure spending declined?
- Will the Covid-19 recession be as bad or worse for utility infrastructure?