States Face Challenges in Gauging Water Infrastructure Needs

State and local governments could be on the hook for more than $1.2 trillion over the next 20 years to maintain and improve the country’s drinking water, wastewater, and stormwater infrastructure. However, the fragmented nature of water systems—some states have more than 1,000 separate managed systems—can lead to data and reporting challenges. As a result, policymakers often lack a complete understanding of their long-term drinking water and wastewater needs.

Each year, states are required to complete what are known as intended use plans in order to receive money from the federal Drinking Water State Revolving Fund for water projects. Those plans list projects that are expected to receive funding and can provide a good starting point for states trying to gauge need. However, they typically include only “fully scoped” projects that are ready to be funded and completed.

And although the Environmental Protection Agency’s periodic surveys on drinking water and clean water needs provide more comprehensive estimates, actual state funding needs are probably much higher due to data and reporting challenges.

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Because of these known information gaps, some states collect and include relevant data in long-term planning documents, such as state water plans. Historically, states have used water plans to establish strategies for managing water resources, but as critical infrastructure ages, that process increasingly includes the need to plan for physical repairs and upgrades.

To examine which states are collecting this information and what strategies they are using, The Pew Charitable Trusts reviewed more than 30 state water plans and related documents. Although the range of what is included in the plans varies, at least a handful include data on statewide investment gaps. Surveying or working directly with local or regional representatives was one of the most popular approaches to discerning the size of those gaps. For example:

• The Arkansas Water Plan, completed in 2014, includes a survey of small, medium, and large public water and wastewater utilities. The survey asked each about their planning efforts, including likely financing sources. It found that from 2014 to 2024, drinking water and wastewater providers in the state would need a combined $9.5 billion to fund necessary infrastructure improvements. Arkansas began updating its water plan in 2024. The new version is expected to include an update to the survey that will also incorporate resiliency planning.
• The 2020 Minnesota State Water Plan highlights data in the “Minnesota Wastewater Infrastructure System Needs and Costs” report, which is updated every two years—most recently in 2024—and can offer a glimpse of need and cost trends that could inform the state’s 2030 water plan. The report outlines the costs associated with community wastewater infrastructure projects, information gathered through the Minnesota Wastewater Infrastructure Needs Survey. In the 2024 report, the state found that communities will need nearly $6.5 billion for wastewater infrastructure projects to be completed over the next 20 years, with aging infrastructure cited as a significant growing expense.
• The New Mexico State Water Plan, last updated in 2018, includes a list of water “projects, programs, and policies” totaling $4.3 billion that was compiled by stakeholders organized into local or regional committees across the state. The plan includes projects meant to have wide-reaching impact with the potential for collaboration in both funding and execution. The list consists of a range of projects, including those for public water and wastewater infrastructure, that totaled $3.1 billion. In the state’s 2023 State Water Plan 5-Year Review, a task force made several recommendations. It committed to leveraging federal funds to modernize New Mexico’s water infrastructure, reflecting a statewide desire to address local infrastructure needs.
• North Dakota’s 2021 Water Development Plan acknowledges the state’s aging infrastructure, and its need for long-term water solutions, by estimating short-term, 10-year, and 50-year funding needs. The plan notes that the State Water Commission has worked with project sponsors to estimate current project needs, which as of 2021 total $6.1 billion over the next 10 years. In 2018, the State Water Commission, the North Dakota League of Cities, and the North Dakota Rural Water Systems Association initiated a survey to better understand the state’s water infrastructure needs. It found that municipal water suppliers would need $3.6 billion over 50 years, while rural suppliers would need an estimated $1.4 billion over the same period.

In addition to surveying regions and localities, states have taken less hands-on approaches to gathering data on funding needs. North Carolina’s 2017 Statewide Water and Wastewater Infrastructure Master Plan, for example, includes cost estimates that quantified drinking water and clean water needs using data from the EPA, American Society of Civil Engineers, and North Carolina Rural Economic Development Center. Similarly, a technical working group in Utah used financial statements, engineering estimates, and other planning documents to develop cost estimates for future projects in the 2020 Utah Statewide Water Infrastructure Plan.

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Pew’s analysis shows that the methods for estimating water funding gaps vary. Still, efforts to collect statewide data are becoming increasingly important. Although U.S. water utilities have historically been funded at the local level, several states are stepping in to provide dedicated funding sources for water projects.

For example, earlier this summer, Texas passed a law directing $1 billion annually to water infrastructure projects for the next 20 years. And in 2024, the Utah Legislature established the Water Infrastructure Fund, which required two studies on existing and potential funding mechanisms. Lawmakers also created a unified plan to rank and prioritize eligible projects. The bill initially appropriated $5 million in one-time funding from the general fund in fiscal 2025 to address what the American Society of Civil Engineers estimatesto be a $38.2 billion need for drinking water and $15 billion need for water-quality projects by 2060.

Without reliable statewide estimates of funding needs, states may not have a clear view of their overall water infrastructure or be able to determine which communities have the greatest need. Incorporating infrastructure funding data in existing planning documents, such as state water plans, would give states a more holistic view of the investment gap on drinking and clean water infrastructure.

Working directly with local utilities and governments that are familiar with their funding concerns and infrastructure conditions, either through well-designed surveys or by appointing regional representatives to share information and expertise, could give states a more comprehensive picture of water infrastructure funding gaps, especially in communities that may not have the resources to develop long-term planning documents.

Mollie Mills and Christine Pulfrey are officers with The Pew Charitable Trusts’ state fiscal policy project.