Executive Summary
The biggest capital project, by far, in many American cities is one that few of their citizens even know about and that almost none has ever seen: the legally mandated retrofitting of “combined sewers,” sewers in which storm-water runoff and sanitary waste from buildings are channeled into the same pipes to reduce or eliminate overflows of untreated wastewater into local waterways. These combined-sewer projects—whose price tag will run into billions of dollars in some places—represent large unfunded mandates.
Key Findings
- Although the federal government, via the Clean Water Act, is requiring cities to undertake such projects, the bulk of federal funding for sewers comes in the form of loans that must be repaid: in most cities, local citizens and property owners will pay the vast majority of the costs through higher utility bills, property taxes, and other local funding sources.
- Raising sewer rates to pay for expensive combined-sewer overflow remediation will serve as a de facto regressive tax on lower-income households, while rendering such cities less competitive economically.
- To achieve Clean Water Act compliance in a way that minimizes the impact on lower-income residents and on economic competitiveness, these localities require significant assistance, such as support for a more aggressive shift to green infrastructure; modifying sewer rate structures; revisiting EPA affordability guidelines; renewed or enhanced federal and state aid; and redirecting other aid sources to sewer-mandate compliance
