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In Texas, $1B Extra for Water Is Just a Start

A new $1 billion fund will help Texas communities fix crumbling water infrastructure. Advocates say much more will be needed due to population growth and climate change.

The Trammell Crow Lake at Trinity Park in Dallas, Texas
The Trammell Crow Lake at Trinity Park in Dallas, Texas experienced drought this summer, causing a portion of the lake to dry up as of Aug. 1, 2023. (Irwin Thompson/The Dallas Morning News/TNS)
In Brief:
  • Texas voters approved a $1 billion allocation to a new Texas Water Fund, which will distribute money to state water assistance programs and help develop new water supply.

  • The proposal was sponsored by Republican state Sen. Charles Perry.

  • Water infrastructure issues affect both rural and urban areas in Texas. Advocates say much more funding will be needed in the coming decades.

  • If only Texas lawmakers could literally make it rain, all their water problems would be solved. Instead, amid a $33 billion budget surplus last year, they tried to do the next best thing.

    The Legislature approved a bill last summer, backed by Republican state Sen. Charles Perry, to create a new Texas Water Fund. The fund will distribute $1 billion in funding to water infrastructure programs throughout the state and invest in new water supply. Voters approved the proposal, which required an amendment to the state constitution, with a 78 percent majority. The funding is meant to help Texas communities address a kaleidoscope of water-related challenges, including drought, floods, urban growth and aging pipes.

    Pressures on Texas water systems from population growth and climate change are only expected to increase, and so will the need for more funding over time, advocates say. “It’s been a real struggle for a lot of communities to keep up with their infrastructure needs,” says Sarah Kirkle, policy director for the Texas Water Conservation Association, an industry group.

    Back to the 1950s

    Texas is one of the most drought-prone states in the U.S. After a record drought in the 1950s, the state created the Texas Water Development Board, charged with building and managing water supply, which invested in dozens of new reservoirs. Those efforts substantially increased the total amount of water per person in the state, Kirkle says. But she warns that the per capita supply has gradually shrunk back to 1950s levels. And extreme weather continues to test the state’s water system.

    Winter Storm Uri in 2021 revealed weaknesses in much of Texas’ infrastructure. Freezing temperatures burst water mains, while some water treatment plants lost power during the storms. About half the state lost access to running water during the storm, according to one survey.

    But it isn’t just extreme weather that threatens water systems. Much water infrastructure is simply getting too old. Water rates haven’t kept pace with maintenance costs in many places, so new sources of funding are needed to fix infrastructure that’s increasingly breaking down. “We lose 136 billion gallons of water a year to leaking pipes in Texas,” Perry told a news station in Lubbock, in his district, last year. “There is unique opportunity this session to invest in our state so we can avoid boil water notices from broken pipes and fix our aging infrastructure.”

    Seeking New Supply

    The Texas Water Fund will be administered by the Texas Water Development Board. Legislators specified that the $1 billion allocation to the new fund should be spent primarily to supplement existing programs. That includes programs that help municipalities and water authorities complete projects outlined in the Texas Water Plan; revolving funds for wastewater, stormwater and drinking water; and low-cost financing for rural water infrastructure projects. Many of those programs help localities maintain, repair and replace aging water systems.

    A quarter of the new funding is dedicated for a special fund focused on building new water supply. The funds will support projects in desalination for marine and brackish water, treatment of water produced in oil and gas development, and aquifer storage and recovery projects. Some of those initiatives are still in the experimental stage. Processes like desalination, which some advocates hope will help states mitigate expected water shortages in coming years, can be exceptionally costly to build and operate.

    “The biggest challenge we’ve had in Texas for developing these water supply projects has been getting the money together to underwrite them,” says Jeremy Mazur, a policy adviser at Texas 2036, an advocacy group founded by Tom Luce, a longtime adviser to former presidential candidate Ross Perot.

    Always Hoping for More

    Water policy groups have welcomed the new fund while emphasizing that $1 billion is not nearly enough to address all the state’s water needs. Those needs add up to more than $150 billion over the next 50 years, Mazur says, split roughly between new water supply projects and fixes to existing drinking water and wastewater infrastructure.

    Texas 2036 also supported a resolution last year, sponsored by Republican state Rep. Travis Clardy, which would have directed a portion of the state sales tax to water infrastructure projects. That would be a way to establish long-term funding for water infrastructure, similar to how some transportation projects are funded in Texas and other states, Mazur says. (Like Sen. Perry, Clardy was unavailable for an interview.)

    The proposal didn’t pass the state Senate, but Mazur says he expects it will make a comeback during the 2025 legislative session. “What we’re trying to do with water is to take the transportation model and to apply it to our water infrastructure," he says, "so that we can have dedicated, predictable funding for our state's water infrastructure needs."

    Republicans have had full control of the Texas state government for more than 20 years. The current Legislature is “politically allergic” to adopting new taxes, Mazur says, although growth in oil and gas revenues and higher sales tax revenues have allowed the state to make investments in public infrastructure.

    Water challenges cut across the state’s regional divisions, with metro areas struggling to keep up with the needs of growing communities and rural areas struggling to maintain aging infrastructure with a small base of ratepayers. The creation of the Texas Water Fund showed that the state’s lawmakers and voters take the issue seriously, but solving the issue will be an ongoing challenge.

    “We’re going to be facing increased drought — that’s just going to be the way of life in Texas,” says Vanessa Puig-Williams, director of the Environmental Defense Fund’s water resiliency efforts in the state. Increased floods and periods of extreme heat and cold are anticipated too.

    “That is very hard on older water infrastructure," she says. "Right now, we don’t have enough money to really address the needs across the state.”

    Jared Brey is a senior staff writer for Governing. He can be found on Twitter at @jaredbrey.
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