Indiana's Water Funding Gap Is In The Billions

Indiana is facing deep water and wastewater infrastructure challenges.

A new year-long study from Indiana University researchers, funded by the Indiana Advisory Commission on Intergovernmental Relations, highlights major water difficulties looming for the state. The study says that the “20-year statewide capital needs for wastewater and drinking water infrastructure are $15.6 billion to $17.5 billion.”

Meanwhile, “Indiana has a $6.5 to $8.5 billion 20-year funding gap. This translates to an annual funding gap of $326 to $423 million.”

“The estimates are based on self-reporting, surveys, engineering models, and other data depending on the type of infrastructure. A range of estimates is presented to account for the uncertainty associated with methodologies developed in the absence of complete site-specific data,” according to a statement from the university.

The problem affects every area of the state. All 92 counties in Indiana have “significant” capital needs, the report said.

Where is the money going to come from? The answer, the study said, is ratepayers.

“Even with good management, some communities will not be able to afford their infrastructure needs because of low customer incomes and/or relatively expensive project costs due to a limited number of customers and distance from other communities,” the report said.

“Indiana will need significant additional funding to meet community water and wastewater infrastructure needs over the next 20 years. Ultimately, much of the infrastructure will be paid for with user charges. Utilities must be encouraged to set user rates that allow them to address capital depreciation, operations and maintenance, and other needs,” it said.

The study also called for policy officials to take action to fund water infrastructure.

“To serve the most challenged communities additional grant funds and low-or-no interest loans are needed. In addition to more funding support, Indiana must institutionalize the maintenance of existing septic systems and the availability of additional low cost infrastructure solutions,” the study said.

Republican State Representative Mike Karickhoff, who chairs the Indiana Advisory Commission on Intergovernmental Relations, which funded the study, spoke out about the significance of the findings in a statement.

"This represents a significant challenge for both local and state government," he said. "There has been a lot of focus on roads infrastructure funding in the state, but it's incredibly important that we are aware of the needs for wastewater and drinking water and take appropriate steps to close this funding gap."

To read more about the nation’s infrastructure challenges visit Water Online’s Asset Management Solutions Center.