Water infrastructure is one of those unsexy topics that lawmakers tend to ignore until there’s a crisis. One of the most persuasive ways to garner support for increased water infrastructure funding is to highlight its importance to the Texas economy. Texas 2036, which calls itself “a nonprofit, nonpartisan public policy research and advocacy organization driving state policy solutions with data,” makes a very strong economic case for paying greater attention to water infrastructure in its recent report titled “Foundation for Economic Growth: Assessing Texas’ Water Infrastructure Needs.” The report’s chief author Jeremy Mazur, Texas 2036 director of natural resources and infrastructure policy, asserts that “Texas faces two critical challenges. The first involves the need to expand its water supply portfolio for a drought-prone and growing state … If Texas fails to develop the broad, diversified water supply portfolio needed for the next prolonged, severe drought similar to that of the 1950s” the state could experience annual GDP losses of up to $160 billion with “nearly 800,000 jobs lost, and an exodus of families seeking refuge — and water — elsewhere.”
The second challenge, according to Mazur, involves “addressing the problems attributable to aging, deteriorating water and wastewater infrastructure … The daily inconveniences and sometimes life-altering effects of water system failures … represent thousands of small economic cuts that translate into a meaningful wound to Texas’ economic well-being.” Unless the state makes significant new investments over the next 15 years, “deteriorating water and wastewater systems will contribute to nearly $320 billion in GDP losses for Texas — an amount equal to the size of the state’s current two-year budget.”
State Sen. Charles Perry, chairman of the Texas Senate Committee on Water, Agriculture, and Rural Affairs, finds that current repercussions are already having a stark impact. In a recent commentary for the Texas Water Journal titled “Now or Never: It’s Time to Address Water Scarcity in Texas,” Perry describes how “[c]ities and towns across the state are limiting, if not altogether withholding, development permits over water concerns. In August 2024, the city of Conroe, near Houston, adopted a temporary development moratorium due to water scarcity. Local governments in the Rio Grande Valley are discussing the same option. In Central Texas, permits for water wells and groundwater withdrawals are becoming increasingly contentious as springs and existing wells have run dry in recent years.”
Both gentlemen contend that the main issue is funding. Mazur, for example, makes a compelling case for the “substantial funding gap … between Texas’ long-term water infrastructure funding needs and the projected state and federal funding effort.” Among the many examples cited to demonstrate the existing shortfall, Mazur reports that the Texas Water Development Board (TWDB), which awards funds for infrastructure projects in Texas, received “applications totaling nearly $4.6 billion for only $481.8 million in available [wastewater infrastructure] funding” in state fiscal year 2025. “This amounts to a record-setting subscription rate of $9.48 for every available dollar.” The numbers are even more staggering for drinking water projects. In the same state fiscal year, according to Mazur, “TWBD received over $4.6 billion in [drinking water infrastructure] applications for only $444.4 million in available funding, a record-setting subscription rate of $10.45 for every available dollar.” Based on these and other data, Mazur identifies “a long-term funding gap of over $110 billion for Texas’ water infrastructure” in the coming years.
In the face of these challenges, both Perry and Mazur argue that the 89th Legislature, which convenes this month in Austin, must act quickly in order to avoid “endangering both the premise and promise of the Texas economic miracle,” in Mazur’s words. The recommended actions entail two steps. Step 1 would establish a dedicated revenue stream for water infrastructure funding. This could involve committing a set portion of collected sales tax to the Texas Water Fund, which “follows the model for state highway funding approved by the Legislature and voters in 2015.” According to Mazur, “the dedication of sales tax revenues would provide more reliable funding for water infrastructure needs … because state sales tax collections grow in concert with greater state economic activity.” This approach “replicates the successful funding model already used for state transportation projects” and offers “the reliable funding stream needed” to provide a minimum of $1 billion per state fiscal year that will be required “to underwrite Texas’ long-term water infrastructure needs.”
Step 2 would involve recapitalizing the Texas Water Fund with an interim endowment. Mazur recommends that “at least $5 billion [in budget surplus funds] be allocated towards the Texas Water Fund” as a “one-time deposit” to provide “bridge” financing until sales tax revenues can be collected. This increased funding will also require “enhanced legislative oversight and transparency,” according to Mazur, such as annual reports from the TWDB to the Legislature, and a “publicly-facing project tracker that quantifies progress made towards addressing the state’s water supply deficit and aging, deteriorating water systems.”
After Presidio County’s tragic loss of TWDB funding last year, one would also hope for a reformed application process that is more responsive to rural realities.
In articulating the quandary confronting the 89th Legislature, Perry emphasizes that “[w]ater infrastructure is costly and takes years of planning and construction to develop, but it will be more costly and more consequential the longer we wait to get started.”
Visit http://bit.ly/3PAWziz to view the full report.
Trey Gerfers serves as general manager of the Presidio County Underground Water Conservation District. A San Antonio native, he has lived in Marfa since 2013 and can be reached at tgerfers@pcuwcd.org.