Similar investments are appearing nationwide. State and local governments put more than $50.8 billion into sewage and waste disposal construction and $34.1 billion into water supply projects at a seasonally adjusted annual rate in June 2025, according to U.S. Census Bureau data.

Those figures represent increases of 83% and 75%, respectively, compared with June 2019, making water and sewer spending comparable in scale to bridge and school construction. 

Federal labor statistics show payroll employment in water and sewer line construction reached about 220,000 earlier this year—roughly the same size as the U.S. highway and bridge construction workforce and up 16% since 2019, slightly faster growth than construction overall. 

Jennifer Perkins, a senior government industry specialist at Brightly Software. Image courtesy of Siemens

“With the future of federal funding uncertain, municipalities are moving quickly to put today’s dollars to work,” said Jennifer Perkins, senior government industry specialist at Brightly Software, a Siemens company. 

“By front-loading investments in water, energy and broadband—and using asset technology and lifecycle data to model performance—local leaders can reduce failures, demonstrate ROI and make their systems ready for growth,” Perkins added.

Analysts at Brookings note that local governments in the South devoted nearly 8% of their flexible ARPA allocations to water and sewer, more than double the share in other regions.

“It’s become a playbook,” said Joseph Kane, infrastructure fellow at Brookings Metro, in a February report. “Localities are using federal recovery dollars and economic development funds to make sites shovel-ready, then recouping costs through utility rates or private investment.”

Texas Projects Anchor the Strategy

The Tyler project is one of several Texas examples funded in recent years. Since 2021, the U.S. Economic Development Administration has awarded millions to extend water and sewer lines into industrial parks across the state. 

Since 2021, Texas communities have received more than $12 million in U.S. Economic Development Administration awards for water and sewer extensions at industrial sites, with activity peaking in 2024.

DeKalb was among the earliest with a $2-million award in 2021 to overhaul utility infrastructure at a 36-acre site. Big Spring followed in 2022 with $3.3 million for wastewater improvements at the Crossroads Business Park. Paris received $1.3 million in 2023 for upgrades at its Northwest Industrial Park. In 2024, Copperas Cove secured $3.5 million for water, sewer and roadway improvements tied to semiconductor investment, while Yoakum received $2.5 million for new water and sewer lines at its industrial park.

While Texas stands out for the number of awards in recent years, federal data show that the state’s overall share is largely a reflection of its size and economic weight. Per capita, smaller or more distressed states such as Montana, Iowa and West Virginia often receive more EDA funding relative to their population. However, Texas ranks among the top states in total dollars awarded.

A National Playbook Emerges

U.S. Census Bureau data show state and local governments nearly doubled annual water and sewer construction spending between 2019 and 2025, reaching levels comparable to bridge and school building programs.

U.S. Census Bureau data show state and local governments nearly doubled annual water and sewer construction spending between 2019 and 2025, reaching levels comparable to bridge and school building programs.

Associated Builders and Contractors Chief Economist Anirban Basu said that construction spending on sewage and waste disposal has surged more than 80% over the past five years—about twice the pace of overall construction.

“While momentum has waned in certain public construction segments over the past year, spending in the sewage and waste disposal category has continued to grow, rising 11.4% over the past 12 months,” he said.

Other communities have followed a similar path. In 2023, Stuttgart, Ark., received an EDA grant to expand water and sewer service at an industrial park. That same year, Yellowstone County, Mont., secured funds for its Lockwood Targeted Economic Development District. 

In 2022, Story City, Iowa, won support for upgrades at a business park along Interstate 35. And in 2023, Effingham County, Ga., obtained an award to extend utilities for an auto supplier at Grande View Industrial Park.

These projects reflect a strategy of pairing federal support with local matching dollars to make undeveloped tracts competitive for industry. The Environmental Protection Agency’s 2022 Clean Watersheds Needs Survey pegged national wastewater and stormwater investment needs at $630.1 billion over 20 years, a 45% increase from 2016. Meanwhile, the American Water Works Association’s 2025 State of the Water Industry survey again ranked capital financing as utilities’ top challenge.

The federal investment has allowed communities to accelerate projects that might otherwise have been delayed. 

Yet analysts warn that the challenge is not only financial. A February report by consulting firm COWI cautions that North America’s water future depends as much on people as on pipes and pumps. The firm points to a shortage of engineers and technicians just as many systems reach the end of their design life and federal recovery dollars peak, raising concerns about whether local utilities will have the skilled workforce to deliver projects at scale.

In Tyler, officials estimate the John Soules Foods line will pay for itself within seven years. In Copperas Cove, leaders describe water and sewer extensions as essential to attracting chip manufacturing. Big Spring officials tout the Crossroads Business Park as a magnet for new employers now that basic utilities are in place. “This is more than an infrastructure project. It is a step toward economic opportunity,” Tyler Mayor Don Warren said when the sewer extension was approved.

With utility construction spending nearly doubling since 2019 and local governments leveraging federal programs to underwrite projects, a growing trend is coming into sharper focus: pipes first and payrolls should follow.