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ROCKVILLE, MD (December 1, 2021) — In testimony to the U.S. Civil Rights Commission this month, Dr. Steve Hanke, professor of applied economics at Johns Hopkins University and member of the Maryland Public Policy Institute’s academic advisory board, warned the commission members of Baltimore’s worsening water and wastewater infrastructure deterioration. Without a fundamental alteration of the system’s management from a government monopoly to a competitively bid private servicer, the growing water nightmare in Baltimore will only get worse. 
 

“Baltimore clearly isn’t capable of managing its water and wastewater systems, but that hasn’t stopped activists and the city’s political elite from protecting their status as public monopolies,” said Hanke. “It is the only city in the U.S. that prohibits private solutions for fixing its dysfunctional water and sewerage systems, and the harmful consequences of that decision are clear.”
 

The City Council proposed a ballot issue to amend Baltimore’s charter and ban the private sector from any involvement in the city’s water and sewerage systems. The amendment passed in November 2018. Baltimore is the only city in the U.S. that prohibits private solutions for fixing its dysfunctional water and sewerage systems. 
 

“The result of the amendment has been a continuation of prior dysfunction that both the city and state have allowed to go on,” said Hanke. “Baltimore is inexplicably exempt from submitting an annual water audit to the state, something that is required for all other water systems in Maryland serving over 10,000 people.”
 

Massive Water System Waste

Baltimore’s public water distribution system serves an area of approximately 560 square miles and provides potable water to approximately 1.8 million people (about 30% of Maryland’s population). Those people are depending on an ancient system that is quickly breaking down.
 

According to a 2018 internal audit obtained via much haggling with local authorities, 25.7% of the total water supply of Baltimore was wasted away that year due to leaks and breaks — more than 16 billion gallons. 
 

According to the American Water Works Association (AWWA), Baltimore’s water losses are significantly greater than most comparable systems.
 

Out-of-Control Sewage

In 2004, there were 622 sewage backups reported in Baltimore. By 2015, the number had grown close to 5,000.
 

The problem is so bad that the city was sued by the state and federal government. The city lost the suit and was subject to a federal consent decree outlining needed fixes to reduce sewage pollution by 2016.
 

“Baltimore’s wastewater system is arguably in even worse shape than its water system,” said Hanke. “When the 2016 deadline came, Baltimore wasn’t even close to meeting it. As a result, the deadline has been pushed back to 2030.”
 

Overwhelming Water Budget

Baltimore’s water and wastewater systems account for 14% of the city’s total operating budget, roughly equal to the Baltimore Police Department’s operating budget and nearly double that of the Fire Department’s. Water and wastewater dominate the city’s capital budget, accounting for 56% of the total.
 

“The DPW is so mismanaged and the system it runs is so neglected and unanalyzed that there is no way to know how much more funding would be needed to fix the system,” said Hanke. “The only way for Baltimore’s water and wastewater systems to be upgraded and remain affordable to local residents is to introduce the type of private management that has seen success in states across the country and nations around the world.”
       

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Professor Steve H. Hanke, Member of the Maryland Public Policy Institute’s Academic Advisory Board, Testifies before the Maryland Advisory Committee to the U.S. Civil Rights Commission on Water Affordability and Accessibility in Maryland

Prof. Hanke has been an observer of Baltimore’s water system for 52 years. When he joined the Johns Hopkins faculty in 1969, he was mentored about the system by Prof. Abel Wolman, Prof. John C. Geyer, Prof. Charles Renn, and Dr. F. Pierce Linaweaver, who later became Baltimore’s director of public works. He first surveyed the problems with Baltimore’s water and wastewater systems in an official capacity when he was a member of Governor Marvin Mandel’s Council of Economic Advisers (1976-1977). 

In addition to Prof. Hanke’s expertise on Baltimore’s system, he was a member of President Reagan’s Council of Economic Advisers (1981-1982), where he was responsible for the White House water resources portfolio. He has written and worked extensively in this sector, particularly with the large French water companies Compagnie Générale des Eaux, which is now Vivendi, and Lyonnaise des Eaux, now a subsidiary of Suez Environment, as well as with some of the large private water utilities in the United States. In addition to his work in France and the United States, he has worked on water resources in Argentina, Australia, Austria, Bulgaria, Canada, Indonesia, Israel, Poland, Sweden, and the United Kingdom.