The purpose of this report is to examine trends in local government spending on public water and wastewater services and infrastructure to determine the level of resources devoted to these functions; and to project what the likely spending requirements will be over the next 20 years (2009 to 2028). The report also reviews how various federal government agencies provide?nancial assistance for public water and wastewater systems, and suggests some broad goals for renewing the intergovernmental commitment to sustainable water and wastewater services and infrastructure. Like many other forms of public infrastructure in America, water and wastewater suffer from the lack of a coordinated and integrated National Strategy. Rather than providing leadership, Congress and the federal government have essentially abandoned providing meaningful?nancial assistance to local government, but have, instead, authorized and implemented a costly and increasing wave of mandates. The mandates lack prioritization based on comparative risk; and are not coordinated to match compliance phase-in with the ability of local government to?nance improvements. Instead, the wave of mandates is forcing local government onto a spending treadmill where ever-growing annual investments may not be suf?cient to guarantee safe, affordable and adequate supplies and services or comply with law in the 21st century. Current federal policy fails to target?nancial assistance to the very metro- urban areas that the national economy depends on for employment and wealth creation. One of the biggest impediments to renewing our national public water and waste- water infrastructure is the lack of precision in our understanding of who is paying how much for what; and how much total investment needs will be in the near future. This has resulted in a vague and false con?dence among Congress that they have already addressed the issue by granting $60 billion to cities over two decades ago to build water infrastructure when the cost in a single year (2008) is over $40 billion in capital investments and another $50 billion for operations and maintenance. A more thorough understanding of how much is spent on public water and wastewater is a necessary?rst step in establishing a framework for a National Strategy. A National Strategy requires an accurate accounting of what percent of societal resources are now devoted to public water and wastewater; as well as how much of societal resources will be required in the future. Like any 'public good' issue, scarce resources should be targeted according to carefully thought out priorities (are we spending money on the right things?) and a recognition of the real limits of local government?nancial capabilities.