Moody’s Ratings combines global expertise and experience with tailored, local service to provide organization-specific insight and thought leadership on credit trends in the US public sector.
US Water and Sewer Enterprises: Data centers heighten water management risks for local governments
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Data centers are driving growth in water demand across the US, making water management considerations increasingly important for the credit profile of municipal water and sewer utilities.
The outlook for US states is stable for 2026, supported by modest tax revenue and economic growth. State tax revenue will grow by about 2.3%, broadly in line with inflation, allowing most states to maintain current services and operations with modest budgetary adjustments. While the outlook is stable, several potentially credit negative trends are emerging.
The outlook for US cities and counties is stable over the next 12 months with operating revenue growth likely to slow to historical norms, but still match easing inflation. Healthy underlying economies supported by record high home prices and a stable employment market provide the foundation for modest tax revenue growth through 2026.
According to our fiscal 2023 and preliminary fiscal 20241 median data, US cities and counties continued to experience improvements in full value per capita, revenue and available reserves, supported by property value appreciation and federal pandemic relief aid.
K-12 public school districts' fund balances hit a plateau in fiscal year 1 2023 as they absorbed rising costs, spent down federal pandemic aid and continued to have strong revenue growth from other sources. An increase in property tax revenue, robust state funding, along with some residual federal aid related to the pandemic, supported revenue growth.
The potential for material investment losses stands as the top pension risk in 2025 for state and local governments. The present value of unfunded pension liabilities has steadily declined since 2020, driven primarily by higher interest rates, and governments have broadly improved or at least maintained the strength of their annual contributions.
The immediate growth and employment impacts of the Eaton and Palisades wildfires, the second-most destructive in California 's (Aa2 stable) history, are likely to be modest as reconstruction and cleanup efforts, insurance payouts and federal disaster aid help to compensate for temporary losses in economic activity and taxable value.
The COVID-19 pandemic sparked a surge of changes for traditional US K-12 school districts adding volatility to what had previously been a very stable sector.
Moody's US Public Finance in Focus is the place to get regular event updates on municipal credit risks and trends.
Moody’s Ratings methodologies are developed to reflect the unique intricacies of the public sector entities.
Our analysts seek to engage in ongoing dialogue through the entire rating process and leverage their expertise in the US public sector.
Lloyd Pepperl
Managing Director
Head of Relationship Management
Alex Greenwald
Senior Vice President
Business Development
Northeast
Pat Sandercock
Vice President
Business Development
Midwest
Shamba Sandy
Vice President
Business Development
Southeast
Michael Garcia
Vice President
Business Development
Southwest
Edna Mariñelarena
Vice President
Business Development
West
Averi Isaacs
Senior Associate
Business Development
Southwest & West
Lily Cochran
Senior Associate
Business Development
Northeast
Lloyd Pepperl
Managing Director
Head of Relationship Management
Phyllis Richardson
Senior Vice President
Head of Account Management
Michelle Landolfi
Vice President
Account Management
States, High Profil and Muni Public Infrastructure
Alex Epelboym
Vice President
Account Management
Housing & Municipal Supported Products
Edgardo (Gary) Venturanza Jr.
Assistant Vice President
Account Management
Higher Education, Healthcare & Charter Schools
Paul Spadaccini
Assistant Vice President
Account Management
Northeast & Southwest Local Governments
Omar Ortiz Lopez
Manager
Account Management
Southeast Local Governments
Max Cuomo
Manager
Account Management
Midwest & West Local Governments
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