On May 15, the National League of Cities released its 2026 Municipal Infrastructure Conditions Survey,  Which compared priorities and conditions of entities between 2022 and now.

One of its major findings was that there has been a dramatic shift in the way communities are paying for their infrastructure. Back in 2022, the cities sampled reported that they were using a balanced mix of borrowing and own-source revenues. More recently, thanks to “fiscal caution and limited financing capacity,” according to the report, “today’s municipalities are increasingly relying on local cash-based funding.”

Certainly, federal investments have been helpful.  As the study explains “Cities report that federal grants have been particularly valuable for transportation and water infrastructure, aligning closely with major funding priorities of the Infrastructure Investment and Jobs Act.”

Although funding has improved cities’ ability to assess and understand needs,  it has “not eliminated underlying challenges.”  (See chart for a few concrete examples).”

An interesting observation in the report is how cities prioritize different areas for funding in 2026, which mirror the situation in 2022. “Cities continue to prioritize core systems that support daily operations and public safety, including streets, water, sewer and stormwater systems, and water treatment facilities. These assets consistently rank as top priorities, even as their conditions shift,” the report explains. “By contrast, public buildings, parking facilities, broadband and public transit remain lower priorities for many communities—reflecting longstanding local planning patterns.

The report presents a graphic that illustrates not only the funding priority level, but information about condition with parking lots in an “not satisfactory category” and public buildings just on the edge between “not satisfactory and fair.” 

While some areas examined are doing better, others, “were more frequently described as facing strain.” Based on self-reported data gleaned from a nationwide survey, “Waste systems saw A and B ratings move from 82 percent to 39 percent, while sewer and stormwater systems changed from 62 percent to 42 percent. Rather than reflecting a proven physical deterioration across all assets these substantial shifts likely reflect changes in perceived conditions due to the growing complexity of regulatory requirements, the high cost of underground infrastructure and the long timelines associated with utility upgrades,” the report noted.

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