Baltimore’s sewer rates are rising again, yet utility revenue has lagged projections amid billing and cost pressures

Rising charges collide with revenue headwinds

Baltimore residents have faced years of increasing water and wastewater charges, driven by the cost of maintaining an aging system and meeting regulatory requirements. Yet higher rates have not guaranteed that utility finances perform as planned. City budget and billing records show that reported revenue has at times fallen short of expectations, reflecting a mix of collection challenges, accounting corrections, and the growing expense of running and rebuilding the system.

How Baltimore’s sewer charges have climbed

City utility rates include fixed infrastructure charges, volumetric charges based on consumption, and additional line items such as stormwater fees and the Bay Restoration Fee. For several years, Baltimore operated under a multi-year schedule of annual increases approved in 2022, including a 3.5% yearly rise for wastewater rates from fiscal 2023 through fiscal 2025. Under that schedule, a typical household bill for combined services was about $130 per month in fiscal 2025, reflecting gradual annual adjustments.

In late 2024 and early 2025, the city moved to a new multi-year adjustment plan. The Board of Estimates approved a package that increased water rates and sharply raised sewer rates, with changes scheduled to take effect beginning February 1, 2025 and with additional steps planned for July 1, 2025 and July 1, 2026. The city has framed these increases as part of a broader effort to stabilize utility finances and fund capital work.

Why revenue can still come in below plan

Utility systems are funded largely through user charges, but revenue performance depends on more than rate levels. Key factors include the accuracy and timing of billing, collection rates, consumption trends, and whether costs—such as labor, chemicals, electricity, and debt service—rise faster than projected.

City financial reviews have also highlighted the impact of billing system reconciliation issues. In fiscal 2023 and fiscal 2024, Baltimore recorded roughly $12 million in previously unbilled water charges tied to city accounts after reconciliation work was completed. Those late entries altered how surpluses and shortfalls appeared during closeout, illustrating how billing execution can materially change reported results even without changes to the underlying rate structure.

Capital needs and compliance obligations remain central

Baltimore’s water and wastewater infrastructure requires sustained investment to reduce sewer overflows, modernize treatment and pumping operations, and replace aging pipes and related assets. The city has described a multi-year capital improvement plan measured in the billions, and Maryland has separately approved major funding for Baltimore water infrastructure projects aimed at pollution reduction and system modernization.

• Rates are set to generate funds for operations, debt service, and capital investment.
• Revenue may underperform projections if billing, collections, or consumption trends deviate from assumptions.
• Late accounting entries and reconciliation work can shift the timing of recognized revenue and expenses.

The central challenge for Baltimore’s utility system is aligning predictable revenue with volatile costs and long-term infrastructure requirements, while maintaining accurate, timely billing and equitable access to essential services.

As new rate schedules take effect, the city’s financial outcomes will depend not only on the increases themselves, but also on whether administrative fixes, collection performance, and cost controls keep pace with the scale of required infrastructure investment.