A Florida TaxWatch report warns that the state could face a water shortage by 2025 due to rapid population growth and underfunded water infrastructure projects, potentially leading to economic setbacks and environmental degradation.

Florida could face a water shortage by 2025 due to rapid population growth and strained resources, according to a report published on Thursday by Florida TaxWatch.

The report warns of an “inferred water supply shortage” as early as next year, with the situation expected to worsen without immediate action. Florida’s population, projected to reach 26.4 million by 2040, is already testing the limits of the state’s water supply, the report claims, also suggesting that such a strain could lead to water use restrictions and rising utility bills, while industries like agriculture and tourism are likely to experience setbacks.

Agriculture, one of Florida’s largest industries, is particularly vulnerable. Cuts in water availability could threaten food production across the state, while tourism, another strong sector of Florida’s economy, faces similar risks. Water-dependent attractions, including theme parks, resorts, and golf courses, would likely suffer operational challenges under tighter water-use regulations. The report also notes potential environmental consequences, such as increased saltwater intrusion into freshwater sources and degradation of key ecosystems, particularly the Everglades.

“This projected shortage will have an impact on Florida households and the economy if it is not properly addressed,” the report says. “Florida will not be able to sustain this economic and population growth absent a consistent, comprehensive, and coordinated statewide strategy for funding water projects.”

Florida TaxWatch estimates that at least $1.7 billion will be needed by 2040 to fund necessary water infrastructure projects, though the figure does not account for additional costs related to stormwater and wastewater management or Everglades restoration, suggesting the total financial need could be much higher. Currently, just 40 percent of water projects have secured funding, leaving the remaining 60 percent dependent on local, regional, or federal sources.

The report criticizes the fragmented approach to funding water projects in the state, pointing out that in Florida’s 2024-25 budget, more than $410 million in water-related projects bypassed the usual vetting processes, with many of them labeled as “budget turkeys” by Florida TaxWatch.

“In the [state budget], there were 281 water-related member projects identified by Florida TaxWatch as budget ‘turkeys’ (totaling $410.3 million),” the report reads. “These 281 member projects did not go through one of the proper channels to receive funding. This circumvention of the budgeting process shows the need for a more comprehensive planning process to address these selection and funding issues.”

Florida’s continued economic growth, especially in high-growth areas like Miami, Orlando, and Tampa, is closely tied to the state’s ability to secure a sustainable water supply. Developers and urban planners are grappling with the challenge of balancing rapid growth with limited resources. Although water management districts are exploring alternative solutions like desalination and reclaimed water, these efforts are not yet widespread enough to meet the growing demand.

In the report, Florida TaxWatch recommends the state adopt a multi-year, statewide water management plan similar to its Five-Year Transportation Work Program, contending that such a plan would provide a structured framework for prioritizing and funding water projects, ensuring needs are addressed.

“To meet the growing demand for managing these resources, the Legislature should consider implementing a Five-Year Water Project Work Program, similar to the Florida Department of Transportation Five-Year Work Program,” the report states.

Legislative efforts are already underway to allocate more resources for water infrastructure. For example, 96 percent of the revenue from the Seminole gaming compact has been set aside for environmental and water-related initiatives. Despite these efforts, a looming water shortage could have far-reaching consequences for Florida’s agriculture, tourism, and environmental health. Without decisive action, Florida TaxWatch warns the impacts could be severe and long-lasting.