Legislation introduced by Democratic lawmakers this week would tie water bills to income and add new shutoff protections in Michigan. A statewide Low-Income Water Affordability fund, which would cost ratepayers $2 per month, would help fund the program.
The bills have broad support from local elected officials and activists, but may face a hard road should the balance of power shift in Lansing. And some activists say that even more is needed to protect the state’s most vulnerable residents.
Several advocates told Planet Detroit that the bills as drafted could still allow utilities to undermine the income-based rates included in the legislation and that shutoff protections may not go far enough to protect vulnerable residents.
The legislation comes after decades of lobbying by activists for a comprehensive solution to water affordability and to stop shutoffs to low-income residents who can’t afford their bills.
“This was a long fight for many of us working as advocates and impacted residents,” said Sylvia Orduño, an organizer with the Michigan Welfare Rights Organization, who noted the legislation marks a significant step forward.
Supporters say it’s needed to provide water service to the state’s poorest residents and preserve public health. Sen. Stephanie Chang (D-Detroit), who led a workgroup over seven months to craft the legislation, said the bill is about providing the basics of life to all residents.
“We are the Great Lakes State, surrounded by fresh water, but many Michiganders do not have the same access to water due to their financial situation,” she said in a press release. “It should not matter how much money you have — every human being needs water to live.”
What the bills would do
A bill introduced by Sen. Chang would establish a water affordability program housed within the Michigan Department of Health and Human Services and create income-based caps for water bills.
Households with incomes at or below 135% of the federal poverty level would have their bills limited to 2% of their income, while those with incomes between 136% and 200% would have a cap of 3%. This cap would cover the whole water bill, including sewerage and drainage charges.
Participating utilities would have some flexibility in how they administer programs and could add income tiers but would have to do so within the parameters of the state program. The state would reimburse participating water utilities for the difference between the cost of service and what they charge through income-based rates. Enrolled customers could have at least $1,500 in past due bills erased over two years and secure up to $2,500 in plumbing repairs.
Jeremy Orr, director of litigation and advocacy partnerships for the nonprofit Earthjustice, said these caps generally align with what’s commonly considered an “affordable” water rate.
A separate bill introduced by Rep. Rosemary Bayer (D-West Bloomfield) creates a fund for the program, charging water customers a $2 monthly fee – similar to what gas and electric customers pay for the Michigan Energy Assistance Program, which helps low-income customers with energy bills.
Additional bills introduced by Chang and Rep. Abraham Aiyash (D-Hamtramck) add water shutoff protections. These would require a utility disconnecting service to notify a customer four times by mail, door-knocking, phone call and/or text message. The bill protects customers with certain health conditions from having their water shut off and those attempting to enroll in an affordability program or who have made minimum payments.
Other bills would allow tenants to transfer bills into their own name and change the penalty for those who reconnect their own water following a shutoff due to financial hardship from a five-year felony to a civil infraction.
A long road to water affordability
Orduño noted that utilities and government officials denied the severity of the problem for years, blaming low-income customers for failing to pay their bills even as Detroit cut off water to 144,000 households between 2014 and 2019 and United Nations experts called such actions “contrary to human rights.”
But she said the pandemic was a “watershed moment,” leading people to think more about the connections between clean drinking water access and public health. In March 2020, Gov. Gretchen Whitmer issued an executive order to restore service, legislators passed a temporary moratorium on shutoffs, and the federal CARES Act provided support for water customers.
That laid the groundwork for a seven-month process involving a workgroup of lawmakers, community representatives, water utilities and environmental organizations to craft the legislation introduced this week.
The bills introduced by eight Michigan House and Senate Democrats on Monday have the support of Detroit Mayor Mike Duggan, Oakland County Water Resources Commissioner Jim Nash, and Detroit Water and Sewerage Department director Gary Brown. Macomb County Public Works Commissioner Candice Miller, however, has challenged the legislation.
Chang said that Michigan would be the first state to secure such protections for residents if the bills pass. She said the legislation could help stabilize water systems, potentially allowing them to reinvest in their infrastructure and refrain from raising rates.
A recent University of Michigan report found the cost of water increased by 188% in Michigan between 1980 and 2018. Majority-Black Flint and Detroit were hit especially hard, with increases of 320% and 285%, although suburban and rural areas also saw significant rate hikes.
“During COVID, there were over 317,000 Michiganders that were behind on their water bills,” Chang said. “Hopefully, things are much better now. But there’s still a lot of families that are struggling.”
Concerns remain
Monica Lewis-Patrick, co-founder of water affordability advocacy group We the People of Detroit, praised Chang’s years of work on water affordability and said the laws were a good start. But she voiced concern that “a lot of wiggle room” remains for utilities to undermine the legislation’s intent should it pass.
Lewis-Patrick said she believes the $2 monthly charges will prove insufficient to fund the program as costs continue to mount for water systems dealing with debt, aging stormwater infrastructure, and PFAS contamination. She said the proposed charges are based on what residents will likely accept rather than the program’s funding needs.
“We’re dealing with what is politically digestible, as opposed to the reality that our communities are in,” she said.
If the legislation is adopted, a task force comprising water utility representatives, advocates and other groups will work with MDHHS and the Michigan Department of Treasury to implement and run the program. Lewis-Patrick voiced concern that rising costs could result in the task force seeking to increase the income rate caps for enrolled households.
She also said the shutoff protection bill would still allow utilities to disconnect service to low-income households for nonpayment and that ambiguous language in that bill could fail to prevent shutoffs for many people with serious health issues. She would like to see a shutoff moratorium until the legislation is adopted.
Chang sought to allay some of Lewis-Patrick’s concerns, noting that if the treasury found there wasn’t enough money for the program, plumbing repairs and forgiving arrearages would be the first things to lose funding, with changes to the income caps for low-income ratepayers considered as a last resort.
“We would protect the lowest income tier as much as possible,” she said. “That would be the priority.”
Chang said a lack of flexibility in administering the program could lead to higher rates for all customers. She said the state program could also take money from other sources, including the federal government.
Of course, resolving such concerns becomes an issue only if the law is passed. If two House Democrats running in mayoral races win their elections in November, it would create a tie in the chamber and potentially make passing legislation more difficult for Democrats.
Meanwhile, Miller challenged the legislation last week calling for a provision to allow communities to opt out of the $2 monthly charge.
“Most of our folks are members of the Great Lakes Water Authority, and we are already paying for something called the WRAP program, which is the Water Residential Assistance Program,” Miller told Michigan Radio. WRAP is a two-year program that helps low-income households with water bills, arrearages, plumbing repairs and other assistance.
Orduño criticizes the short-term nature of programs like WRAP and the burden placed on residents forced to navigate them.
Chang pointed out that Macomb County is not exempt from water affordability issues.
“In my own district in the city of Warren… there were over 2,800 Warren residents who were behind on their water bills,” she told the Detroit News. “There are a significant number of Macomb County households who are behind on bills and are below 200% of the federal poverty level.”
Orr noted that he expects hearings in coming months, which could give residents and decision-makers a chance to weigh in. He said he believes the legislation should be viewed as a framework that stakeholders can build on.
“It feels like a sweet spot where we can establish some grounding for how we do water,” Orr said. He added that he would also like to see a permanent moratorium on shutoffs. “But I also realize…that these are thoughtful protections that will go a long way in protecting the most vulnerable populations.”