Nearly all 2020 presidential candidates stress the importance of upgrading America’s water infrastructure. Yet, the question of how to finance these upgrades while protecting the most vulnerable from rate increases and shutoffs is just now coming into focus.
Pete Buttigieg, the Democratic mayor of South Bend, Indiana, released his infrastructure plan last month. Referencing a 2017 study, Buttigieg notes that “Water and wastewater services are unaffordable for nearly 14 million households, and this number could triple within five years,” based on the Environmental Protection Agency’s (EPA) affordability standard of 4.5% of household income.
In response, Buttigieg proposes a $16 billion, 10-year Drinking Water Assistance Fund (DWAF), which would “Lower water bills by an average of 50 percent – the equivalent of over $600 – for 10 million families.” The DWAF would be linked to the Low-Income Home Energy Assistance Program (LIHEAP), passed by Congress in 1981 to ensure low-income households have access to energy in the cold winter months.
Even though water, like energy, is a basic need, no such program exists for water. The DWAF would “provide a 1:3 federal funding match for states and local water systems that assist low-income families with water bill payments.” This plan would reverse the trend in federal spending on water, which has steadily declined in recent years.
Buttigieg’s plan is vague on the mechanics of the DWAF, though LIHEAP may provide some clues. LIHEAP assistance is available to families with income below 150% of the Federal Poverty Guidelines or 60% of the State Median Income. Funding is provided through federal block grants to states, on the condition that states then “give higher benefits to households with the greatest home energy need” based on household income and size. States can also choose to link LIHEAP benefits to Temporary Assistance for Needy Families (TANF) or Supplemental Nutrition Assistance Program (SNAP) benefits.
So far, Buttigieg has outlined the most specific strategy to protect water affordability. This may be informed by experience from his native South Bend. In June 2019, South Bend’s Common Council moved to impose an additional tax of $1.75 to fund discounts for low-income water utility customers. However, South Bend’s experience is far from unique.
Aging cities across the country face the question of how to repair crumbling water systems. In sum, the upgrades could cost hundreds of billions of dollars. Many Utilities are financing these fixes by increasing the rates customers pay for water. When customers fail to pay the higher bills, utilities may disconnect their service. However, shutoffs have proved an ineffective strategy to recover lost revenue. Utilities spend additional time and money enforcing shutoffs, while failing to extract money from low-income customers who simply cannot pay.
This has an immediate human cost, as customers must rely on expensive bottled water to bathe and cook. Shutoffs can also trigger longer-term troubles; for example, the absence of running water can provide basis for Child Protective Services to separate children from families. Likewise, public utility codes often specify that unpaid bills may be considered property liens, which cities can sell to private buyers through a tax sale. If customers fail to repay the debt over a given period, those private buyers may be able to foreclose on customers’ homes.
Baltimore, Philadelphia, Chicago, and Detroit have been particular flash points for these issues. Yet, this issue carries weight beyond the Rust Belt. A survey of each state’s two largest utilities found that as many as 15 million Americans experienced shutoffs in 2016, and the average utility enforced shutoffs on 5% of its customers. Tulsa, Oklahoma; Jacksonville, Florida; and New Orleans, Louisiana each experienced shutoff rates of more than 15%.
As candidates jockey for support in “swing states” like Pennsylvania, Illinois, and Michigan, might water affordability become a more prominent campaign issue?
Another Democratic contender, Rep. Tulsi Gabbard (HI – 02) has led a legislative push for affordability. Data from the Global Water Index shows that in Gabbard’s home state of Hawaii, Honolulu leads the nation in water rate increases, with rates increasing an average of 11.32% per year since 2011.
In 2018, Gabbard introduced H.R. 1673: the Water Affordability, Transparency, Equity, and Reliability (WATER) Act. This legislation proposed to provide $35 billion annually to the Drinking Water and Clean Water State Revolving Loan (SRF) programs. The act would require the Environmental Protection Agency to “study water affordability nationwide, including increases in such rates during the ten-year period preceding such study, and water service disconnections due to unpaid water service charges.”
The WATER act also frames the issue in terms of civil rights, directing EPA and the Department of Justice to study “discriminatory practices of water and sewer service providers.” Particular metrics would include “disparate effects, on the basis of race, gender, or socioeconomic status, of water service disconnections and the lack of public water service.”
Though the WATER Act stalled in committee, Sen. Bernie Sanders (D-VT) re-introduced the legislation in 2019 as S.B. 611. Sanders – another presidential candidate – also integrates these details in his Green New Deal platform.
The other Democratic candidates have each made more general references to water affordability, without detailing policy mechanisms. Sen. Elizabeth Warren (D-MA)’s infrastructure plan notes that “more and more Americans struggle to afford their water bills as water bill costs have risen at more than double the rate of inflation over the last 20 years.” Joe Biden’s plan promises increased federal support to states for water infrastructure, to focus “new funding on low-income rural, suburban, and urban areas that are struggling to replace pipes and treatment facilities.” Sen. Amy Klobuchar (D-MN) has stated her commitment to ensuring “low-income communities, communities of color, and rural communities have reliable access to safe and clean water.” Philanthropist Tom Steyer identifies “access to Clean Air and Clean Water” as one of the 5 Rights, though his campaign has not shared details on his plan.
On the Republican side, President Trump’s Legislative Outline for Rebuilding Infrastructure in America proposes increasing federal subsidies to state and local water systems, though it makes no reference to low-income access to water or affordability metrics.
The candidates’ attention water affordability is promising – yet, many facets of the issue remain under-developed in their platforms. In addition to climbing prices, leaky pipes can leave customers with enormous bills for water that they did not use. Deficient meters can inflate the amount customers owe. High interest rates and fees for re-connection compound the debts customers owe. Moreover, enforcement of shutoffs is not even-handed, and may take disproportionate tolls on minority communities.
As the 2020 campaign progresses, we’ll be watching closely to see how candidates’ platforms develop.