Michigan lawmakers revive push for income-based water bills

LANSING, MI - As water rates rise across the state, Michigan lawmakers are trying again to make water bills more affordable for low-income residents by advancing a retooled plan.

On Tuesday, Nov. 4, the Senate housing committee advanced a nine-bill package, SBs 248 to 256, which would limit water and sewer bills for eligible households to about 2-3 percent of income and create a permanent fund financed by a $1.25 monthly meter charge.

Sen. Stephanie Chang, D-Detroit, the lead sponsor, said the plan reflects several years of negotiations with utilities, advocates, social-service agencies and lawmakers.

If enacted, Michigan would become the first state with a permanent, income-based water-rate system.

The bills create a tiered program at the state Department of Health and Human Services, which would administer a fund to reimburse utilities for lost revenue, forgive up to $3,000 in past-due bills, prevent shutoffs for the medically vulnerable and pay for minor plumbing fixes.

The retooled plan is similar to a 2024 version that stalled in lame duck. It includes revisions aimed at calming concerns from local utilities and Republican lawmakers. The original proposal called for a flat $2 monthly surcharge statewide. The new version starts lower and phases in 25-cent increases annually through 2029 before tying future adjustments to inflation. It also staggers implementation.

The monthly surcharge would generate about $71 million in its first 18 months and up to $90 million annually once fully phased in, according to a Senate fiscal analysis.

The package passed committee on bipartisan votes after an amendment by Sen. John Cherry, D-Flint, clarified that funding collected from regional systems would stay within the wholesaler's service area.

"Access to clean, affordable water is important for our public health," said Chang during a Oct. 28 committee hearing. "Every human being needs access to water, and water coming out of your tap should not depend on how much money you have."

Chang and other sponsors framed the plan as a response to steep water-rate inflation statewide. She cited data showing Michigan water bills have increased about 188 percent over the past few decades.

A Public Sector Consultants analysis found that roughly 371,000 households spend more than 3 percent of income on water and sewer service, with an average shortfall of $435 a year. Rates continue to rise faster than inflation as utilities contend with aging infrastructure.

The Great Lakes Water Authority, which serves most of metro Detroit, hiked water rates 5.9 percent and sewer rates 4.5 percent earlier this year to fund update projects and cover rising costs for treatment chemicals and building materials. It was the first time the regional authority raised rates above a 4 percent cap since it was formed following the city of Detroit's municipal bankruptcy in 2013.

State regions with the largest number of qualifying households include the Western Upper Peninsula, the Metro Detroit area, the Thumb and Flint and Saginaw areas, consultants testified.

"This isn't just a Detroit problem," testified Maggie Pallone of Public Sector Consultants. "This is an everywhere-in-the-state problem."

Committee Chair Jeff Irwin, D-Ann Arbor, said the legislation aligns with Michigan's broader push to treat water as a human right. Other parts of the package would decriminalize tampering with utility shutoff equipment in cases that don't result in damage.

"We don't want to waste additional public resources further immiserating clearly desperate people when there's a better way to deal with water shutoffs," said Irwin.

The plan mirrors the Michigan Energy Assistance Program (MEAP), which helps low-income residents with heating bills. It would build on previous supplemental legislative appropriations for water assistance.

Community-action agencies from across Michigan testified that water bill assistance now eclipses energy help as their top request.

Louis Pisker, CEO of the Wayne Metropolitan Community Action Agency said his organization has spent $75 million on water aid programs over the past three years. The agency received 55,000 calls for water assistance and 31,000 calls for energy assistance last year, he said.

"Water affordability has become the No. 1 request for help," Pisker testified. "Every day we hear from families who aren't just struggling with a bill - they're trying to stay in their homes, keep their water connected and maintain their dignity."

United Way of Genesee County CEO James Gaskin said his monthly bill tripled while living in Flint during the water crisis, when the water was undrinkable. He said water affordability is a struggle for seniors and those already struggling with rising food and shelter costs.

"While the legislature has advanced meaningful bipartisan efforts around water quality, this package will begin to address the equally important issue of water affordability," Gaskin said.

"These issues are intrinsically linked."

The bills now head to the Senate floor. The bills are tie-barred and all must pass for the package to take effect.

The Great Lakes Water Authority, Michigan Section of the American Water Works Association, United Way for Southeastern Michigan and Natural Resources Defense Council all submitted testimony supporting the plan.

Organizations formally opposed parts of the package include the Michigan Manufactured Housing Association, the Small Business Association of Michigan, the Detroit Regional Chamber and the Genesee County Drain Commission.