Feb 7, 2024 - News

Michigan Democrats push for $2 fee to address water affordability

Public officials at a press conference to discuss water affordability legislation.

Sen. Stephanie Chang (D-Detroit) is one of the lead sponsors on the Senate package to help fund a new water affordability program. Photo: Samuel Robinson/Axios

Southeast Michigan Democrats are continuing their push for legislation to add fees on some water bills in order to protect other households at risk of shutoffs.

Why it matters: Lawmakers and advocates argue the program — which sponsors say would be the first of its kind in the country — would help low-income residents across the state.

Details: The proposal would add a $2 monthly fee to most water bills to fund a $70 million water affordability program within the Michigan Department of Health and Human Services.

  • For eligible families at or below 200% of the federal poverty limit, the program would cap water bills at no more than 3% of household income — or $51,640 for a three-person household in 2024.
  • Low-income households with water leak issues would also be eligible for plumbing repairs up to $2,500.

Of note: Water providers could opt to use the state program or administer their own.

What they're saying: "Water affordability is essentially a human right — creating programs that continue that idea is going to benefit many people in need," Wayne County deputy executive Assad Turfe said at a Monday press conference in Royal Oak.

  • "This isn't an Oakland/Macomb/Wayne issue, this can benefit any community across the state," Oakland County executive David Coulter added.

The other side: Opponents in Macomb County have said forcing residents to pay an additional $24 per year is an unfair tax to finance those not paying their bills.

Catch up quick: Metro Detroit officials have been pushing for a universal water affordability plan with a long-term funding source for years.

  • Wayne County households currently have access to water affordability programs such as Lifeline Plan and WRAP, "but we know neither of those programs have the financial stability that they need going forward," Sen. Stephanie Chang (D-Detroit) tells Axios.
  • "I think in the past we didn't necessarily have providers and advocates working together, but this term we brought them together, plus MDHHS and environmental stakeholders."
  • It took a work group of stakeholders about eight months last year to land on a solution everyone could agree on, Chang said.

Between the lines: When customers don't pay their bill, current law allows utilities to put liens on property, file lawsuits against customers or shut off their water.

  • Those aren't effective collection tools, Gary Brown, director of Detroit's Water and Sewage Department, wrote to legislators in support of the bills last fall.
  • Ultimately, the only way to recover that revenue is to place it on the books as a bad debt expense, then raise water rates accordingly the next year to recover the loss.

What's next: The proposal is a priority for Southeast Michigan Democrats, but most legislative action has come to a halt while the House remains in a 54-54 tie.

  • While lawmakers heard testimony about the proposal in the fall, it hasn't been brought to either chamber floor for a vote.
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