Legal Pathways to Income-Based Drinking Water Rates in Michigan

As the COVID-19 pandemic has made it clear that water shut-offs are a threat to public health, a new report by the National Wildlife Federation and the Great Lakes Environmental Law Center debunks the theory that Michigan law forbids water utilities from offering flexible payment structures, which would prevent the most vulnerable residents from losing access to drinking water.

Water rates for people in Michigan and in communities across the country have skyrocketed over the last 10 years—in large part due to plummeting federal investment in water infrastructure that has left local communities on the hook for operating, maintaining, and updating expensive water distribution systems. In recent years, thousands of Michigan residents have had their water shut off, because they have not been able to afford their water bills. Cities like Flint and Detroit have some of the highest water rates in the nation. Detroit’s water rates have doubled over the last decade.

Yet, as the report makes clear, local utilities in Michigan already have legal authority to provide rate flexibility to people with less income—thereby ensuring water access without widespread water shutoffs.

Water shutoffs in Michigan disproportionately impact communities of color and low-income families. And the problem is becoming more pervasive. A Michigan State University study estimates that, by 2022, for more than 35 percent of people in the United States will have trouble paying their water bills if water bills continue to increase as projected.

The new report, “Legal Pathways to Income-Based Drinking Water Rates in Michigan,” finds state law provides broad latitude for water utilities—and indeed a wide variety of government service providers, from water distribution to trash collection—to offer flexible rate structures to help ensure that services are affordable. Several local utilities in Michigan already offer reduced rates for older residents, as well as (in a few cases) people with lower household incomes. The latter approach, in which people with less money or who are experiencing economic hardship pay lower rates, has been implemented in cities such as Philadelphia, Pa.

Read the press release here.