Water Leaders Discuss the Future of Federal Funding for Water Assistance

By Erica DePalma, Program Manager

May 3, 2024

On average, 20 percent of households are in debt to their water utility—a startling statistic shared last month by the US Department of Health and Human Services (HHS) during Water Week in Washington, DC.

In 2021, Congress approved $1.1 billion for HHS to establish the first national water assistance program in history—the Low-Income Household Water Assistance Program (LIHWAP). The program ended at the end of March, so on April 10, leaders gathered at the America’s Water Affordability forum in Washington, DC, to discuss successes and needs moving forward.

At the forum, Senator Alex Padilla (D-CA) shared that households at 75 percent of federal poverty level across the country often spend up to 40 percent of their income on water and sewer bills. Megan Meadows, a forum speaker, highlighted that households with higher incomes may still spend up to 15 percent of their income on water and sewer bills.

Why is this significant? Financial experts suggest that households should spend 50 percent of their net income toward essential needs including living expenses, food, heat, transportation, medicine, and water. With water costs rising, households are at risk of making impossible decisions: to pay for water or food; water or heat; or water or medicine.

Households at 75 percent of federal poverty level across the country often spend up to 40 percent of their income on water and sewer bills.

Both costs and needs are rising. With aging infrastructure and increasing costs to comply with new water regulations, such as PFAS drinking water standards, local water utilities must invest in advanced treatment technologies and capital projects to provide clean, safe drinking water and treat wastewater for their communities. However, with less than five percent of funding from federal sources, the burden to pay falls on local ratepayers.

To meet regulations and deliver high-quality services, water rates are rising three times faster than the rate of inflation and more than both energy and medical bills combined in the United States. If more local ratepayers are unable to pay their bills, the main revenue source for our nation’s water systems will be at risk.

During the Water Week forum, Kishia Powell, CEO of WSSC Water discussed that the stakes couldn’t be higher. She noted that continued disinvestment in the water sector would risk widespread system failure and threats to public health, economic justice, and equitable access to basic needs.

In two years, LIHWAP helped 1.6 million households across the United States retain access to water services. In Louisville, Kentucky, water utility staff and partners distributed four million of LIHWAP assistance in just three weeks. Tony Parrott, Chief Executive Officer of Louisville and Jefferson County Metropolitan Sewer District shared that strong partnerships were necessary to distribute the funds and support as many households as possible in accessing relief.

In two years, LIHWAP helped 1.6 million households across the United States retain access to water services.

Though the pilot program has ended, the widespread need for a permanent federal program persists. Parrott shared that a recent affordability study in Louisville found that the city will need $10 million in assistance per year to support struggling households pay their water bills. Without LIHWAP, Parrott is unsure where those funds will come from. Louisville is just one of many cities across the country that need continued federal funding for water assistance and investment in critical infrastructure.

Earlier this year, Senator Padilla introduced a bill to create a permanent, national water assistance program called the LIHWAP Establishment Act. The act would authorize grants to assist low-income households in paying arrearages and other water rates, provide technical assistance to underserved public water systems or treatment works, and align income eligibility with other assistance programs limiting administrative burdens.

130 organizations nationwide have endorsed the LIHWAP Establishment Act and have called for permanent federal water bill assistance. The question remains: will Congress act to guarantee all Americans can afford life’s most essential resource?

The time is now to ensure affordable access to water for all.  