Low-income water assistance program set to end

More Americans, and particularly more children, are living in poverty today as crucial assistance programs created during the pandemic disappear, a U.S. Census report noted last week.

Now, another assistance program is set to go away. In a week and a half, on Sept. 30, a program that has helped more than a million people pay their water bills will expire unless Congress acts to reauthorize it.

Since its inception in 2020, the Low Income Household Water Assistance Program, or LIHWAP, has distributed about $1.1 billion to states, who pass the money on to water utilities to help pay the bills of people making 150 percent of the federal poverty line, or $37,290 for a family of three. In the fiscal year ending September 30, 2022, the program kept 228,000 from losing service and helped restore service to about 30,000 households who had had their water shut off. 

Concerning water agencies is the fact that the program will end at a time when, according to census data, poverty is up from 7.8% in 2021 to 12.4% last year, the nation’s first increase since 2010. The Census attributed the rise in poverty to the end of expanded pandemic benefits for food, rent and unemployment. With the end of the expanded child tax credits as well, the percentage of children living in poverty doubled from 5.2% to 12.4 %.

For households that were dependent on those programs, said Nathan Gardner-Andrews, chief advocacy officer for the National Association of Clean Water Agencies, “it can be a double or triple whammy.”

As budget talks to avert a government shutdown are underway, Gardner-Andrews says he does not expect Congress to renew the program. Neither of the spending bills passed by the House or Senate appropriations committees contained funding to keep the program going.

“In terms of new funding, it's nothing that Congress is talking about,” Gardner-Andrews said.

Under the deal President Joe Biden and Republican House Speaker Kevin McCarthy struck in June to prevent the nation from defaulting on its debt, the two sides agreed to keep federal spending levels the same as last year, which means no funding to continue LIHWAP. Senate Democrats are proposing to make good on that deal, though they are pushing for extra funding. House Republicans, meanwhile, are pushing to actually reduce federal spending.

While funding will dry up at the end of the month, HHS said that states with funding left over can continue to provide assistance for a few more months.

Water utilities contacted by Route Fifty said they are hoping low-income progams they’ve created will help, but acknowledge it isn’t enough to cover the loss in federal assistance.

In Seattle, where the cost of living has been rapidly increasing, the utility department will continue cutting water and electric bills by half for people who make 70% of the state median income, or $66,696 for a family of three. But those people will have to pay their half of the bill when the state runs out of the $20 million in subsidies left over from LIHWAP.

“If you are making 150% of the federal poverty level and you're living in the Seattle area with our cost of living, then having somebody help pay down your water utility bill is a huge deal,” said Susan Saffery, the director of government relations and legislative affairs for Seattle Public Utilities. “We won't have the money to fill that gap. So despite our really good utility discount program and our emergency assistance, we will still have people struggling to pay their bills.”

Mae Stevens, chief executive officer of the American Business Water Coalition, argues that continuing assistance would help local economies. 

“If people are having trouble paying their water bills, then they're not spending money on groceries,” she said. “They're not able to spend money on other things in the local community.” 

In addition, Stevens said that as utilities pay to offer help to low-income people, the cost is being passed on to their other customers. ”They are paying to cover for the person who can't pay their bills, which is a nice thing to do, but also puts a strain on their budgets,” she said.

Jay Bernas, general manager of HRSD, which provides wastewater services to 1.9 million residents in southeastern Virginia’s Hampton Roads area, lamented the end of assistance. He said it was a “great program,” particularly at a time when utilities around the country are raising water and wastewater rates.

“Regulations are increasing,” he said. “There’s PFAS [or forever chemicals in our water]. Our infrastructure is aging. So rates are going up, and who gets negatively impacted, lower income folks.”

HRSD will allow people to go on payment plans to keep from having their water shut off, but it is limited in what it can do as Virginia law bars utilities from reducing rates for lower-income people.

“To be able to say, ‘Hey, there's this program out there that you might qualify for that can help you with your bill,’ it was such a feel good thing,” he said. “We were able to have a solution for them, instead of saying, ‘There's nothing we can do. If you don't pay your bill, we're going to shut off your water.’”

A major help for utilities in Virginia, Bernas said, was that the state’s Department of Social Services partnered with the software company, Promise, to contact those receiving other assistance like food stamps, Temporary Assistance for Needy Families and disability payments to sign them up for the water program.    

“This dramatically streamlined most applications because for applicants who were categorically eligible, they didn't need to provide documentation proving their eligibility or income. All of that could be verified automatically in state databases,” sad Daniel Mintz, Promise’s head of solutions engineering.

Like Bernas, Kelly Caplan says the program has been a “lifeline” for low-income families in Maryland's Montgomery and Prince George’s counties outside Washington, D.C. said, 

For the more than 4,000 households who have had $4.6 million of their bills paid by the federal government, “it has stopped many customers from having their water turned off,” said Caplan, manager of the Washington Suburban Sanitary Commission utility’s customer engagement and advocacy department. “If somebody has had their water turned off, it has allowed them to get it turned back on. It's very important because water is essential to life, right?”

Caplan also said it will be doing all it can to help low-income households deal with the end of the federal assistance, including allowing customers to go on payment plans and waiving fees for low-income customers.

According to a press release, when the agency resumed shutting off water to households that were behind on their bills, it allowed 700 to be on an amnesty program in which they could have their late fees and 10% of their bill waived if they paid the amount they owned in full. They could also have fees and a portion of their bill waived if they repaid what they owed in six months.

One city that has been preparing for the end of the program is Detroit.

Since July 2022, the city has been basing rates under the Detroit Water and Sewerage Department (DWSD) Lifeline Plan on income. Eighty six percent of of those in the program make less than 135% of the federal poverty level—or $30,630 for a year for a family of three—and are charged only $18 a month for water, sewer and stormwater.

Gary Brown, director of the Detroit Water and Sewerage Department, said the city is hoping the Michigan Legislature will pass a proposal by Democratic state Sen. Stephanie Chang that would provide funding to limit monthly water bills to 3% of a household's income.

But as it now stands, the state’s funding for Detroit’s lifeline program will run out in 2025.