Using ARPA Funding to Ensure Baltimore’s Water Affordability

For years, Baltimores have faced a water affordability crisis of increasing scale and severity. The 10% annual rate hike combined with the devastating economic impact of the COVID-19 pandemic has left many people unable to afford the most basic resource — water. But last month, our city took a big step towards water justice with the launch of the Water4All affordability program. We applaud Mayor Brandon Scott for his leadership in making this amazing and historic progress possible, but work remains to ensure equitable access to water for all.

This project, the result of years of grassroots organizing efforts in our city, is a game-changer for Baltimores who have long struggled with unaffordable water bills. The Water4All program ensures permanently affordable water bills for our city’s low-income households by limiting water bills to internationally recognized affordable water service standards (no more than 3% of household income). Water4All also creates a pathway out of water debt, ensuring no one is left behind. Tenants, who make up nearly 53 percent of Baltimore’s residents, will receive water assistance for the first time in the city’s history. Families are encouraged to apply by April 1, 2022 to receive the retroactive credit.

Water4All isn’t just a game-changer for low-income families in our city; it’s a win for everyone. When people have bills they can pay, they pay. Paying the bills means upgrading our water infrastructure for all of us. Research shows that percentage-of-income affordability programs like Baltimore significantly increase collection rates. This will support the fiscal health of the Department of Public Works, ensuring the agency is raising the funds needed for necessary infrastructure upgrades.

While percent-of-income affordability programs have been used by gas and electric companies for decades, Baltimore is a leader in people-focused water solutions and is the second city in the country to create such a water program. Our city shows that city water departments everywhere can and should provide equitable water affordability programs that meet the needs of their households and ensure equitable access to water services for everyone.

While the launch of the program is a big step forward, there is still more work to be done. Just as community engagement is central to the design and adoption of the program, public scrutiny will also help manage its implementation. For now, implementation issues could jeopardize some of the benefits low-wealth tenants should be able to reap from the scheme. Currently, under the Department of Public Works plan, residents renting behind a central water meter will be issued a prepaid card that automatically loads credits each month to provide water affordability assistance – a good idea. Less importantly, these residents also have to pay taxes on this assistance.

It is fundamentally wrong for someone to have to pay a tax on water provided to make their water bills affordable. Including this aid as income would inevitably complicate tax filing and could even put people over the income threshold of other aid programs.

These impacts can be devastating, with dire consequences for the most vulnerable in our cities – but there is a solution. Baltimore has $641 million in American Rescue Program Act (ARPA) funding to be allocated. The federal government has provided support to cities like ours to mitigate the economic impact of the COVID-19 pandemic and can be explicitly used to help pay utility bills. What’s more, the IRS has issued clear guidance that ARPA funds paid directly to households for water and other utility assistance will not be taxed.

By allocating just $3 million in federal funding (less than 1% of Baltimore’s ARPA allocation) for water affordability, we can ensure that Baltimore’s low-income tenants have access to truly affordable water service without additional costs financial insecurity. Other communities from Buffalo to San Antonio and Phoenix are already using their ARPA funds to improve water affordability. Baltimore must follow suit.

The launch of Baltimore’s Water4All program is a success story of building water justice from the ground up. Baltimores from all walks of life are pulling together to fight for equitable access to affordable water services that keep people safe and healthy without breaking the bank. Now, it’s up to Mayor Scott to make sure our goals are implemented in this plan. Mayor Scott must act to ensure that this water affordability program actually helps and not hurts those who need it most by directing ARPA funds to those who need it.

Rianna Eckel is the Baltimore Water Organizer, part of Food & Water Watch, a national environmental advocacy group. Amy Hennen is Director of Advocacy and Financial Stability at the Maryland Volunteer Lawyers Service. Jaime Lee is an associate professor and director of the Community Development Clinic at the University of Baltimore Law School. Ms. Lee and Ms. Hennen are both members of the Baltimore Water Rights Coalition, led by Ms. Eckel.

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