WATER

Why Michigan Needs Federal

Funding for Water Infrastructure
Fact Sheet • April 2009

O ur nation’s water infrastructure and economy are bound together. Aiding

the former will help the latter. Unfortunately, these days, both are treading
troubled waters.
In communities in Michigan and across the country,
drinking water and sewerage systems are straining under
the weight of decades of federal government underinvest-
ment. In recent years, the State Revolving Funds were
financed at some of the lowest levels in history. For fiscal
year 2008, Michigan received only $57 million, a mere
2.8 percent of the $2.1 billion that the state’s water and
sewer systems need.1

As the troubles with our water infrastructure mount, the

country’s economy slides deeper into recession. Michi-
gan’s January 2009 unemployment rate reached 11.6
percent, or about 565,000 people, up from 7.3 percent a
year earlier. One in nine people in the labor force are now
unemployed.2

Investing now in water and sewer systems to gener-

ate solid economic growth can lead the state out of the
recession. Every federal dollar invested in infrastructure
yields a $1.59 return to our states.3 The National Utility
Contractors Association estimates that for every $1 bil-
lion spent on water infrastructure, nearly 27,000 jobs are
created.4

The economic stimulus legislation passed by Congress in

February 2009 provides more money to water infrastruc-
ture than the country has seen in recent years, but this
one-time allotment cannot cure the problems plaguing
many communities. In fact, the bill provides water and
sewer systems with less than one-third of what the Envi-
ronmental Protection Agency estimates we should spend
each year just to maintain them.
Michigan’s Water Infrastructure Funding Gap:
Michigan’s water needs outpace its current ability to fund
projects by a large margin.
For the Drinking Water State Revolving Fund (SRF) pro-
gram, the state’s most recent Intended Use Plan lists 36
projects at a total cost of at least $186 million.5 In 2008,
the state received only $28.2 million in federal funding6
— enough to finance 15.2 percent of its needs.
Federal contributions to Michigan’s drinking water
funding efforts have decreased by 52.8 percent since the
Drinking Water SRF was implemented in fiscal 1997 and
64.8 percent when adjusted for inflation.7
For the Clean Water State Revolving Fund program,
which goes toward wastewater infrastructure, the state’s
most recent Intended Use Plan lists 72 projects at a total
cost of $1.9 billion.8 In 2008, the state received $29.3
million in federal funding9 — enough to finance 1.6 per-
cent of its needs.
Federal contributions to Michigan’s wastewater funding
efforts have decreased by 66.8 percent since the Clean
Water SRF was fully implemented in fiscal 1991 and 79.0
percent when adjusted for inflation.10
Job Creation: Fully addressing Michigan’s currently
listed water needs of $2.1 billion would spur 54,833
employment opportunities, according to National Utility
Contractors Association estimates for job creation from
water infrastructure investments. That could put back to
work one-tenth of the state’s unemployed people.
Water Quality: According to EPA’s 2006 National Wa-
ter Quality Inventory assessments, more than half of the
state’s river miles, lake waters and Great Lakes shorelines
are impaired, as are nearly all of its wetlands and Great
Lakes open waters.11
Beach Closings: A report by the Natural Resources
Defense Council shows that Michigan experienced 198
beach closing/advisory days lasting six weeks or less
in 2007, an increase of 60 percent from the number in
2006. Aging and poorly designed sewage and stormwater
systems cause many beach closures.12
Legislative Solutions: A comprehensive, long-term
solution is a dedicated source of public funding for water
infrastructure. This would help communities in Michi-
gan and across America keep their water clean, safe
and affordable. It would unburden overtaxed state and
municipal governments of the cost of water infrastructure
repairs. Such an investment also would create employ-
ment opportunities and give our economy a much-needed
boost. Two legislative solutions exist.
Clean Water Trust Fund: A federal water infra-
structure trust fund bill will be introduced during
the current legislative session. As with the trust fund
for highways and airports, we should have a Clean
Water Trust Fund to provide municipalities with the
funding they need to keep our water safe and clean
for future generations. The trust fund should distrib-
ute money to publicly owned water and wastewater
systems. It also should ensure that funds be made
available for research and implementation of green
infrastructure and conservation practices.
National Infrastructure Bank: Related to the
trust fund is a proposed national infrastructure
bank to raise and distribute the money necessary
to upgrade drinking water and wastewater systems,
highways and other underpinnings of our nation’s
prosperity. Policy-makers should strictly limit private
sector involvement in water infrastructure to financ-
ing only. The public should maintain ownership and
control of public water and sewer utilities because it
does a far better job of management and operation.
Endnotes
1 U.S. Environmental Protection Agency, Office of Water.
“Tentative distribution of Drinking Water State Revolving
Fund appropriation for fiscal year 2008.” May 19, 2008; U.S.
Environmental Protection Agency, Office of Water. “FY 2008
Clean Water State Revolving Fund Title VI Allotments.” January
28, 2008; Department of Environmental Quality, Environmental
Science and Services Division and Water Bureau. “Drinking
Water Revolving Fund Current PPL.” November 21, 2008 at 1;
Department of Environmental Quality, Environmental Science
and Services Division. “State Revolving Fund Current PPL.”
October 2, 2008 at 2.
2 United States Department of Labor, Bureau of Labor Statistics.
[Press Release]. “Regional and state employment and
unemployment: January 2009.” March 11, 2009.
3 Schwartz, Bernard L. and Schwenninger, Sherle R. “A Public
Infrastructure–-Led Economic Recovery Program.” December
4, 2008; Zandi, Mark. Chief economist and co-founder, Moody’s
Economy.com. Testimony on Economic Stimulus For Small
Business: A Look Back and Assessing Need For Additional Relief.
U.S. House Committee on Small Business. July 24, 2008.
4 National Utility Contractors Association. [Press Release]. “New
CWC Report Demonstrates Immediate Economic Impact of
Water/Wastewater Infrastructure Investment?” January 28,
2009.
5 Department of Environmental Quality, November 21, 2008 at 1.
6 U.S. Environmental Protection Agency, May 19, 2008.
7 Ibid; U.S. Environmental Protection Agency, Office of Water.
“Distribution of DWSRF funds.” June 23, 2006; Sahr, Robert C.
“Inflation conversion factors for years 1774 to estimated 2019.”
Oregon State University, Political Science Department. January
16, 2009.
8 Department of Environmental Quality, October 2, 2008 at 2.
9 U.S. Environmental Protection Agency, January 28, 2008.
10 Ibid; U.S. Environmental Protection Agency, Office of Water.
“Clean Water State Revolving Fund Allotments.” April 4, 2007;
Sahr, 2009.
11 , U.S. Environmental Protection Agency, Office of Water. National
Assessment Database. Available at www.epa.gov/waters/305b/,
accessed February 6, 2009.
12 Dorfman, Mark and Kristen Sinclair Rosselot. National Resources
Defense Council “Testing the Waters 2008: A Guide to Water
Quality at Vacation Beaches.” National Resources Defense
Council. 2008 at 76.
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