Michigan taps funding sources to support water infrastructure

There’s a rising stream of support in Michigan for water infrastructure.

“Few things are more important to our households and businesses than clean drinking water, surface water, and groundwater,” said Gov. Gretchen Whitmer. “I’m pleased to work with the Legislature and all partners to keep investments flowing to strengthen Michigan’s vital water infrastructure and support a healthy and prosperous future.”

The bipartisan 2023 state budget, passed July 1 for the fiscal year that begins Oct. 1, includes $48 million in technical assistance that can help communities apply for funds to replace lead water lines or other water infrastructure, and $7.9 million for drinking water permitting, both through the Michigan Department of Environment, Great Lakes, and Energy (EGLE).

And the annual budget is only part of the picture. Here are other major current sources of water infrastructure funding and financing:

MI Clean Water Plan: Gov. Whitmer’s bipartisan plan from 2020 has announced 169 awards totaling $124 million to support water infrastructure needs in communities all over Michigan. Some programs begun under the plan will continue through the Building Michigan Together Plan (described below), with more grants expected to be finalized by early fall. All told, MI Clean Water directed $102.1 million in federal funds to replace lead service lines in low-income communities and $105 million for general fund programs that address PFAS or other contaminants, lead service line identification, planning and rate studies, and asset management plan development.

Building Michigan Together Plan: On March 30, 2022, Gov. Whitmer signed into law the nearly $5 billion bipartisan plan also known as Public Act 53. The state’s largest-ever investment in infrastructure rebuilding includes more than $1.9 billion for water improvements, $1.26 billion of that in the form of federal American Rescue Plan Act funds allocated over fiscal years 2023-24 to the state revolving funds for drinking water and wastewater (see below). Building Michigan Together also promises to create up to 27,000 jobs through at least $341 million to replace 20,000 lead water service lines, including 100% of lead service lines in Benton Harbor. Also in the plan:

• $40.5 million to help communities tackle toxic contaminants such as PFAS in drinking water and wastewater. That includes $18 million for the Consolidation and Contamination Risk Reduction grant program, $8.5 million of which is earmarked for Oscoda, a PFAS hotspot near the former Wurtsmith Air Force Base.
• $20 million for the Drinking Water Asset Management grant program to help drinking water suppliers develop and update asset management plans and take stock of materials in their distribution systems, such as lead service lines.

State revolving funds: The Drinking Water State Revolving Fund offers low-interest loans for 20, 30, or 40 years to help eligible water suppliers with projects to satisfy requirements of the federal Safe Drinking Water Act. Loan funds available for fiscal year 2023 projects total $256.5 million, with $91 million in the form of loan principal forgiveness. The Clean Water State Revolving Fund offers similar low-interest loans to help qualified local municipalities build needed facilities for water pollution control. The fund will provide $881 million in financing for 2023, $68.3 million as loan principal forgiveness.

EGLE has regulatory oversight for all public water supplies in Michigan, including approximately 1,400 community water supplies and 10,000 noncommunity water supplies. The department also regulates the water well drilling industry, investigates drinking water well contamination, and oversees remedial activities at sites where groundwater contamination affects drinking water wells. Michigan has nearly 1.12 million households served by private wells, with approximately 15,000 domestic wells drilled each year.

EGLE invests more than half of its budget in Michigan communities in the form of financial assistance to address water infrastructure and other efforts to protect the environment and public health. Learn about funding opportunities for Michigan communities or see an interactive grants and loans dashboard on the department’s Grants and Financing webpage.

Caption: Drinking water construction project by Lansing Board of Water and Light in 2021.