Baltimore Needs Income-Based Water Service Billing

Baltimore provides a good illustration of the challenges facing many city water systems across the country. Here, every thunderstorm seems to bring another sewer overflow, with sewage backups flooding basements and water main breaks creating traffic jams. The city had nearly 800 water main breaks last year, which was, astonishingly, a big improvement over previous years.

Baltimore plans to spend $2 billion on improvements to its water and sewer systems over the next six years. These worthwhile projects should bring good union jobs to city residents while helping make our drinking water safe and our waterways clean.

But, how do we make these important investments and keep service affordable? A quarter of Baltimore residents live in poverty, and the median household income is little more than half (56 percent) of the statewide median.

All in all, water and sewer rates have more than tripled since 2000. Now, the city plans another 31 percent increase, but, as detailed below, because of new fees and cuts to assistance, many low-income seniors could see much worse. For many, water bills could double within the next three years.

Increasing the burden on low-income households and seniors

Baltimore’s Department of Public Works has proposed increasing water and sewer rates by 9.4 percent a year for a cumulative hike of 31 percent by July 2018. The city isn’t just raising rates; it is also changing how it charges for service. It is adding new fixed fees, eliminating the minimum usage standard and restructuring the volumetric water charge. As a result of these changes, the burden of the increase won’t be equally shared.

One thing is clear: This rate hike is going fall hardest on low-income residents and seniors.

Households that don’t use much water will see larger increases in their water bills. For typical houses with 5/8-inch water meters, households that use about half as much as typical will see a total increase of 55 percent, or an increase of $235 annually, by July 2018. Meanwhile, households that use twice as much as typical will see their bills drop by 9 percent this October, and see a cumulative increase of just 9 percent, or $161 a year, by July 2018.

As a result, many low-income households will see larger hikes in their bills. Low-income households typically use less water overall than wealthier customers with big houses and big lawns. For example, an analysis of water use and income in Los Angeles found, “…on average, wealthier neighborhoods consume three times more water than less affluent ones.” Meanwhile, Baltimore will increase its existing low-income assistance by a mere $18 a year per household. That is a drop in the bucket, relative to the total increase that these households face.

What’s worse, the city is actually cutting back its discount for low-income seniors. The existing discount of 43 percent will not apply to the new fixed charges. As a result, many lower-income seniors will see larger percent increases in their bills. For example, low-income seniors with low water use will see their water bills double by July 2018. Because they live on fixed incomes, seniors are very vulnerable to such rate increases.

It is downright shameful for Baltimore to disproportionately hike water bills for low-income residents and seniors. Baltimore needs a more equitable rate structure that does not penalize water-efficient customers, overburden low-income households and jeopardize the health of senior citizens.

The epidemic of water shutoffs

As local governments, including Baltimore’s, make billions of dollars of necessary updates to aging water and sewer systems, they face a simultaneously daunting challenge: water service affordability. The federal support that once helped fund major investments in our clean water infrastructure has largely dried up, and without a renewed federal commitment, cities are left to figure out how to provide safe water without pricing their residents out of service.

This problem becomes especially complex in this period of widening income inequality and reliance on regressive water billing practices. Low-income households pay a disproportionate amount of their income on their water bills. The consequences are playing out in communities across the country, from Philadelphia to Detroit, and from San Diego to Baltimore: widespread water shutoffs. 

Last year, Baltimore shut off water service to more than 8,000 households, affecting an estimated 20,000 people, many of whom could likely not afford to pay the ever-increasing rates. This year so far, the city has cut off 965 customers and restored service to only 189 customers. Without running water, people cannot cook and clean, wash their hands or flush their toilets. Unaffordable water bills can even lead to evictions.

Access to water is a fundamental human right, and to have that right, people must be able to afford service charges. The United Nations has determined that for water and sewer service to be considered affordable, water and sewer bills must not consume more than 3 percent of a household’s income. Our analysis from last April found that in Baltimore, typical water and sewer bills were already unaffordable for more than a third of households.

In absence of a robust water affordability program, more and more working families, seniors and other low-income households will be unable to pay their bills and will face having their water service cut off or losing their homes.

A comprehensive solution

 Baltimore needs a comprehensive solution for unaffordable water bills. It is unlikely that any rate structure in itself can make water service affordable for everyone in the city. That’s because there are too many factors that contribute to basic essential water use such as how many people live in your home; how old your home is; how old or leaky your toilets, fixtures and appliances are; and whether you have a dishwasher or washing machine at home. Accounting for all these variables in rates would be administratively cumbersome and would ultimately fail to ensure that every household can afford its water bills.

An income-based water affordability program is a real solution that would ensure that every household would pay water bills that they could afford. Last year, the Philadelphia city council unanimously adopted an ordinance to set up such a program. Baltimore needs to follow Philadelphia’s lead and act now.

We need our water and sewer department to be well-funded to make the investments necessary to provide safe and reliable water, but we also need to make sure that this service is accessible and affordable for everyone in the city. Universal access to safe water is essential for public health, community wellbeing and basic human dignity.

Baltimore should reject the proposed rate changes until it implements a comprehensive income-based water affordability program.