Before heading into the early July summer recess, the Michigan Legislature approved a balanced, bipartisan budget for the upcoming 2027 fiscal year. When it comes to water policy, there aren’t many surprises. In many ways, this is a status quo budget — it avoids some of the deep environmental cuts that had been proposed earlier this year, but it doesn’t make the kind of investments Michigan needs to protect our water for the long haul.
One of the biggest headlines is what appears to be a large cut to water infrastructure funding. However, much of that reduction reflects the expiration of one-time federal infrastructure dollars from the 2021 Infrastructure Investment and Jobs Act (IIJA) — not a decision by the state Legislature to eliminate water funding. Still, it’s a reminder that Michigan shouldn’t rely on temporary federal investments. Communities across the state continue to face enormous costs to repair aging drinking and waste water systems, replace lead service lines, and prepare for future challenges.
The budget also continues $5 million for water affordability assistance, and $5 million for weatherization to help families lower their utility bills. While every dollar helps, advocates have long pointed out that the need is much greater. The water affordability gap is estimated at $4.2 billion annually. For water infrastructure, the funding gap is greater than $1.1 billion annually. For wastewater, the gap is $18 billion over the next 20 years. As water rates continue to rise and infrastructure continues to age, too many Michigan families struggle to afford this basic necessity.
There are a few bright spots in the budget that reinvest in existing programs for homeowners and legacy contamination sites. The budget includes $5 million for Michigan Saves, which will help expand financing for home and business energy efficiency improvements while also making it easier for homeowners to repair or replace failing septic systems that threaten groundwater, lakes, and streams. This budget funds $217.9 million to clean up the 27,000 contaminated sites statewide (however, the Department of Environment, Great Lakes, and Energy (EGLE) previously estimated the cost of cleaning up orphaned contaminated sites at $13 billion). The budget also continues support for state park improvements, wetland restoration, fisheries infrastructure, and the Michigan Natural Resources Trust Fund, which funds land acquisition and outdoor recreation projects across the state.
Not every priority made it into the final budget. $300,000 of funding for Watershed Council grants was reduced and shifted from ongoing to one-time funding, creating more uncertainty for organizations working to protect local rivers, lakes, and streams. Ongoing funding for several environmental cleanup work projects, the Underground Storage Tank Cleanup Program, the Renew Michigan Program, and Remediation and Redevelopment Division work projects was also removed.
Overall, this year’s budget keeps many important water programs moving, but it also highlights how much work remains. Michigan’s water infrastructure is aging, many communities continue to struggle with affordability, and groundwater, rivers, and the Great Lakes all need sustained investment — not just one-time funding.
At Flow Water Advocates, we’ll continue advocating for the long-term policies and investments needed to protect Michigan’s waters for future generations. One such policy is the Michigan Water Trust Fund Act (MWTFA), which was introduced in the state Senate this past April. If passed, the MWTFA would collect a $0.25 per gallon royalty on the extraction of public groundwater or municipal water by bottled water companies, and create a dedicated fund to support water infrastructure and affordability to the tune of $300 million annually. Another legislative policy we are advocating for would establish a statewide septic code in Michigan for the first time. That bill has now advanced out of a Senate committee, and awaits a full vote. These important policies would generate a critical state funding stream to rebuild our aging water systems and address a major source of pollution to our waterways.
