Baltimore’s ongoing water and sewer rate hikes are fast becoming too expensive for most of the city, according to a new report by an independent economist.
The city needs money to pay for federally mandated fixes to its ancient sewer system, so it’s has implemented a system of raising rates by about 10 percent for water and 9 percent for sewer from 2016 through at least 2019. Unfortunately, the math isn’t that simple for most household budgets, argues Roger Colton.
The Boston-based economist found by analyzing the city’s census tracts that water unaffordability — already a problem for a third of households under international standards before the rate hikes took effect – has been exacerbated to a point where it’s depriving the city of revenue simply because many can no longer afford their bills.
At median income levels relative to a resident’s neighborhood, two-thirds of the city was able to afford water and sewer bills in 2016. By 2019, that share will drop to “more than half,” Colton wrote – and that doesn’t even include those who make far below median income.
This poses a major problem, since around one in four Baltimoreans lives at or below the poverty line. Those people already couldn’t pay their bills, and will be even less able as rates keep rising, which translates to even more missed revenue. In this process, those residents who don’t pay will have their water shut off and, at worst, have their homes sold at tax lien sales.
It’s a dismal spiral even just for the city government, according to Colton.
“Baltimore is impeding its own progress in seeking to generate funding for current and future investments in its water and wastewater infrastructure in the manner in which it is now proceeding,” he wrote. “As bills become more and more unaffordable, the City realizes less and less cash from each rate increase. As the City collects less and less money, it is forced to raise rates even higher to replace the funds not collected.”
Colton authored the report for the nonprofit Food and Water Watch. Local lawmakers have been working with them and other affordable water advocates on a fix that would ease the burden for low-income dwellers.
The argument is that by making their bills proportionate to their income, those residents could at least pay them and put some money into the city’s coffers for infrastructure upgrades, instead of deepening the debt. The magic rate for “affordable,” Colton wrote, is 2 percent of household income.
Philadelphia implemented such a program in 2015, the first of its kind in the country. In addition to making bills scaled to residents’ earnings, it also lets them earn forgiveness or pre-existing debt under previously unaffordable rates.
Council President Jack Young said in a statement that he’s “leading an effort to introduce legislation that would make water affordable for our city’s most vulnerable.” Councilman Bill Henry is also working on the issue.
The Baltimore City Department of Public Works is exploring ways to improve affordability within the current rate structure, said spokesman Jeffrey Raymond in an email.
“Just this morning Director Chow met with a group of advocates for low-income residents as part of an ongoing discussion of the Baltimore City Department of Public Works’ assistance and outreach efforts,” he said.
Rudy Chow, DPW’s director, has also met with federal officials on the matter of affordability, and the department has been invited to apply for $200 million in federal infrastructure funding to lessen the burden, he said.
Chow was quoted in Colton’s report from his correspondence with Del. Mary Washington. Washington asked him for water billing data in August. He responded by telling her, essentially, that the city doesn’t keep track of how much it collects in residential payments, the age, size or distribution of individual billing debts, the average amount owed before water is shut off or how many payment plans have been initiated, among other data.
The Abell Foundation noted in its 2016 report, “Keeping the Water On,” that the city does offer some assistance to low-income residents or those who fall behind on their bills, including annual credits for very low-income delinquent customers, a 43 percent discount for seniors with a household income of $30,000 or less, rain-tax exemptions for those facing financial hardship and payment plans.
But the report noted the credit isn’t rising proportionately with water and sewer rates, and that payment plans aren’t based on income. As soon as a family misses a payment, their water can be shut off.
This story has been updated with comment from the Baltimore City Department of Public Works.
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