Sharp increases in the price of tap water have pushed some of Baltimore’s poorest residents far beyond their ability to pay their bills, an independent economist has concluded.
As more and more people can’t afford to pay, the city could find itself in a “downward spiral,” forced to impose larger and larger price increases to pay for court-ordered infrastructure upgrades, economist Roger Colton said.
“Even though Baltimore is raising its water and sewer rates, it’s also seeing this incredibly high increase in the amount of money that it’s not collecting from its billing,” Colton said.
Advocates for poor Baltimore residents, who commissioned the study, say the findings boost the case for the City Council to take up a sweeping water affordability package. The proposal would cap bills for low-income households at an affordable proportion of their income.
The idea is to protect the poor from losing their homes, which can be at risk if they fall behind on their bills and end up in the city’s tax sale system. It also could bring the city more revenue by issuing bills customers can afford.
Council President Bernard C. “Jack” Young’s office has been considering such a legislative step. He said earlier this year a bill was likely to be introduced in the later summer or fall. But nothing has been proposed publicly, and the advocates say the head of the Department of Public Works told them in October he is firmly opposed to the idea.
Lester Davis, a spokesman for Young, said the plan still was being hammered out. He pointed out that Young had a track record of helping people facing high water bills, and was supportive of the advocates’ favored solution.
“Baltimore is going to be one of the national leaders in this arena,” Young said.
Rudy Chow, the city’s Director of Public Works, said he didn’t recall telling the activists he was opposed to changing the billing system.
“I wouldn’t say flat-out opposed,” he said. “We’ve got to make sure the revenue coming in meets the needs of our citizens. It’s not something we just say go ahead and legislate and just fix this …
“It comes down to money. It really comes to down money.”
Chow said his department is considering ways to improve existing programs, including discounts for seniors and help for people who fall behind on their bills. The Baltimore Sun found that thousands of people are missing out on aid that is available to them under those programs. The city has set a goal of doubling enrollment.
The water department is in a difficult spot. It is borrowing money to pay for pipe and sewer upgrades, and has to pay off those loans using revenue from water customers.
“The city of Baltimore does not have the discretion not to make these investments,” Colton wrote in a 109-page report released last week. “However, and it is a huge ‘however,’ the need to make the investments does not make the ability-to-pay of Baltimore customers any greater.”
Colton, a Boston-based economic consultant who has studied utilities around the country, used the city’s census tracts to estimate how much residents at different income levels in different areas would pay for water bills in coming years.
By looking at census tracts rather than the city as a whole, he was able to identify the most vulnerable households.
In 8 percent of the city’s census tracts, the poorest fifth of households face water bills costing more than 20 percent of their income, Colton estimated. In a quarter of the tracts, the poorest fifth face bills amounting to between 10 and 20 percent of their income.
By 2019, Colton concluded, water won’t be affordable for households making 150 percent of the federal poverty rate, which is $36,450 for a family of four. A third of city households make that much or less.
Colton defined affordability as a household paying less than 2 percent of it’s income for water. The federal Environmental Protection Agency uses a threshold of 4.5 percent.
Mary Grant, an advocate with Food and Water Watch, an environmental group that asked Colton to conduct the study, said the report paints a “really dire picture.”
“People just genuinely can't afford to pay ever-increasing water rates,” she said.
Grant and other activists are pushing for a program that would cap water bills for low-income households at a proportion of the customer’s income.
Colton said economic research and studies of similar discount systems suggest that if people receive bills that they can pay, they will do so.
While the idea has been applied to other utilities, it is untested when it comes to charging for water. Philadelphia became the first city to implement such an approach earlier this year.
Grant said Chow told activists at an October meeting with the groups that he was completely opposed to the idea.
“He said, I think this is a direct quote, he doesn’t want anything legislated on him,” Grant said.
Zafar Shah, an attorney with the Public Justice Center who supports the affordability plan, was also at the meeting. He said public works staff wanted time to see how the program works out in Philadelphia.
“This is kind of the usual with DPW, just a reluctance to change administratively for whatever reason and they've found a good one,” Shah said. “I think there’s some credence to wanting to see whether a new model works.”
Councilman Bill Henry, who has been working closely with the activists on the legislation, said negotiations over its language could help secure the support of Chow and his department.
Chow said he wouldn’t be opposed to anything that could make water more affordable, but he had yet to see any results from Philadelphia.
Ultimately, he said, it’s up to the council.
“That’s something they will have to wrestle with,” he said. “My job is to make sure I do my job to bring clean drinking water and take away wastewater for our citizens.”