Reading between the (lead pipe allotment) numbers: 2024 version
A year ago when the second year state allotments for lead service line replacement (LSLR) funds from the Infrastructure Investment and Jobs Act (IIJA), also known as the Bipartisan Infrastructure Act (BIL), were announced, the Environmental Policy Innovation Center (EPIC) paid close attention, with both a blog and a memo analyzing how funding was being allotted to states and how far that funding would go. The May 2nd announcement by the White House and the US EPA with Federal Fiscal Year 2024 (FFY24) allotments - the third of five years of BIL LSLR funding - has us paying attention once again.
Since 2023, EPA has linked BIL LSLR funding allotments to survey data collected from states and water systems as part of the Drinking Water Infrastructure Needs Survey and Assessment or DWINSA. The lead service line data was included with the survey starting with the 7th DWINSA in 2023. These survey numbers on lead service lines are therefore really important, in their connection to what states will inevitably receive in BIL LSLR annual allotments.
In 2023, EPIC urged EPA to allow states and water systems to be able to update those surveys since they carry so much weight in the formula tied to the funding, and EPA allowed this in late 2023. We thank EPA for enabling these updates, because the numbers are so critical to the funding. According to the EPA, a total of 67% of the surveyed water systems provided a response to the update, which, along with the information from the 7th DWINSA, increased the overall response rate to 78%.
While we still don’t have the updated lead service line numbers from EPA, which EPA indicated in their memo would be released later, and we want to spend more time delving into the formula tied to these allocations and other implications over the coming weeks, we can learn a lot from simply looking at the allotment data that was released on May 2nd.
Whose allotments increased?
Everyone is a winner when we’re talking about millions of dollars in funding for lead service line replacement - none of which existed before BIL was passed under the Biden-Harris Administration in 2021. In this third round of funding, we see Illinois with the greatest allotment of $240,899,000, followed by Florida. We also see some numbers changing over time. In fact, we see 16 states receiving increased allotments from FFY23 to FFY24. The two states who saw the greatest increases, with over 100% increase in funding from FFY23 to FFY24: Minnesota from $37,896,000 in FFY23 to $86,566,000 in FFY24 (128% increase) and Georgia from $28,650,000 in FFY23 to $59,497,000 in FFY24 (close to 108% increase). Others also saw increased allotments from FFY23 to FFY24: Massachusetts (close to 49% increase) and New Jersey (over 48% increase), followed by Kentucky (22%), New York (close to 14%), and Ohio (over 10%) with Illinois, Maryland, Wisconsin, Iowa, Louisiana, Virginia, Indiana, Colorado, and Arkansas behind them. See Figures 1 and 2 below for a summary of the increasing allotments as well as Figures 5 and 6 for both increasing and decreased allotments.
Figure 1: Dollar Change in BIL LSLR Funds Allotted from FFY23 to FFY24: States with Increasing Allotments
Figure 2: Percent Change in BIL LSLR Funds Allotted from FFY23 to FFY24: States with Increasing Allotments
Whose allotments decreased?
We also see some states with decreased allotments from FFY23 to FFY24. In fact, nine states will receive a decreased allotment from FFY23. Texas sees the most notable decrease, from $146,246,000 in FFY23 to $28,650,000 in FFY24 (over 80% decrease), followed by Connecticut which was allotted $39,954,000 in FFY23 and is being allotted $28,650,000 in FFY24 (over 28% decrease). Others with decreased allotments between these two years include Michigan and Missouri with a 15% decrease each, North Carolina (almost 13% decrease), Florida (over 10% decrease - but with still a high allotment of $228,679,000, second only to Illinois with $240,899,000), Tennessee (over 5% decrease), and South Carolina and Pennsylvania (under 2% decrease). See Figures 3 and 4 below for a summary of the decreasing allotments as well as Figures 5 and 6 for both increasing and decreased allotments.
Figure 3: Dollar Change in BIL LSLR Funds Allotted from FFY23 to FFY24: States with Decreasing Allotments
Figure 4: Percent Change in BIL LSLR Funds Allotted from FFY23 to FFY24: States with Decreasing Allotments
Figure 5: Dollar Change in BIL LSLR Funds Allotted from FFY23 to FFY24: States with Increasing and Decreasing Allotments
Figure 6: Percent Change in BIL LSLR Funds Allotted from FFY23 to FFY24: States with Increasing and Decreasing Allotments
The majority of states saw no change
Many states - the majority in fact - saw a status quo from last year. Twenty-five states plus the District of Columbia and Puerto Rico received the minimum baseline allotment of $28,650,000. Under federal law, every state is entitled to receive a minimum of 1% of the funds to be allotted. Even if the updated numbers for these states changed, if application of the allotment formula results in less than a 1% allotment, it is automatically increased to reach the 1% threshold regardless of how many lead pipes are in the state. (Note: We did not create any figures with the states that saw a status quo.)
Additional policy wins in EPA’s memo
In a related EPA memo issued on May 1, 2024 from the EPA’s Office of Ground Water and Drinking Water, Implementing Lead Service Line Replacement Projects Funded by the Drinking Water State Revolving Fund, we see further clarification on several issues EPIC has advocated for and will continue to weigh in on in the weeks ahead:
Paying for private side replacement
EPA clarifies the issue of how to pay for private side replacement in its May 1st memo, pointing out that lead service lines are an eligible Drinking Water State Revolving Fund (DWSRF) expense. The memo also notes, however, that communities in some states still face challenges repaying DWSRF loans using ratepayer revenues. “Some states and localities might have perceived or actual constitutional, statutory, and/or regulatory barriers to using public water system user revenue to replace the customer-owned portion of a lead service line. Where they exist, such barriers may be especially burdensome for disadvantaged communities. In this scenario, states may use the DWSRF for service line inventories while working towards eliminating those barriers to LSLR. EPA strongly encourages states and localities to reassess, and if needed, eliminate state and locally imposed barriers to addressing the public health threat of lead in drinking water. States may use the DWSRF set-asides to provide technical assistance and other support to help communities overcome those barriers.” Several communities EPIC is working with have indicated that they perceive such barriers, and EPIC is planning more work to ensure this is clarified on a state-by-state basis, so that these barriers can be addressed.
Prioritization of vulnerable populations in early project phases
EPA states, “While planning LSLR programs, EPA encourages states and local governments to prioritize underserved and overburdened neighborhoods, including low-income homeowners and renters, for early phases of a project.” We think this is critical, and have been advocating in our hands-on work with partners like GHD, the Great Lakes and St. Lawrence Cities Initiative, and public water systems and in our public comments on the importance of equity and prioritization plans. We appreciate that this is explicitly called out in this EPA memo and will continue to advocate for water systems to adopt this practice to ensure greater equity.
Strategic use of set asides
Since the BIL funding came about in 2021, EPIC has argued at length for the strategic use of set asides for LSLR in blogs, reports, and other advocacy efforts. We are therefore thrilled to see a strong emphasis on set asides, which are mentioned 35 times in the May 1st memo. EPA encourages the “strategic” use of set asides for LSL inventory development and other “planning, design, and other pre-project costs.” EPIC will continue to analyze this memo and the guidance issued from EPA in the weeks ahead, but we are proud that our advocacy has paid off.
As we have said, there is a lot to read in the numbers and related announcements from May 1st and 2nd. We will continue to delve into the funding, guidance, and lead service line numbers in the weeks ahead and issue additional insights and commentary as our analysis develops. There is so much at stake and not a moment to lose to take full advantage of this unprecedented moment that the Biden-Harris Administration, the US EPA, and the US Congress has enabled to get the lead out across the country. EPIC - with our partners - is poised to help do this!
This quick analysis was prepared by the awesome Water Team at EPIC - namely Phil Cork, Maureen Cunningham, Janet Pritchard, and Denise Schmidt. Stay tuned for more analysis in the weeks ahead!