Making the Case for a Sustained Federal Assistance Program: LIHWAP in Reading, PA

With our partners at the Water Center at Penn and the US Water Alliance, we are shining a critical spotlight on the local leaders advancing water affordability via our Water Wednesdays Community of Practice series. Learn more about how we’re supporting city leaders, and check out our resources for mayors new to this issue.

On March 29, the Mayors Innovation Project hosted a discussion about the critical need for sustained federal funding for water assistance programs, specifically the Low Income Household Water Assistance Program (LIHWAP), including a spotlight on LIHWAP successes in Reading, PA. 

LIHWAP was federally funded in 2021 through the Consolidated Appropriations Act and the American Rescue Plan Act. The program was allocated over $1 billion in emergency funding over two years to assist low-income households to pay drinking and wastewater bills. Each state disbursed funds differently, but most used existing local social services agencies to review and approve applications and then provided direct payments to utilities on behalf of approved households or to residents directly. In the latter case, local utility leaders supported state entities in identifying households needing support. 

By the end of 2022, the LIHWAP program provided assistance to over 400,000 households across the country.

This program has been particularly beneficial for communities like Reading, PA, which include a large number of low income households. Reading has a median household income of $38,738. The Reading Area Water Authority (RAWA) knew that this could be a one-time opportunity, not only to provide a bit of financial breathing room to households in their community, but for the agency to receive payments that would likely never be paid without the LIHWAP program. 

According to guest speaker Bill Murray, RAWA’s Executive Director, their team understood immediately that they needed to disburse funds as efficiently as possible. To do this they: 

  • Targeted households on a payment plan, because households facing a shut off would qualify for assistance.
  • Targeted properties with outstanding liens, as they would likely qualify for assistance. LIHWAP information was included in all lien warning letters. 
  • Sent LIHWAP program information to landlords and tenants.
  • Used a portion of recouped revenue to expand LIHWAP outreach. 

Overall, Reading allocated over $900,000 to 710 families in need, an accomplishment that surpassed those of even the largest cities in Pennsylvania. 

Unfortunately, states must obligate the current bucket of LIHWAP funds by September 30, 2023, and no funding is currently allocated to continue the program. As of April 2023, the Biden Administration’s proposed budget rolls LIHWAP into the Low Income Home Energy Assistance Program (LIHEAP), which would keep the program moving forward, but there is no guarantee that the proposal will survive the federal budgeting process.

If LIHWAP does end in 2023, what other strategies could the federal government consider to assist households in paying water bills? 

Eric Rothstein of the Galardi Rothstein Group joined us to help answer that question. Eric and a group of researchers completed a study to determine why sustained federal funding for household water assistance is needed and what a funding program might look like.

The study found that water and wastewater costs to households have far exceeded general inflation over the last two decades, leading to a disproportionate impact on lower-income families. Additionally, the majority of U.S. water utilities have between one and nine employees, a staffing constraint that would have a large impact on how a federally funded program would need to be structured. This combination of increased need and structural challenges requires developing a program that is efficient enough to meet the needs of both households and utilities. 

Eric discussed potential ways to structure a sustainable federal funding program, including:

  • Refining and expanding the current LIHWAP program;
  • Expanding the federal food program, SNAP, to allow participants to use SNAP benefits to pay water bills; and
  • Creating a new program funded by the U.S. Environmental Protection Agency, administered directly by local utilities or community organizations.

Each potential solution has benefits and limitations, but Bill and Eric helped demonstrate the impact that sustained federal funding for water assistance can have on families and the importance of finding a way to continue this support into the future.

To learn more about the success of LIHWAP in Reading and what a sustained federal assistance program could look like, you can view a recording of this webinar on our website, and be sure to join us for our next Community of Practice event on May 3!