Michigan needs at least $39.6 billion in one-time capital investment over the next 20 years — plus about $860 million a year in ongoing costs — to bring its water infrastructure to a state of good repair, according to a new report released by the University of Michigan Water Center in Ann Arbor and Public Sector Consultants in Lansing.
“Michigan’s Water Infrastructure Funding Gap: A Statewide Needs Assessment” compiles more than 60 reports, surveys, and analyses into the first statewide inventory of water funding needs organized around the One Water framework.
The framework treats water as one connected system from source to tap. It covers six categories: source water protection, private wells and septic systems, gray infrastructure, stormwater, water assistance, and dams.
“For years, Michigan has studied its water infrastructure one piece at a time: a federal survey for drinking water, a separate study for dams, a loose estimate for septic systems,” says Mike Shriberg, director of the U-M Water Center and a faculty member in U-M’s School for Environment and Sustainability.
“Putting those pieces together shows a need of at least $39.6 billion,” he says. “It also shines a spotlight on what we still don’t know. For example, no one has measured the condition of the private wells that about a million Michigan households drink from and no one has fully estimated source water and groundwater protection needs. Those blind spots, and others, are risks in their own right.”
Because of those blind spots, the true cost is higher, according to the report. No statewide assessment exists for the condition of private wells that serve about 1 million households, for most source water protection needs, or for flood mitigation and green stormwater infrastructure. Each would add to the total.
Furthermore, spending is not on pace to close the gap, according to the assessment. Spreading the one-time capital needed over 20 years, plus ongoing costs, Michigan would need about $2.8 billion a year. Michigan communities have historically invested about $1.14 billion a year, less than half the needed amount.
Through the Michigan Water Plan, the state has invested more than $3 billion in water infrastructure, but much of that rests on federal money from the Bipartisan Infrastructure Law and American Rescue Plan Act. Those funds need to be fully expended by Dec. 31.
“Recent investments have been historic, but they were built largely on one-time federal money,” says Maggie Pallone, senior vice president at PSC, a nonpartisan research and consulting firm. “Legislators from both parties are asking for help for their communities. The question now is whether Michigan plans for this investment or keeps paying for it one failure at a time at a much higher price.”
For example, at the current pace of the state’s Dam Risk Reduction Grant Program, it would take about 65 years to clear today’s dam repair backlog, without factoring in inflation or emergency repairs.
Water needs from the report include:
- Gray infrastructure: About $27.3 billion over 20 years: $16.26 billion for drinking water, about $9.1 billion for wastewater and about $1.96 billion to replace roughly 245,000 lead service lines.
- Stormwater: $6 billion over 20 years, a conservative figure as heavier storms drive repeated flood disasters.
- Private wells and septic systems: $2.2 billion to replace about 130,000 failing septic systems, $676 million a year for ongoing replacement and $600 million to test private wells for PFAS.
- Source water protection: About $2.5 billion to meet the state’s 500,000-acre wetland restoration goal.
- Dams: $980 million to rehabilitate Michigan’s assessed dams.
- Water assistance: $181 million a year to help about 395,000 qualifying households afford their water bills.
The Charles Stewart Mott Foundation funded the report to support a request from the Michigan State Senate Appropriations Committee for nonpartisan education, analysis, and recommendations on the state and condition of Michigan’s water infrastructure and related funding needs. The Mott Foundation says it supports and works with organizations in its hometown of Flint and communities around the world to promote a just, equitable and sustainable society.
“We hope this information helps spark a conversation about how our state can and must address water infrastructure needs,” says Ridgeway White, president and CEO of the Mott Foundation.
Demand for improvements is broad and bipartisan. For the FY 2027 budget, 78 of 148 legislators, from both parties and representing 42 of 83 counties, requested about $1.02 billion for 125 local water projects. Water system needs were the top requested item from local governments. The final budget funded $27.9 million, less than 3 percent of the amount requested.
To view the full study, visit here.
