Helping People Pay Their Sky-High Water Bills Is a SNAP | Opinion

Everything is more expensive these days—even tap water.

U.S. water utility prices have been rising faster than general inflation, driven in large part by a need to replace and update aging infrastructure. New regulations to remove "forever chemicals" from drinking water will surely drive costs even higher. Although these investments are needed, low-income households can struggle to afford this essential service. That concern propelled Congress to introduce the first federal Low Income Household Water Assistance Program (LIHWAP) in 2020. Administered by the U.S. Department of Health and Human Services (HHS), LIHWAP was an emergency measure to aid a nation reeling from COVID-19. The program is set to expire at the end of this year, and some in Congress are calling to make LIHWAP a permanent, ongoing program.

Before making LIHWAP a permanent part of America's alphabet soup of anti-poverty programs, we ought to consider a simpler approach to water assistance: allowing participants in the Supplemental Nutritional Assistance Program (SNAP, formerly known as Food Stamps) to use SNAP benefits to pay for their water bills.

As it turns out, SNAP dollars are already paying for water. A 2016 study found that roughly 1.2 percent of SNAP expenditures go toward bottled water—that's more than $1.9 billion a year. In practice, then, the federal government already has a permanent low-income water assistance program, but those federal funds turn into cases of Aquafina, Dasani, and Ozarka instead of water utility services.

SNAP's origins trace back to the Food Stamps program that was part of Franklin Roosevelt's New Deal. Income-qualified individuals and families were issued coupons that could be exchanged for approved grocery items. The program is administered by the U.S. Department of Agriculture (USDA) in cooperation with state agencies.

In the 1990s, the USDA stopped issuing paper coupons, renamed the program SNAP, and began providing benefits through electronic benefit transfer (EBT) cards. Eligible households receive EBTs loaded with benefits each month to buy a wide range of food items. In 2022, SNAP provided about $159 billion in benefits to people with incomes below 130 percent of the federal poverty rate. With low administrative costs and a strong return on social investment, the program is one of America's most successful federal anti-poverty programs.

Rather than extending the cumbersome and complex water specific LIHWAP indefinitely, Uncle Sam could channel water assistance dollars into SNAP and allow participants to pay for their water bills with their EBT cards.

A simple change to this year's Farm Bill could make water bills eligible for payment through SNAP. There are good reasons to think that doing so will result in federal water assistance with dramatically higher participation, much wider reach, and with far greater administrative efficiency than a permanent LIHWAP.

Reliable LIHWAP participation rates aren't available, but the Low Income Home Energy Assistance Program (LIHEAP) is a good indicator. After 40 years of operation, the energy assistance program has an average participation rate of just 16 percent of its eligible population. A recent review of assistance programs run by the nation's largest water utilities finds similarly low participation. By contrast, SNAP achieves a remarkable 82 percent participation by eligible households. Extending SNAP benefits to water would immediately help the 41 million people already enrolled in the program—without any of them having to apply or be screened for participation in yet another assistance program.

Providing federal water assistance through SNAP also would help "hard-to-reach" people who rely on private wells, or who pay for their water utilities through their rent or homeowners dues. SNAP solves that longstanding water assistance problem: participants who pay their own water bills could use their EBT cards to pay the bill; those who pay for water through their rent could use an increased benefit associated with water assistance to pay for food.

Administrative efficiency and simplicity are among SNAP's greatest advantages. About 94 percent of SNAP's costs are benefits delivered to low-income families, with just 6 percent spent on administration. That's far more efficient than the 15 percent administrative cost built into LIHWAP, which requires a complex set of agreements involving HHS, state agencies, and thousands of water utilities. Extending SNAP benefits to water bills would be a simple matter of adding water utilities as approved vendors in each state. Utilities could then accept EBT payments directly from customers without a need for additional documentation. These processes take far less time and effort than LIHWAP's cumbersome administrative procedures.

Some utility managers may argue for a permanent LIHWAP because it sends funds directly to utilities, not people. That way, utilities can control funds, tie them to specific bills, and ensure that water assistance funds aren't spent on other things. Such an arrangement works for big utilities that have the staff to run a social welfare program, and gives them political cover for unpopular rate increases. But extending SNAP to water bills empowers consumers, and helps water assistance reach small, rural communities—not just big cities and suburbs.

If Congress wants to provide the most water affordability relief to the most people at the lowest cost, then "SNAP H₂O" is a more promising path than a permanent new program and the bureaucracy that goes with it. Federal taxpayers are already spending nearly $2 billion a year on bottled water through SNAP. Expanding the program's scope to water bills can help families in need—and send some of those dollars to community water systems instead of bottled water companies.

Manuel P. Teodoro is an associate professor at the La Follette School of Public Affairs at the University of Wisconsin-Madison. Teodoro studies water sector management, regulation, and finance.

The views expressed in this article are the writer's own.