Report from the University of Michigan Water Center and Public Sector Consultants shows spending is far off pace, and the true need is higher because whole categories have never been measured.
ANN ARBOR and LANSING, Mich. — Michigan needs at least $39.6 billion in one-time capital investment over the next 20 years, plus approximately $860 million a year in ongoing costs, to bring its water infrastructure to a state of good repair, according to a new report released today by Public Sector Consultants and the University of Michigan Water Center.
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, which 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,” said Mike Shriberg, Director, University of Michigan Water Center and a faculty member in the School for Environment & Sustainability. “Putting those pieces together shows a need of at least $39.6 billion. 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 its own right.”
Spending is not on pace to close the gap. Spreading the one-time capital need over 20 years plus ongoing costs, Michigan needs about $2.8 billion a year. Michigan communities have historically invested about $1.14 billion a year, less than half that amount.
Through the MI Water Plan, the state has invested over $3 billion in water infrastructure, but much of it rests on federal Bipartisan Infrastructure Law and American Rescue Plan Act dollars. Funds that need to be fully expended by Dec. 31, 2026. The FY 2027 budget has just over $200 million for water infrastructure. 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, not factoring in inflation or emergency repairs.
“Recent investments have been historic, but they were built largely on one-time federal money,” said Maggie Pallone, senior vice president at PSC. “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.”
Water needs from the report:
Demand 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.
The true number is higher. No statewide assessment exists for the condition of the private wells that serve about 1 million households, for most source water protection needs, or for flood mitigation and green stormwater infrastructure. Each of those gaps would add to the total.
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.
“We hope this information helps spark a conversation about how our state can and must address water infrastructure needs,” said Ridgway White, Mott Foundation president and CEO.
The full report is available here.
About the University of Michigan Water Center
The University of Michigan addresses critical and emerging water resource challenges by fostering collaborative, user-driven research that informs policy and management decisions affecting our waters.
About Public Sector Consultants
Public Sector Consultants is a Lansing-based, nonpartisan research and consulting firm that helps public, nonprofit, and philanthropic clients make informed decisions on policy issues, including water, energy, health, and education. Learn more at publicsectorconsultants.com.
About the Charles Stewart Mott Foundation
Automotive pioneer Charles Stewart Mott established the private charitable foundation that bears his name in 1926 in Flint, Michigan. The Mott Foundation supports and works with organizations in its hometown of Flint and communities around the world to promote a just, equitable and sustainable society. It makes grants to nonprofit organizations working in four areas of interest: the Flint area, youth engagement, environment and civil society. In 2025, the Foundation made 396 grants totaling more than $161 million. For more information, visit mott.org.
Contact
Misty Elliott
Public Sector Consultants
517-896-1798
Mike Shriberg
University of Michigan Water Center
734-615-4216
