Michigan Faces Trillion-Dollar Challenge to Update Water Infrastructure

U.S. and Michigan's Water Infrastructure at a Crossroads: Trillions Needed for Essential Upgrades

In an era where water security is paramount, the United States faces a daunting challenge: a staggering $3.4 trillion investment requirement over the next two decades to refurbish its aging water infrastructure. According to the Value of Water Campaign, this vast amount is essential to upgrade the nation's drinking water, wastewater, and stormwater systems, much of which were constructed four to five decades ago and are now deteriorating.

In Michigan, this issue is particularly pressing. The American Society of Civil Engineers has assigned the state poor grades for its water-related infrastructure: a D+ for drinking water, a D for stormwater management, and a C for wastewater systems in its 2023 assessment. While Michigan's wastewater infrastructure outperforms the national average, rated at a D, Jeff Johnston from the Michigan Department of Environment, Great Lakes, and Energy stressed the importance of further improvements. "Obviously though, we want to be better than a C, and we want to be doing the best we can," he stated, emphasizing the critical role of wastewater management in safeguarding public health and the environment.

To combat these issues, Michigan has embarked on multiple initiatives. Johnston highlighted a pressing need for nearly $6 billion in stormwater improvements, while the state has secured $907.4 million in loans from the Clean Water State Revolving Fund to develop municipal stormwater utilities throughout its communities. Currently, Ann Arbor remains the sole city with such a utility, a situation Johnston argues must change as climate change intensifies storms, leading to increased infrastructure strain.

Michigan's infrastructure issues are not just theoretical. In 2014, Flint's aging pipes resulted in lead contamination of its drinking water, endangering thousands. The state's response focused on removing and replacing lead lines, a high-priority initiative that saw 24,521 lines replaced in 2024 alone, according to Johnston.

The Environmental Protection Agency estimates $1.6 trillion is needed to overhaul the nation's drinking water systems, primarily for distribution and transmission improvements. However, this calculation excludes additional pressures such as the water demands of the growing AI industry. Data centers, for instance, consume up to five million gallons of water daily for cooling purposes. As Russell Whipple, mayor of Mason, Michigan, notes, the state offers attractive conditions for data centers due to its ample water supply, stable energy, and low disaster risk. Whipple cautions, "There are people who are very concerned about water since a data center could potentially use tons and tons of water, like hundreds of thousands to a million gallons a day."

Whipple highlighted ongoing studies in Mason examining the city's aquifer capacity to determine sustainable water use limits for potential data center developments. Such studies are critical as federal funding for water infrastructure, once over half of the federal budget in the 1980s, has dwindled to merely 8% by 2023, with states shouldering the remaining 92%, as reported by the Congressional Research Service.

Federal policies further threaten funding levels. The Trump administration's proposed 2026 budget suggests reducing federal water infrastructure funding from $2.76 billion to $305 million. If the Infrastructure Investment and Jobs Act is not reauthorized by September 2026, Michigan alone stands to lose around $286 million. Experts warn that states and local governments might need to bridge a $2 trillion gap if current funding shortfalls persist.

Meeting Michigan's infrastructure needs could yield significant economic benefits, including over 41,000 new jobs in construction, supply chain, and operational roles, according to the Value of Water Campaign.