Minnesota's lead-pipe program faces 2027 funding cliff without new state investment

Minnesota cities and advocacy groups are pressing the state Legislature for $250 million to keep the state’s lead service line replacement program running beyond 2027, when both state and federal dollars supporting the effort are projected to run out. The state has allocated $243 million for lead pipe removal since 2023 and drawn roughly $350 million from the federal Infrastructure Investment and Jobs Act, but neither funding stream extends past 2027 without fresh appropriations.

“The program would just fall off a cliff without continuing investment in it,” said Elizabeth Wefel, a lobbyist with the Coalition of Greater Minnesota Cities. “We’ve got programs that are set up or getting set up and we need to continue that momentum.”

Minnesota set a 2033 goal for removing all lead service lines — four years ahead of the federal deadline of 2037 established under a Biden-era mandate that the Trump administration has said it intends to uphold. The state’s ambition is now at risk absent new funding.

Scale of the problem

There are upward of 87,000 known lead service lines in need of replacement across Minnesota, and the actual figure is almost certainly higher because thousands of lines remain unidentified, according to the coalition. The state Department of Health and the Public Facilities Authority jointly administer the Lead Service Line Replacement Program, allocating funding to cities.

This year, the Public Facilities Authority tallied 221 projects requesting $428 million in replacement funding, according to a report submitted to the Legislature. The agency estimated the total cost to replace all lead service lines in the state at $1.5 billion.

Cities face an unusual financing obstacle. Many lead service lines run under private property, which means they generally cannot be funded through general obligation bonds the way public infrastructure such as wastewater plants typically can. Funding must instead flow through federal or state appropriations, loan and grant programs, and other mechanisms.

New Ulm Mayor Kathleen Backer said the cost to replace at least 317 lines in her city ranges from $12,000 to $25,000 per line.

“Our local residents or property owners aren’t able to take on that burden of replacement of the lead lines,” she said.

Cities across the state face exposure

The challenge stretches from Greater Minnesota to the Twin Cities metro area. Moorhead water plant manager Marc Pritchard said state funding is essential to keep his city’s decade-long replacement project on track. Moorhead’s lead line share is about 2%, amounting to roughly 20 to 30 replacements per year.

“The state funding is absolutely crucial for success,” Pritchard said. “For other cities within Minnesota that have a lot higher percentage of lead service lines, they’d be in a tough spot too.”

The situation is more acute in St. Paul, where about 18% of Regional Water Services properties had lead lines. The utility set a goal to replace 2,100 lines in 2026 alone. Duluth faces what may be the largest undertaking in Greater Minnesota, with more than 7,000 lines still in need of replacement; Mayor Roger Reinert highlighted the city’s $63 million award from the Public Facilities Authority last year.

Funding gap and the 2026 session

Minnesota began capping award amounts to cities last year because available funding was insufficient to meet requests, Wefel said. Gov. Tim Walz’s budget proposal sets aside $7 million in general funds directly for the lead line replacement program — well short of the $250 million the lead pipes coalition is seeking.

Corey Mathisen, the Department of Health’s Lead Service Line Replacement Program manager, said federal funding is expected to support the 2027 construction season but will fall short of meeting overall needs.

Nels Paulsen of Conservation Minnesota, another group in the coalition, said cities need certainty before they can plan 2027 construction projects, making the current legislative session the critical window.

“If we don’t get funding in the 2026 legislative session it’s going to be a challenge to have a significant construction season,” Paulsen said.

Coalition advocates argue that lead pipe removal carries a built-in endpoint that distinguishes it from open-ended spending programs.

“The thing with a lead line replacement is once we get it done, it’s done,” Wefel said. “And I think it’s going to be in Minnesota’s best interest to continue to get ahead of other states by making the investments in that program.”