The town of Milford has elected to replace its aging water infrastructure, with construction for its new water filtration facilities set to start this July.

News Release

MILFORD — Many residents won’t drink the rust- and manganese-tainted tap water in Milford, choosing instead to buy bottled water. Often, aging lead pipes and water rich in iron even leave clothes fresh out of the wash discolored. But relief is on the horizon.

The 1,600-person community recently secured nearly $7 million from Indiana’s Clean Water and Drinking Water State Revolving Funds to install a new filtration system and replace lead lines serving about 60 homes. The project, according to town clerk Patricia Gall, wouldn’t have been possible without the low-interest loan, more than half of which will be forgiven through grants.

However, the future of such infrastructure upgrades is uncertain as lawmakers, led by Pres. Donald Trump, push for steep cuts to federal clean water funding.

Trump’s proposed 2026 budget would slash funding for the Environmental Protection Agency’s State Revolving Fund programs by nearly 90%, from $2.77 billion to $305 million. The proposal marks the largest reduction in the program’s history.

Indiana received $207 million through the revolving funds in 2024. Under the Trump plan, that figure would fall to just $72.3 million, according to the Environmental Protection Network.

A May resolution passed by the U.S. Senate maintains baseline funding but eliminates $1.4 billion in earmarked water infrastructure support.

The White House argues the EPA’s revolving funds were never meant to be a permanent source of federal funding and that the responsibility for maintaining water infrastructure should fall to states.

Environmental groups and local officials say cutting federal support would be devastating, particularly in states like Indiana, which already ranks 12th worst in the nation for drinking water quality, according to U.S. News & World Report.

Indiana communities are already struggling to meet water infrastructure needs. A 2016 Indiana University Public Policy Institute report estimated the state faces a funding gap of $6.5 billion to $8.5 billion through 2034. In late 2024 alone, more than 80 communities sought $1.14 billion in loan assistance but received just $239.5 million — about 20% of requests, according to the Indiana Finance Authority.

Milton, a rural Indiana town of 450 residents, received a nearly $4 million forgivable loan this year to replace lead pipes and upgrade its water plant. But other critical projects, including repairs to wells and a water tower, remain unfunded.

Lorean Johnston, deputy director of the Alliance of Indiana Rural Water, warned that funding cuts could result in significant water bill increases for residents, especially in small towns.

In Milford, rates are set to triple from $32 to $96 to help repay the portion of the loan not covered by grants.

Delays in funding water infrastructure could drive up long-term costs, added Desi Rybolt, a water policy specialist for Indiana Conservation Voters, noting that construction expenses continue to rise.

Whether Trump’s proposed cuts are enacted remains to be seen. Water infrastructure funding has historically enjoyed bipartisan support, Johnston said. But he acknowledged that the current climate in Washington appears less favorable.

Gall said Milford was lucky to receive funding this year. She worries that future projects in other towns may not be as fortunate.