California considers 'water tax' to fund clean-up efforts

Senate Bill 623, the Safe and Affordable Drinking Water Fund, aims to provide funding for projects in disadvantaged communities to clean up drinking water sources impacted by pollutants such as arsenic, nitrates and trihalomethanes.

An interesting bill is working its way through the California state legislature that, if passed, could set a significant precedent in the state - and perhaps in the water industry as a whole.

Senate Bill 623, the Safe and Affordable Drinking Water Fund, aims to provide funding for projects in disadvantaged communities to clean up drinking water sources impacted by pollutants such as arsenic, nitrates and trihalomethanes.

The bill has been in negotiations for several months, and has generally been met with wide support from environmental organizations and the agriculture industry. Water agencies have expressed support for the intent of the bill, but have taken issue with some of the finer policy points.

In July, when the bill sailed out of committee with a 5-1 vote, the Association of California Water Agencies (ACWA), a coalition of more than 430 public water agencies, voiced several concerns about the legislation, including the fact that, as written, it would not be limited to disadvantaged communities and that the funding mechanism was not clear. The bill’s author, Sen. Bill Monning (D-Carmel), indicated that the Appropriations Committee would decide on the funding strategy.

Subsequently, in August, an amendment taxing homes and business was added to the bill - without policy hearings or any input from water agencies. Proponents say it would generate $2 billion over the next 15 years by assessing a $0.95 monthly fee on home water bills, as well as through taxes on businesses of up to $10 per month, and through higher fees on agricultural and dairy businesses.

ACWA Deputy Executive Director for Government Relations Cindy Tuck testified during the Assembly Appropriations Committee hearing. “Water is essential to life and shouldn’t be taxed. It works against water affordability,” she said. “We agree with the intent - we want to solve the problem - but we oppose a regressive tax on water. This is a state social issue and yet local water agencies are being asked to collect money through a tax and send it to Sacramento.”

Water agencies maintain that levying a tax on water users would set a bad precedent and negatively impact water affordability for low income residents. Rather, money from the existing General Fund - which comes mainly from income taxes and is progressive - combined with other existing federal and state funding mechanisms, should be used for water clean-up projects, they said.

In an opinion piece for the East Bay Times, John Coleman, a board member of the East Bay Municipal Utility District and past president of ACWA, wrote, “Adding a statewide tax to local water bills is simply not sound policy… It opens the door to future taxes on water customers to solve other statewide problems, further eroding the affordability of water.”

At the time of this writing, the bill has been placed on suspense. The Assembly Appropriations Committee has until September 1 to vote on whether to advance it to the Assembly floor.

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