Aug. 19, 2015
Proposal for New Statewide Tax on Water Bills Could Emerge in Final Weeks of Session Letters, Calls Will Be Needed to Oppose Last-Minute Legislation on Public Goods Charge
As the Legislature returns from recess for the final weeks of the session, there are signs that a proposed public goods charge or other tax on water bills could emerge in a policy bill or in budget trailer bill form. In anticipation, ACWA is meeting with legislative leaders and potential coalition members to oppose a possible bill or other last-minute effort to advance a public goods charge / water tax before the Legislature adjourns Sept. 11.
Though it remains to be seen exactly what will be proposed and when, ACWA anticipates the proposal could be billed as a “drought response” measure that would generate funding to assist disadvantaged communities that lack safe drinking water and / or have been severely impacted by the ongoing drought. While ACWA agrees that some disadvantaged communities need assistance to address their water supply challenges, we do not believe a public goods charge imposed on water bills is the appropriate mechanism to fund solutions.
Get Prepared Now
To prepare for a potential legislative proposal and subsequent debate, ACWA is urging its member agencies to take a formal position now opposing the concept of a public goods charge or other water tax, and begin drafting letters of opposition that can be sent to the Legislature and Gov. Jerry Brown on short notice.
ACWA is asking members to take this action proactively because there will be little time to react and mobilize once a proposal emerges. As ACWA members may recall, budget trailer bill language on mandatory water system consolidation and drinking water fees appeared in print and passed both houses of the Legislature in a matter of days before the July 1 deadline.
A public goods charge proposal could follow a similar trajectory.
Basis for Opposition
Establishing a permanent statewide tax on water bills under the heading of emergency drought relief is illogical and misleading. Water agencies have made, and continue to make, significant local investments in water management programs and infrastructure. According to a recent report by the Public Policy Institute of California, local water and wastewater agencies are spending more than $25 billion a year on local water-related programs and projects. State and federal agencies spend just a fraction of that on water in California each year. These local investments prepared local water managers to respond successfully to the current drought and have shielded the state’s economy from the drought’s most severe impacts over the past four years.
While there is clearly a need to fund sensible long-term solutions and assist disadvantaged communities that do not have safe drinking water, a tax on water bills paid by a subset of Californians is not the solution. Further, by redistributing local ratepayer dollars to areas that have been unable to fund water system investments, agencies that already have made significant investments in water efficiency and local water supply needs would be unfairly penalized. A public goods charge on water also would make it more difficult and costly for agencies to fund critical local projects and programs.
A public goods charge on water is contrary to local control and accountability – local water managers are best suited to identify ways to spend locally-generated revenues at their respective agencies. Layering an additional tax on water bills in order to send money to Sacramento, where a portion will be carved out to fund another layer of administration, is not efficient and is not an appropriate solution or sound policy. It will make water less affordable. More appropriate funding sources – such as the state’s general fund – should be pursued to address a problem that is in the general public’s interest to solve. With income tax making up a good part of the state’s general fund, Californians with higher incomes would be contributing more and Californians with lower incomes would contribute less.
The issue is far too important to resolve in a last-minute bill that would be jammed through in the final weeks of the session. ACWA believes a more thoughtful, transparent process is needed to examine alternatives and find appropriate long-term solutions.
Take Action Now
If your agency has not previously adopted a formal position opposing a public goods charge on water, ACWA recommends that you take a resolution to your board of directors as soon as possible. A sample resolution is available here.
In addition, we recommend that you draft a letter expressing your opposition so it is ready to go when needed. A sample letter is available here to edit and send. Please be sure to edit and personalize the sections of the letter referencing your agency name, and send a copy of your final letter to ACWA by fax at (916) 325-4927 or email to mariem@acwa.com.
In addition, a sample fact sheet is available here for use in briefing various audiences on the issue.
Tags: California, legal, water