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A Tax on Drinking Water is not the Solution

Post Date:04/11/2018 12:05 PM

Many of our residents are not aware that a state tax on drinking water is being advanced by the Brown Administration, in coordination with the proponents of SB 623. This proposal will impose a state tax on drinking water through SB 623 by Senator William Monning (D-Carmel), a two-year bill from 2017, as well as a Brown Administration budget trailer bill.  The intent of a drinking water tax is to assist disadvantaged communities in California that lack access to safe drinking water. However, the Brown Administration’s approach of requiring local water agencies and cities across the state to collect a tax on drinking water from their customers for the State of California is highly problematic.

As a local water agency, we are committed to delivering safe and reliable water. We wholeheartedly support the goal of ensuring safe drinking water for all Californians, especially those in disadvantaged communities. However, imposing a tax on drinking water is not the appropriate solution for solving this key social problem for the state.

A tax on drinking water works against keeping water affordable for Californians. Laguna Beach County Water District has serious concerns with the State Water Resources Control Board requiring California’s local water agencies to collect a tax for the state. This legislation opens the door to additional taxes on water in the future. There are already two other water tax proposals being discussed in Sacramento, with one proposed as high as $10 per month on water bills.

It is inefficient for local water agencies to collect taxes to then send to Sacramento. Instead of turning local water agencies into taxation agencies for the state, there are more appropriate funding sources to address the serious issue of disadvantaged communities experiencing water quality and contamination issues. These funding alternatives include: the Safe Drinking Water State Revolving Fund (SRF), the General Fund, and General Obligation Bonds. SB 5 (de Leon, 2017) will be on the June 2018 ballot as Proposition 68 and proposes $250 million for safe drinking and clean water, as well as another bond initiative that proposes $500 million for safe drinking water.

In addition to the taxation issue, the bill is poorly drafted to further the desired purpose.  For example, the language in the bill is vague in defining which areas should be eligible for funding, lacks clear criteria to ensure that only disadvantaged areas where the water is not safe will receive funding, and duplicates other efforts already ongoing to develop a plan for low-income water rate assistance. The bill is also vague on the scope of the proposed authority to be granted to the State Resources Control Board for the administration and operation of the tax fund.

At its April 5, 2018 Laguna Beach County Water District Board meeting, the District’s Board of Directors formally took the position to oppose-unless-amended both SB 623 and the budget trailer bill proposing a tax on drinking water. The lack of access to safe drinking water in certain disadvantaged communities is a public health issue and a social issue the state needs to address.

We encourage you to learn more about this important issue. If you would like more information on this, please visit the Association of California Water Agencies (ACWA) website at: https://www.acwa.com/no-water-tax.  If you would like to voice your concern, you can contact your local legislators: Assembly member Matthew Harper at assemblymember.harper@assembly.ca.gov; Assembly member Bill Brough at assemblymember.brough@assembly.ca.gov; Senator John Moorlach at senator.moorlach@senate.ca.gov; and Patricia Bates at senator.bates@senate.ca.gov.