Gulp! State Senate may tax drinking water from tap

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The cost of water may increase and local water districts may have no role in the change. The California Assembly’s Appropriations Committee held a hearing on Senate Bill 623 last week, which would establish the Safe and Affordable Drinking Water Fund.

SB 623 authorizes a monthly 95¢ tax on drinking water. That’s for customers with pipelines of 1 inch or smaller. As the customer’s pipeline increases, the monthly tax would be $4 for a 1- to 2-inch pipe and up to $10 monthly if the pipe were larger than 4 inches.

Generating about $100 million annually, these funds, along with revenue from two other taxes, would be used to improve aquifers and water systems, which are considered contaminated and exceed federal or state water quality limits.

The proposal authorizes two other tax levies: a $0.005 per-dollar sales fee on all fertilizer materials is estimated to yield about $17 million annually.

The third tax would impose a $0.01355 per-hundred weight of milk on every milk handler already subject to specified regulatory milk fees, producing about $5.3 million each year.

The bill’s primary sponsor, Sen. William W. Monning, who represents the 17th Senate District, which includes all of San Luis Obispo and Santa Cruz counties, and portions of Monterey and Santa Clara counties, said in a press release after the hearing, “In Flint, Michigan, 100,000 people were exposed to unsafe drinking water, but right here in California more than 1 million Californians are annually exposed to unsafe drinking water. Having access to clean drinking water is a basic human right that should be guaranteed to every person in California, and it is time that we act on this issue.”

According to the Appropriation Committee’s report, the target beneficiaries of these funds would be the more than 300 drinking water systems in disadvantaged communities — serving about 200,000 people — that are unable to provide safe drinking water.

The fertilizer and dairy industries support the bill, and the taxes levied on their businesses will be about 20 percent of the total funding.

At the Tuesday hearing, representatives of the Association of California Water Agencies strenuously opposed the bill. ACWA Deputy Executive Director for Government Relations Cindy Tuck testified, “Water is essential to life and shouldn’t be taxed. It works against water affordability. 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.”

The Appropriations Committee report noted that the water tax had not been included in any previous versions of the bill. Consequently, staff recommended that the committee consider whether adequate time has been available to assess the levy and its ramifications.

“This bill will only have been in print for three days at the time of this hearing.

The committee may wish to consider whether there has been adequate time for the public to review the provisions of this bill,” staff wrote.

When asked about the proposal, Jack Hoagland, acting general manager for the Idyllwild Water District, replied, “This will be a bureaucratic nightmare to administer and continue to track.”

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  1. Once again, the politicians are out to tax us to Hell! The local water districts told everyone to conserve and now are punishing people by raising the rates. So the state wants to get in on this revenue stream, too? Ouch. Between our ever rising property taxes, mostly thanks to local bond issues robbing us, overly high sales taxes, and the forthcoming big hike in gas taxes in California, unless you’re a hot shot billionaire, you’d better reserve a moving truck for leaving the state soon. When they raised the minimum wages in restaurants we are seeing sudden price hikes that are causing entire restaurant chains to go out of business. I walked out of a Red Robin in Stockton when I saw their prices. A regular hamburger is over $12 in most restaurants, plus about 9% sales tax, entire chains are going out of business. As one top California tax official told me, “Taxes have consequences!” Thank goodness, though, for The Habit restaurant chain where I can still get a great hamburger for under $5 as well as a big garden salad for under $4 plus tax.

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