Proposed Water Tax Bill Advances in the Assembly

  • by Heather Engel
  • Mar 27, 2019
  • Water News

A bill containing a modified version of Gov. Gavin Newsom’s proposed statewide water tax passed out of committee Tuesday.

AB 217 (E. Garcia) was heard by the Assembly Environmental Safety and Toxic Materials Committee. ACWA has an oppose-unless-amended position on the bill with the primary concern being a proposed water tax.

ACWA Deputy Executive Director for Government Relations Cindy Tuck was among the witnesses to testify at the hearing. She told the committee that ACWA members agree that safe drinking water should be a priority for the state and that the problem can be solved this year.

Tuck noted several reasons for ACWA’s opposition to a tax: it’s bad policy to tax an essential resource; a tax would be costly for water systems to implement and manage, thereby increasing the cost of water to residents and businesses; and it would set a bad precedent for additional taxes on water.

She also thanked Assemblyman Eduardo Garcia for his willingness to listen to stakeholders in developing his bill and consider new ideas, such as a trust. Tuck noted that ACWA intended for the trust funding mechanism to replace the proposed water tax as opposed to adding to it.

In addition to the tax, the bill proposes agricultural assessments similar to those proposed in Gov. Brown’s proposed budget trailer bill language in 2018, a modified version of ACWA’s proposed Safe Drinking Water Trust and a commitment to allocate up to 20 % of the safe drinking water funds back to the region of the state in which they were raised.

The committee passed the bill by a 6-3 vote after the author accepted amendments that would require the public water systems to annually remit the tax collected to the State Water Resources Control Board in the amount of 50-cents per service connection. This amendment was made to address the very high implementation costs of having a state tax on the local water bill. Tuck noted that even with the amendment, the proposal is still a water tax.

AB 217 now moves to the Assembly Appropriations Committee.

ACWA and the California Municipal Utilities Association (CMUA) are sponsoring a better approach in SB 669 (Caballero). The bill would create The Safe Drinking Water Trust to be funded with an infusion of General Fund dollars during a budget surplus year. The state would invest the principal, and the net income would provide the needed ongoing revenue stream for drinking water solutions in disadvantaged communities.

SB 669 is scheduled to be heard by the Senate Environmental Quality Committee on April 10.

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