Comments on Preliminary Draft of California Water Plan Update 2018

  • Jan 16, 2018
  • Comment Letters

Agency: California Department of Water Resources

Subject: Comments on California Water Plan Update 2018, January 4 version of Preliminary Draft, Chapters 4 and 5

Letter excerpt:

As a supplement to these comments we have also attached our comment letter dated October 13, 2017 (Attachment 2), which describes a number of analytical considerations and policy considerations that have not yet been completely addressed in the January 4 version of the Preliminary Draft of Update 2018. ACWA remains particularly concerned about the lack of detail in the “Sustainability Outlook” which is intended to support the rest of the Plan, including the recommended actions and transparent justifications for the scale of the funding needs and the scope of the funding mechanisms.

Specifically, ACWA remains opposed to imposition of the novel mechanism of a “Water Use Surcharge (also known as a “water tax” or a “public goods charge”). Such a proposal would need a demonstration of a direct link to specific benefits received by local ratepayers (the nexus). Such a tax will face certain legal and political challenges. Such a funding mechanism would need to be developed based on clearly a defined cost-of-service foundation and transparent accounting principles that would show what specific state services are being received by rate-payers. Any such proposal will require thoughtful policy work by the Legislature, including consideration of fundamental issues of “fairness” (for example a water use surcharge is a regressive tax, which would disproportionally affect the state’s low-income residents, in contrast to a progressive tax such as the personal income tax, which is used to support increased State general fund spending). Additionally, a State water use surcharge would make it more difficult and costly for local water agencies to fund critical local water efficiency and supply projects because it would reduce the ability and willingness of local rate payers to fund local projects. Finally, a surcharge on local water bills in order to send money to Sacramento, where a portion will be carved out to fund another layer of administration before some of it is returned for local or regional grants is not efficient and is not sound public policy. Public water agencies are strongly opposed to any form of State water tax for any purpose. Instead, ACWA supports used of the State general fund to provide funding for on-going state agency administrative work, and project funding mechanisms that are built on leveraging local funding and developing and implementing local solutions matched with existing state mechanisms such as voter-approved bonds in the form of either low interest loans or grants.

Download ACWA’s comment letter

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