On June 9, the 2019 Conference Committee approved a safe drinking water funding solution for disadvantaged communities in California that do not have access to safe drinking water. The solution will be enacted through the 2019-’20 Budget and related trailer bill language.

In the first year, Fiscal Year 2019-’20, the safe drinking water funding solution will be funded with $100 million from the Greenhouse Gas Reduction Fund (GGRF) and $30 million from the General Fund. This will be part of the 2019-’20 Fiscal Year State Budget.

After the first year, the funding will be 5% of the GGRF continuously appropriated – capped at $130 million per year. The agreement includes General Fund funding as a backstop if 5% of the GGRF is less than $130 million in any year. The funding will sunset in 2030. The solution does not include a water tax.

Trailer bill language will create a safe drinking water fund and provide the framework for the funding program.

Many Legislators on both sides of the aisle played key roles in making this agreement possible. The leadership of the Governor, the Senate President pro Tem, and the Speaker and the work of the Conference Committee in solved a complex problem to ensure that all Californians have access to safe drinking water.

Earlier this year, Gov. Gavin Newsom released his proposed budget for Fiscal Year 2019-’20 that included a proposal for a Safe and Affordable Drinking Water Fund. Revenue for the fund would be collected through a statewide tax on drinking water and assessments on fertilizer sales and confined animal operations. A proposed water tax was also included in AB 217 (E. Garcia). That bill is now in the senate and not expected to advance.

In 2018, despite attempts to create a new water tax, the Legislature’s Budget Conference Committee rejected the statewide water tax proposed in the 2018 budget trailer bill and acted to include more than $25 million in General Fund revenue for safe drinking water in the 2018-2019 Fiscal Year State Budget. Also in 2018, California voters approved Proposition 68 with $250 million for safe drinking water and clean water projects that is prioritized for disadvantaged communities.

Why is there a need for safe drinking water funding in California?

  • Most Californians have access to safe drinking water, but some disadvantaged communities do not
  • Lack of access to safe drinking water is a public health issue the state must address
  • A funding gap exists for operations & maintenance (O&M) costs for community water systems that treat water
  • In general, O&M costs cannot be financed using existing state and federal drinking water funding sources
  • In some situations, consolidation of a community water system may be the most effective solution
  • A financial solution is needed for O&M and consolidation costs in disadvantaged communities that can complement existing federal and state funding sources for capital costs.

Californians Oppose a Drinking Water Tax

Tulchin Research conducted a statewide poll in early 2018 based on a previous drinking water tax proposal. That poll showed that 73% of likely voters oppose a new tax on drinking water, both initially and even after hearing more information.

Additionally, 74% would prefer using existing funding sources rather than establishing a new tax on drinking water.

For more on the polling, please read the polling results memo or see our news release.

Questions

For media inquiries, please contact ACWA Director of Communications Heather Engel at (916) 441-4545.

To learn more about the funding solution moving forward, please contact ACWA Deputy Executive Director for Government Relations Cindy Tuck at (916) 441-4545.