Facts on Proposed State Tax on Drinking Water
A proposal to impose a state tax on drinking water was introduced through SB 623 by Sen. William Monning (D-Carmel), a two-year bill introduced in 2017 .
Supporters of the tax cite the urgent need to provide safe drinking water to disadvantaged communities and find a reliable solution to important public health issue. While ACWA agrees with the goal, we are advancing alternative funding strategies to address this important issue.
Background on Drinking Water Tax Proposals
In March 2017, Sen. Monning introduced SB 623, a bill aimed at funding drinking water solutions for disadvantaged communities. The bill was amended at various times throughout the year, however, language proposing the tax on drinking water was added to the bill on Aug. 21 – just two days before the bill was scheduled to be heard in the Assembly Appropriations Committee. SB 623 was made a two-year bill on Sept 1, 2017. The Assembly Appropriations Committee referred the bill to the Assembly Rules Committee, where it remains today. The Assembly Rules Committee could refer the bill to one or more policy committees, or move the bill directly to the Assembly floor.
In January, Gov. Jerry Brown released his proposed 2018-’19 budget, and the summary document signaled that the administration would be advancing statutory language consistent with the framework of SB 623. The California Department of Finance posted the budget trailer bill language on Feb. 1 that is essentially the SB 623 language. ACWA’s State Legislative Committee took an oppose-unless-amended position on the budget trailer bill on Feb. 9, 2018.
The budget trailer bill did not make it through budget negotiations in June, but the water tax may still advance by August 31, 2018 through SB 623 or SB 845. Any proposal for a new tax requires a two-thirds majority vote of both the Assembly and the Senate. Because SB 845 is a voluntary contribution, only a simple majority is needed to pass the bill.
Local, public water agencies are committed to providing safe and reliable water and agree with the intent of the bill. ACWA maintains an oppose-unless-amended position on both bills for several reasons, including:
- The state should not tax or add charges to something that is essential to life, such as water and food. The public does not support the precedent of starting to tax resources that are essential to life.
- The cost of living in California is already too high. Californians do not support a new tax or charge on drinking water.
- A tax or charge on drinking water would work against the goal of keeping water affordable for Californians.
- This new law would turn thousands of local water agencies into tax collectors for the state of California.
- A voluntary opt-out tax will inadvertently raise water bills for Californians due to the cost of implementation.
What Do Californians Think?
A recent survey commissioned by ACWA shows that Californians oppose creating a new tax on drinking water to fund solutions for those disadvantaged communities that do not have access to safe drinking water and instead support using an alternative funding approach that includes existing funding sources.
ACWA believes that this important public health and social issue requires focused state leadership. Another way to fund the solution for this state social issue is a package of funds comprised of ongoing federal safe drinking water funds, voter-approved general obligation bond funds, the agricultural assessments related to nitrate in groundwater and dollars from the state general fund. The state appropriately uses its general fund to pay for other important programs and social issues that have been identified as state priorities – including public health, education, housing, disability services, and other programs that serve and protect residents and communities in need.
Additional information about ACWA’s alternative solution can be found HERE.
To learn about the budget trailer bill and SB 623 supporters, visit HERE.