Once again, California has rejected a “water tax” as a means of remedying the drinking water issues facing small and low-income communities. Instead, the Legislature has opted to use existing revenue to address the problem. On June 13, 2019, the California Legislature passed a $215 billion budget, which included an appropriation of $133.4 million for a safe drinking water fund. Gov. Gavin Newsom and other legislators had originally put forward a proposal to improve water infrastructure operation and maintenance (“O&M”) by imposing a statewide tax on all water customers, which would have been in addition to a tax on fertilizer sales and certain agricultural facilities. This proposal was met with immediate stiff opposition, with opponents citing the state’s projected surplus of $21.5 billion and the administrative burden on local water agency purveyors.
The rejection of the water tax is just the latest development in the ongoing debate over how to ensure clean, safe drinking water for all Californians. In 2012, California declared access to safe drinking water a human right, but still many people across the state, and particularly in the small towns and unincorporated areas of the Central Valley, are served by small systems that lack the necessary infrastructure to make this right a reality. A key challenge facing public water systems in low-income communities is that existing sources of federal and state grant funding can only be used to fund capital improvements and not O&M expenses. The clean water projects funded by the current appropriation will be used to help communities that do not have a reliable source of clean drinking water improve the O&M of their water treatment systems, rather than build new infrastructure.
In the first year, $100 million for the projects will come from the Greenhouse Gas Emissions Reduction Fund, $30 million will come from the state’s General Fund, and $3.4 million will come from the State Water Resources Control Board’s General Fund.
The Association of California Water Agencies, California Municipal Utilities Association, and California League of Cities all opposed the proposed water tax and supported an alternative approach to funding safe and affordable drinking water programs.