No, the column’s header is not my lame attempt at a joke. I’ll explain shortly.
As we discussed here several weeks ago, I said I’d be keeping both eyes open in the event the on again-off again, on again-off again proposal to tax public drinking water was resurrected in the closing days of the current legislative year that occurs on August 31.
Well, the water tax is back again for the third time in less than six months. The stop-start mode of the bill was due to legislators and Gov. Jerry Brown backing down several times because of its universal unpopularity with voters and the state’s 4,000 water districts.
The proposed tax on drinking water was first introduced in 2017 by Sen. Bill Monning (SB 623). The primary purpose of the bill was to fund solutions in some disadvantaged communities without access to safe drinking water, which are primarily located in rural areas in the Central Valley. The proposal would have generated roughly $110 million per year through a 95-cent monthly fee on home water bills as well as taxes on businesses of up to $10 per month. Another $30 million would come from higher fees on agricultural and dairy businesses, industries whose chemicals contribute to the problem of contaminated groundwater. In late 2017, the bill was put on the shelf but never withdrawn by Monning.
In January of 2018, the Brown Administration proposed a budget trailer bill that was very similar to Monning’s SB 623. In June, escalating public opposition to the proposal forced the Budget Conference Committee not to adopt the budget trailer bill after Gov. Jerry Brown formally abandoned the idea that would have taxed water for the first time in California history. The committee left the water tax out of the state budget opting to aside $23.5 million in General Fund revenue for safe drinking water.
But 10 days ago, Brown and his legislative backers rebooted the water tax idea with a new wrinkle. The proposed tax on water bills would be “voluntary,” a move to regenerate support among apprehensive lawmakers having to face voters over an unpopular tax in an election year.
The governor’s 11th hour proposal is also sponsored by Sen. Monning in the form of two new bills that would require water districts to add a voluntary remittance with an opt-out feature to the water bills of California families and businesses. Customers would be allowed to pay the remittance, pay a different amount or elect to opt out of payment. As was the case with the original proposal, the bills are expected to generate as much as $100 million per year and cost most homeowners no more 95 cents per month, money that would be prioritized to areas with the highest risk. The State Water Board would develop best practices policies on how to collect the money.
According to Jon Coupal of the Howard Jarvis Tax Association, “Although tax increases require a two-thirds vote, this legislation would pass with a simple majority of 50 percent plus one vote. Why? Because of tricky language that makes the tax ‘voluntary.’ Why is it tricky? Because every water customer will pay it unless they follow a process to opt out. What is that process? Every community water system will have to develop its own procedures, then reprogram its billing system. There are thousands of community water systems in California and each one may do it differently. This costly burden will either be passed on to water customers or it will be deducted from the amount of money that is sent to the state for the intended purpose of cleaning up groundwater in rural areas. This tax isn’t necessary. The Legislature had already budgeted tens of millions of dollars to pay for this cleanup, and voters already approved billions of dollars in water bonds that could be used to fund this important priority. This is just another excuse to raise taxes instead of spending existing revenue as it should be spent – to protect the health and safety of all Californians.”
As I’ve argued previously, it’s a very bad idea because it is the proverbial camel’s-nose-under-the-tent: It surely would be the first step towards more taxes on public drinking water.
Keep in mind, there’s money available from other sources — such as the state’s general fund — that could be used for contaminated groundwater remediation, which was exactly what Brown and the Budget Conference Committee did back in June when they deep-sixed the water tax. The quick and dirty answer to this problem is that the people who caused the contamination are the ones who should be at the head of the line to pay for its remediation.
However, backers of the statewide water tax, an odd and incongruous bedfellow coalition of agriculture and dairy interests, fertilizer and chemical companies, and environmental groups, have conjoined their disparate interests in this issue:
Environmental and public health groups want the contamination cleaned up, and they don’t care who pays for it. Whereas big agriculture, and fertilizer and chemical companies are looking anywhere and everywhere for other pockets to help off-set their liability.
Anyway, as I write this we are literally at the 11th hour before the state legislature calls it a year and skeedaddles home. They’ve yet to take final action on the water tax, although I won’t be surprised at all if they approve it.
If they do OK the first tax on public drinking water in state history, don’t you be surprised if in the near future they tax the very air you breathe. Here’s how they would justify it.
California leads the nation in advancing air quality with a governor who is a champion of combating greenhouse gasses, global warming, and pollution and contamination of our air. While we have made great progress in improving the quality of the air we breathe, we still have a long way to go and not enough resources to get where we desperately need to be. It’s only fair and quite reasonable that the citizens of this state make a small investment in improving the quality of the air we all breathe by paying a small remittance to continue our efforts to remove all contaminants from that air.
Don’t laugh, if they can tax water, they can tax air.
Update On Water Tax
A day after I wrote this piece there was action on the water tax.
On Friday, Aug. 31, in the closing hours before the California legislative year ends, Assembly Speaker Anthony Rendon announced that the proposed water tax bill is dead.
Rendon explained the reasons in a statement that said in part, “The Assembly is committed to identifying a sustainable funding source to ensure safe drinking water for all Californians. That’s why we put Proposition 68 on the (June primary) ballot, which included $540 million for water projects. In the budget this year, we also included over $25 million for emergency drinking water projects, lead testing and remediation, and other water projects.
“But much more needs to be done, and a piecemeal funding approach won’t work …”
Of course, those are all the same arguments that I made as to why the tax wasn’t needed in the first place, but almost certainly the Sacramento gang will resurrect it again in 2019. Rendon said as much in between the lines.
Who knows, maybe next time around they’ll consolidate the new water tax bill with the air tax, might as well go for what you know, two birds with one shot.
(Jim Shields is the Mendocino County Observer’s editor and publisher, and is also the long-time district manager of the Laytonville County Water District. Listen to his radio program “This and That” every Saturday at 12 noon on KPFN 105.1 FM, also streamed live: http://www.kpfn.org.)
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