Last summer, the Safe and Affordable Drinking Water Act, legislation seeking to add a tax to your water bill, died, returned, and died again during negotiations to pass California’s state budget. But support for the tax did not die. On January 11, 2019, Governor Gavin Newsom released his proposed budget for fiscal year 2019-20 and it includes a Safe and Affordable Drinking Water Fund.
Revenue for the fund would be collected through a statewide tax on drinking water and an assessment on fertilizer sales and dairies, and would be used to fund drinking water solutions for disadvantaged communities, primarily in California’s central valley, that are dependent on contaminated groundwater. As previously structured under Senate Bill 623, the water tax would raise an estimated $160 million in annual revenue, with 85 percent of the revenue coming from the tax on urban water bills.
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 issues.
Opponents of the tax agree with the goal, but believe that a tax on drinking water works against the goal of keeping water affordable, and that alternative funding solutions should be utilized. They have proposed a Statewide Drinking Water Trust, which would be funded with a one-time infusion of state general fund dollars during a budget surplus year, as a credible alternative.
Read Helix Water District’s February 6, 2019 comment letter opposing the water tax and supporting the drinking water trust.
Low Income Rate Assistance Program
Helix is also lobbying our elected representatives regarding the Low-Income Water Rate Assistance Act, established through Assembly Bill 401 in 2015, which directs the State Water Resources Control Board to prepare a plan to create a statewide program to help low income households pay their water bills.
On January 3, 2019, the State Water Resources Control Board released a draft report analyzing the options for designing, funding and administering such a program. Proposed options include providing a tiered discount to households that have incomes below 200% of the federal poverty level when their monthly water bills (based on 12 units of water use) exceed a certain amount. Program costs are dependent on the option selected but could total $606 million during the first year of the program.
Funding options considered include adding a $7-$10 per month fee onto non-low-income household water bills statewide, a tax on high personal income earners or businesses via the state income tax system, and a tax on bottled water.
Read Helix Water District’s comment letter to the State Water Resources Control Board dated January 31, 2019.