Depending on how much water you use, you’ll either have sticker shock or savings. For some institutions, a free ride could be coming to an end.
“Water rates, water rates, water rates,” said Senate Revenue & Taxation Committee Chair Dan McCay, R-Riverton. “That’s how we’re going to get more and more conservation for lots of users.”
Sen. McCay is planning to revisit a controversial bill he tried to run last year, reworking property taxes to carve water use out of it. Right now, you get a monthly water bill. But that only covers a small portion of the water you use. The bulk of it is subsidized in property taxes.
“The full cost of water is not found in our rates and therefore the drive to consume continues,” he said in an interview with FOX 13 News.
Sen. McCay is proposing to shift to more of a “user fee” model for water use. The more you use, the more you pay. He believes it could force water conservation as Utah grapples with drought and a shrinking Great Salt Lake.
“It’s easy in a high water year like we’ve had this last winter to look and say ‘Maybe the problem is solved, mission accomplished,'” he said. “I would argue that’s probably a mistake in thought as we continue to see growth and we know that growth is actually the continuing consumer of our water.”
When Sen. McCay originally proposed the idea last year, he got significant pushback from local water districts who worried that upsetting the funding formula in property taxes would hurt critical infrastructure projects and operations. Sen. McCay pulled the bill and passed legislation calling for a study by Utah’s Department of Natural Resources on property taxes and water use.
“There’s been a lot of good with the existing funding model,” Alan Packard, the general manager of the Jordan Valley Water Conservancy District, told FOX 13 News on Friday. “So before we change it, I think it’s wise to really understand the consequences of changes. We’re supportive of the study. We look forward to having constructive conversations and to see the extent to which property taxes should or should not play a role.”
The issue is also listed among the Utah State Legislature’s priorities for the interim sessions over the next year, where it can result in a bill for the 2024 session.
Groups like the Utah Taxpayers Association support Sen. McCay’s proposal. The environmental group Utah Rivers Council has also backed the concept.
“You can run your hose in the gutter and it’s really not consequential,” said Rusty Cannon, the tax watchdog group’s president. “We need to change that to where the more water, the more you pay. The less water you use, the less you pay.”
Part of that discussion will be scrutinizing nonprofits and their tax-exempt status. Right now, nonprofit entities like churches and universities don’t pay property taxes, so in a sense they get a lot of free water. That could change under this proposal.
The Church of Jesus Christ of Latter-day Saints, a major property owner in Utah, told FOX 13 News it has so far not taken a position on the idea of having water use carved out of property taxes. The faith, which has thousands of chapels across Utah, has a lot of lawns though it has been slowly converting some to more drought-friendly landscaping (including a major redesign of Temple Square).
Cannon said the Utah Taxpayers Association believes nonprofits like churches and schools should have to pay more for their water use.
“We think everybody should be paying for their use of water,” he said.
Sen. McCay told FOX 13 News he did not anticipate getting such a major change in legislation would be easy, but pledged to keep negotiating.
“I think there’s potential for constructive conversation that will lead to smart solutions,” said Packard.
