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Utah bill to add sales tax on water dies

Published February 5, 2013 8:45 am

SB154 • Critics said plan was effort to help pay for controversial Lake Powell pipeline.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

While the Legislature expects a fight later over increasing the sales tax on food, a committee on Monday sank a separate effort to add sales tax to water bills — and use the proceeds to build new water projects.

The Senate Taxation and Revenue Committee held a long debate on SB154, but no members liked it enough to make a motion to pass it — so the committee simply adjourned. Its sponsor, Sen. Scott Jenkins, R-Plain City, said he doubts any more discussion on it will occur this year.

The bill was attacked on many sides: by advocates of the poor who said such a tax would hurt low-income people; by conservation groups who said it would help fund a controversial proposed $1 billion-plus Lake Powell pipeline; and by water officials who said it would not raise enough to meet the state's needs.

"The idea is that water should pay its way," Jenkins said. By putting sales tax on water bills, he said it would have brought in $24 million a year from water users — and put that money into an existing revolving account used to loan money to water districts to pay for projects.

He said the state currently has a backlog of $16 billion worth of needed water projects, and more money into the state loan fund is needed to finance them.

But Sen. John Valentine, R-Provo, in looking at the list of projects, noted that many did not seem to be high priority — ranging from sprinkler systems for golf courses to maintenance of wells and sewer systems. He and Sen. Howard Stephenson, R-Draper, said it makes more sense for districts themselves to save for or finance such projects without state help.

Some groups worried much of the money from the proposed tax would go to help pay for a controversial pipeline to bring water from Lake Powell to the St. George area — which they contend is not needed because the area has enough water for its needs if residents conserved water better.

"In Washington County, we are the West's most wasteful users of water — and we have some of the lowest water rates," Christi Wedi, representing Citizens for Dixie's Future, said.

Former Attorney General Paul Van Dam, who now lives in St. George, said water districts cover much of their costs through property taxes instead of water-use fees, so residents don't have incentive to use less water. He encouraged the state to adopt policies to help conservation.

Ronald Thompson, general manager of the Washington County Water Conservancy District, who has pushed for the Lake Powell pipeline project, said the sales tax would not generate enough money to fund the pipeline project, nor enough to fund all other needed projects — but said it was at least a start.

Critics attacked the proposed tax as being one that would hurt the poor more than the rich.

"It would add to burdens of low-income households, hard-working families who are trying to hold onto their homes, seniors who are on trying to make it on fixed incomes," said Linda Hilton, director of the Coalition of Religious Communities.

After the committee failed to act on his bill, Jenkins said that the state still needs to find a way to fund water projects and "nobody I have talked to has any better ideas" about how to do it.