A legislative task force wants to siphon 15 percent of revenue growth from state sales tax to finance the $1.5 billion Lake Powell Pipeline. That is unacceptable because it would create a funding drought for other essential state programs, from higher education to Medicaid.
Last year the Legislature set aside 30 percent of sales tax revenue growth for roads. If it designates another 15 percent for water projects, that would leave only about half of sales-tax income growth to fund increases for all other programs in the state's budget outside of public education. That's unreasonable because the sales tax is the largest revenue source for the state general fund, meaning that it pays for most everything outside of public schools.
The water task force says its scheme would raise an estimated $50 million a year or more starting in 2014 to finance state bonds to pay for the Lake Powell Pipeline. The people who use the newly supplied water would pay the state back, mostly through impact fees. By 2040, those fees would add $20,000 to the cost of a new home.
Repayment through impact fees is fair because it would oblige the people who will use the newly supplied water to pay for it. But there is a danger that if population growth does not live up to the 5 percent per year that is predicted, the water districts in southern Utah could have difficulty repaying the loans to the state.
The 139-mile pipeline would carry 82,000 acre-feet of water from Lake Powell on the Colorado River to Kane, Washington and Iron counties.
Once the Lake Powell Pipeline was paid off, the revolving water loan fund that had been created for that project would then be available to finance other projects, such as a dam on the Bear River.
However, the state as a whole cannot afford to finance the Lake Powell Pipeline when it will face massive demands on the state budget from growth in Utah's population center, i.e., the Wasatch Front. It would not be right for 3 million Utahns to finance a huge pipeline project so a population roughly the size of Salt Lake City can continue unlimited growth. Especially when taxpayers in Utah, Salt Lake and seven other counties already are paying property taxes to complete the Central Utah Project.
Washington, Kane and Iron counties can provide for their immediate growth needs through water conservation. They cannot in good conscience ask the rest of the state to finance their pipe dream at the expense of critical statewide government services.