A House committee advanced a bill Friday to finance water projects, including the $1.2 billion Lake Powell pipeline, by earmarking an estimated $74 million in sales taxes for a loan fund starting in 2016.
HB174, sponsored by Rep. Patrick Painter, R-Nephi, has drawn the ire of conservationists, budget watchdogs and the Utah Taxpayers Association, and some who voted for it Friday morning said they did so only to allow a full debate on the House floor.
The House Revenue and Taxation Committee passed the bill 9-5.
A smaller state revolving-loan fund has made Utah’s growth possible for the past half-century, Utah Division of Water Resources Director Dennis Strong said, but now more is needed. Statewide projects big and small will need $15 billion during the next 20 years, he said, and getting it means healthy economic growth.
"The return to the state and the coffers of the state is significant," he said.
Critics believe the Washington County Water Conservancy District, whose Lake Powell plans will cost more than $1 billion of that, needs to price water appropriately to boost conservation before asking the state for help. Property taxes cover more than half the district’s bills, effectively subsidizing water rates that otherwise might rise to encourage less lawn sprinkling.
"We need to pay for what we use, pay adequate water prices and conserve," Citizens for Dixie’s Future Director Christi Nuffer told the committee.
The bill would earmark 15 percent of the growth in statewide sales-tax revenues for the loan fund, which St. George residents or other recipients might repay through construction impact fees or taxes. The set-aside of new revenues, on top of a 30 percent growth earmark that the Legislature approved for roads last year, caused some lawmakers of both parties to balk.
Painter repeatedly has stressed that the earmark is only for growth in sales revenues — not dipping into existing budgets — but skeptics have noted that all government services will need more funds as the population grows.
"That did concern me a lot with the many pressing needs we have with the state," said Rep. Merlynn Newbold, R-South Jordan, who voted against the bill.
"It’s a fundamentally unwise public policy for us as a Legislature to seek to tie the hands of future Legislatures," said Rep. Brian King, D-Salt Lake City.
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