As Utah’s water woes worsen amid prolonged drought, a conservation watchdog is continuing its crusade over how Beehive state residents pay for water — and what it means for saving the state’s most precious resource.
The Utah Rivers Council campaigned against an 11% property tax increase approved by the Jordan Valley Water Conservancy District Monday, arguing that using tax revenue to pay for water infrastructure encourages waste, hides the cost of water for customers, and allows tax-exempt entities to avoid paying their fair share.
“It is shocking,” said Zach Frankel, executive director for the Utah Rivers Council, in a news release, “that conservative Utah insists on incentivizing water waste with tax collections in the middle of the Great Salt Lake crisis.”
Utility experts, however, say property taxes can play a valuable role in covering public costs while keeping water affordable for Utah households.
“But they shouldn’t be the only way we fund water infrastructure,” said Robert Sowby, an assistant professor at Brigham Young University with experience in engineering water systems.
Utahns fund water infrastructure in a variety of ways, including metered rates, property taxes and state or federal grants. The mix can vary from city to city, and from small community providers to multi-county water districts.
When it comes to districts that tap property taxes, Utah Rivers Council asserts non-taxed entities that tend to have a lot of turf, like universities and churches, are not paying the full cost. Using property tax also makes Utahns’ monthly water bill seem artificially low, because the cost is partially buried in their annual tax payments. The group wants to see all water overhead reflected in end users’ per-gallon usage rates.
“Basic market economics suggests,” said Alta Fairbourne, a water advocate for Utah Rivers Council, “that if the price of something goes up, the use of it goes down.”
The nonprofit isn’t alone in its stance against using property taxes for water. The Utah Taxpayers Association would like to see more of the cost rolled into utility bills as well.
“But (with the) understanding that’s unwinding a system that we’ve had for a long time,” said Billy Hesterman, the association’s president. “So we’ve got to do it incrementally to get there.”
Jordan Valley delivers water to most communities in Salt Lake County, including on a contractual basis to Salt Lake City. A spokesperson noted the district uses tax revenues for conservation initiatives, future growth projects, watershed protection and fire suppression.
“We believe the costs of these public services,” the spokesperson said, “should be spread throughout the community.”
Like many water providers in the state, Jordan Valley and the cities it supplies also charge a tiered rate per gallon, which increases the more a consumer lets flow from the tap. It raised those rates last month as well.
Some water providers, like Weber Basin Water Conservancy District and Washington County Water District, have large secondary water systems that supply less expensive, untreated water for outdoor use. For decades, that water use was difficult to track, since traditional meters become choked by river gunk. Districts used property taxes to fund their outdoor watering systems rather than per-gallon rates.
Facing shortages in both the Colorado River and Great Salt Lake basins in 2022, Utah lawmakers committed $250 million in state and federal funds to install new uncloggable meters on most secondary water connections statewide.
Jordan Valley does not provide secondary water.
In 2023, Utah lawmakers further tasked the Department of Natural Resources to evaluate the collection of property taxes to help fund water districts, and whether their revenue stream needed reconsideration.
Like Utah, many other Western states use a mix of property taxes and tiered use rates to fund water utilities, a third-party study commissioned by the department found.
Tax revenues provide a stable revenue stream and keep a vital resource like water affordable, including for low-income households and nonprofits, according to the study. Districts use taxes to help low-income ratepayers fund conservation measures they may not normally be able to finance, like lawn replacement and low-flow fixtures.
But the report also recommended Utah’s water suppliers adopt more “aggressive” tiered rate structures that discourage overuse.
This year, the Legislature required water suppliers to start billing for outdoor secondary water use at a tiered rate by 2030. But property tax will remain a part of those utilities’ income. If they change that source of income, it should be a slow and thoughtful process, per the study’s feedback.
It makes sense to spread some water infrastructure costs around, Sowby said, since they often have widespread benefits.
“Where I do agree with Utah Rivers Council,” the professor added, “is that our water rates in Utah generally are too low, and that’s why we have the water infrastructure deficiencies that we do.”
Utah Rivers Council asserts poor oversight over the amount of tax water districts collect, however, noting Jordan Valley’s tax revenue has nearly doubled since 2017, outpacing growth of the region’s consumer price index. The district’s two top officials earn more than Gov. Spencer Cox, the nonprofit added.
Janice Beecher, a professor emeritus and former director of the Institute of Public Utilities at Michigan State University, tracks utility price trends in the U.S.
She said inflation for water rates has long outpaced overall economic inflation. The price of construction materials has swelled like other goods and services, but water infrastructure has other expenses.
“Some of it may have been built out decades ago,” Beecher said, “and now it’s coming due for renovation or replacement.”
There aren’t as many federal dollars floating around to finance generational water projects. And it’s easier to lay pipelines in new subdivisions under development versus ripping up existing roads and hardscapes.
“The good news is,” Beecher said, “we’re using water more efficiently.”
That means while water suppliers’ budgets and prices have grown over time, water utilities still tend to make up a relatively small portion of the average household budget, since consumers are using less.
And Utah River Council’s calculations for tax revenue over time do not account for new growth in Jordan Valley’s service area, the district spokesperson said, which is not related to property tax increases.
Its two top executives also receive similar pay and benefits to similarly sized water districts in the state, Transparent Utah data show. Neither Beecher nor Sowby found it unusual that the specialized engineering skills and certifications necessary to oversee massive water utilities means salaries that swamp other public servants’ pay.
“There’s a labor shortage in almost every industry you could name,” Sowby said. “The water industry is no exception.”
Note to readers • This story has been updated to clarify Janice Beecher’s title.