SNOWBALL: California Is Looking To Tax Drinking Water
California is known for a lot of things: Ronald Reagan, Hollywood, beaches, hippies, student protests — and some of the most relentlessly progressive politicians in the entire country.
Simply put, the government of California is out of control. In total, the state added 1,016 new laws to the books in 2019, including a silly “straw ban,” intrusive requirements for children’s menus and yet another minimum wage increase. At virtually every level of Californians’ lives, state policymakers are ready to step in and interfere. From the cradle to the grave.
Now it seems the new governor, Gavin Newsom, is anxious to make his own contribution to the ever-expanding role of government in our lives by taxing some of our most basic necessities in an unprecedented power grab.
In his ineffable wisdom, the newly elected governor has proposed a statewide tax on, of all things, California’s drinking water. Newsom plans to dedicate the new tax revenues to programs to help communities clean up contaminated water sites. Improving the quality of drinking water may be a worthy goal, but the water tax proposal is a case study in the failures of progressive policymaking.
First, critics note that the new tax would be difficult and costly to administer. Jon Coupal of the Howard Jarvis Taxpayer Association said the proposed water tax is emblematic “of California’s knee-jerk reaction to default to a new tax whenever there’s a new problem.”
“It isn’t sound policy to tax a resource that is essential to life,” the Association of California Water Agencies noted, a coalition of public water agencies throughout the state. “The combined local administrative costs would exceed the combined statewide water tax revenue collected with local water bills.”
But more than concerns over the cost of the new tax or its administrability, is the simple fact that it runs counter to the will of the California electorate.
In the last election, voters defeated a statewide measure proposed to allocate $500 million in bond funding to ensure compliance with drinking water standards. According to a statewide poll conducted by Tulchin Research in 2018, 73 percent of likely California voters oppose the proposed tax on drinking water.
“Opposition to this proposed statewide tax on drinking water holds true among every major demographic group in the state,” Tulchin notes. “In a rare display of bipartisanship, Democrats and Republicans oppose the tax by nearly identical margins as do voters in both Northern and Southern California and voters in all ethnic groups.”
One key to understanding the unpopularity of the water tax is that California is already among the most heavily taxed states in the country. The Foundation for Economic Freedom reports that California already has one of the largest tax burdens in the country, pointing out that “In 2017, the state collected $82 billion in tax revenue — nearly $4 billion more than expected.”
Yet despite the state’s enviable financial status, Newsom’s plan to improve the quality of drinking water in the state appears to be taken from the usual liberal playbook: More taxes and more government as the solution for every societal problem.
But this suggests a lack of creative thinking on the part of the governor. There are, in fact, other solutions to the problem of contaminated water, experts say. “We think the problem can be solved without a tax,” says Cindy Tuck, deputy executive director of the ACWA.
One promising non-tax alternative to improving California’s drinking water is the Safe Drinking Water Trust funded by the state’s general fund during years with a budget surplus, as proposed by ACWA and California Municipal Utilities Association. According to Water Tax Facts, “The net income from the trust would create a durable funding source that will help community water systems in disadvantaged communities provide access to safe drinking water.”
If the governor is sincere in his desire to address water quality, he should first explore how alternative mechanisms like the Water Trust could be strengthened before he demands more money from already hard-pressed California taxpayers.
For now, the proposed water tax is further evidence that the state’s liberal politicians are all wet. And if they get their way, the rest of us will simply be hung out to dry.
Timothy Snowball is an attorney with Pacific Legal Foundation, a public interest law firm.