Sacramento Taxes Nearly Everything. Is Drinking Water Next?

Sacramento Taxes Nearly Everything. Is Drinking Water Next?

Apparently, there’s nothing so sacred nor so ordinary that Sacramento won’t tax it. Possibly next up on the tax table is a first-ever levy on drinking water.

During last year’s legislative session, lawmakers proposed through Senate Bill 623 a 95-cent monthly tax on water bills. The revenue, about $200 million, would be spent to “secure access to safe drinking water for all Californians, while also ensuring the long-term sustainability of drinking water service and infrastructure.” This is needed, according to the bill’s language, because “those living in small disadvantaged communities, may be exposed to unsafe drinking water in their homes and schools, which impacts human health, household costs, and community economic development.”

For those who didn’t know — and that would be quite a few of us — the bill also tells us that “existing law declares it to be the established policy of the state that every human being has the right to safe, clean, affordable, and accessible water adequate for human consumption, cooking, and sanitary purposes.”

Rights can sometimes be funny things, especially when a political ruling class can decide that it’s good public policy to force one group to pay for a “right” enjoyed by another group. This is a problem that universal health care advocates run into when they say health care is a right and declare that a portion of the population must pay for the health-care-by-right for others.

But that’s a discussion for another time. Today the issue is the “Safe and Affordable Drinking Water Fund,” which is making its way through the lawmaking process in the current session as a two-year bill. We know how its supporters feel about it from the language of the legislation. So, what do others think of it?

Assemblyman Phillip Chen, a Republican from Brea, wrote in the Orange County Register last year that “while we all can all agree that all Californians should have access to safe and clean drinking water, there are ample general fund resources and many federal grants available to pay for those costs. The answer is to this problem is not imposing a new $200 million annual water tax.”

SB 623 supporters, he said, claim the legislation will help the poor, the disadvantaged, and those living in rural areas. But “it does not. If you are a private groundwater well owner, you will not be eligible under this bill to apply for state or federal funding to address any contaminants in your water. Adding a tax on drinking water will only make clean and safe water less affordable for all Californians.”

Chen also referred to research from the California Tax Foundation that found from January 2017 to nearly the close of the session, Sacramento legislators “introduced more than 90 bills that would cost taxpayers more than $370 billion annually in higher taxes and fees.”

“Now these lawmakers want to add another tax but this time on your drinking water. Will there be anything that is not taxed in California?”

Those who would have to live by the law are also opposed to it. An Association of California Water Agencies poll of 1,000 likely voters taken in January found that ”73 percent of Californians somewhat or strongly oppose the idea of imposing a drinking water tax on residents and businesses.”

Californians would be better off if government removed itself from the politics of water price and distribution. Water should instead be allocated by market means. Open markets work efficiently and fairly for other goods and services, and there’s no reason they won’t work for water. Competition by providers drives down prices and improves products. Consumers win, because in markets, they always do. In any other system, the winners are the politicians and those they favor.

Kerry Jackson is a fellow with the Center for California Reform at the Pacific Research Institute.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.