Throughout his tenure as governor, Jerry Brown has consistently pursued new revenue for transportation, housing and water. The Legislature, whose default reaction to any problem is to raise taxes on middle-class Californians, has only been too happy to oblige. As a result, California drivers were hit last year with an annual $5 billion gas and car tax and property owners were burdened with a new tax on real estate recording documents to fund affordable housing. As if those tax hikes were not bad enough, now comes the third in a trifecta of tax insults: a new tax on water used by homes and businesses. That’s right, the Legislature is preparing to tax a public good that is essential to life, a precedent-setting tax that is unheard of anywhere else in the nation.
Supporters of the bill will argue that the tax is needed because roughly one million people (mostly in the Central Valley) don’t have access to consistently clean drinking water. This is a legitimate problem due to decades of neglecting basic infrastructure, contamination of water supplies and the failure to make access to water delivery the priority it deserves.
But raising taxes is the wrong solution to this problem. It is unconscionable that California, which has a record-high $130 billion General Fund budget with a $6 billion surplus, can’t provide clean drinking water to a million people using existing resources. Is this not the first role of government, providing a public good essential to life? Moreover, why should taxpayers in Los Angeles, San Francisco and Sacramento have to pay higher water bills for a problem that is mostly limited to groundwater contamination in the Central Valley?
Most Californians haven’t even heard of this proposed tax hike. But that’s only because the Legislature is going out of its way to keep it hidden. Originally introduced as Senate Bill 623, the bill failed to advance last year because of widespread opposition. Nearly all residential homeowners would pay a dollar a month if this tax went through. The tax works on a sliding scale based on meter size — heavy commercial and industrial water users could pay up to $10/month. Not content to just abandon the bill, the governor has now decided to drop this tax in a budget trailer bill. These bills, often dozens of pages long with multiple topics, is the perfect place to hide a tax. If the bill moves forward, taxpayer advocates will watch carefully to ensure that the two-thirds vote requirement for tax hikes is enforced. Because most budget bills only need a majority vote, a lawsuit will quickly follow if the higher threshold is not met.
Our concern is that the governor has become so obsessed playing the “hide the tax” game that he hasn’t bothered to look at other alternative funding sources to solve this problem. If using a $6 billion surplus is off the table, there’s an option to tap into federal funding which is available for precisely this purpose. Or there are billions of dollars of unspent bond funds, including the recently voter-approved Propositions 1 and 84 that can be used to provide clean drinking water. Bond dollars are perhaps the best vehicle to provide major infrastructure improvements needed in the Central Valley. …
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The state currently holds more than $8 billion in unclaimed property that rightfully belongs to more than 32 million people and businesses. More than three-quarters of unclaimed properties are estimated to be eligible for the new expanded eClaim feature. Yee says that by increasing the threshold to $5,000, she’ll be able to return another $9.4 million per year.
