Facts on ACWA and CMUA Proposal for a Safe Drinking Water Trust
ACWA and the California Municipal Utilities Association (CMUA) are sponsoring SB 669 (Caballero) to create a Safe Drinking Water Trust that will help community water systems in disadvantaged communities provide safe drinking water. The Trust would be funded with General Fund dollars during a state budget surplus year with the net income from the Trust creating a durable funding source.
Why is there a need for safe drinking water funding in California?
- Most Californians have access to safe drinking water, but some disadvantaged communities do not
- Lack of access to safe drinking water is a public health issue the state must address
- A funding gap exists for operations & maintenance (O&M) costs for community water systems that treat water
- In general, O&M costs cannot be financed using existing state and federal drinking water funding sources
- In some situations, consolidation of a community water system may be the most effective solution
- A financial solution is needed for O&M and consolidation costs that can complement existing federal and state funding sources for capital costs
How would the ACWA/CMUA proposal for a Trust work?
- The Trust’s principal would be initially financed with a one-time infusion of General Fund dollars during a budget surplus year
- There is a record budget surplus for the 2019-2020 Fiscal Year, which makes it the perfect time to create and fund the Trust
- The Trust’s principal would be invested, and the net income would be transferred to a Safe Drinking Water Fund, which the State Water
- Resources Control Board would administer
- Funding the Trust via the General Fund serves as a progressive source of revenue, as taxpayers with higher income would contribute more, while lower income taxpayers would contribute less
The governor and some legislators are proposing a statewide tax on drinking water. How would that work?
- The state would levy a monthly tax on the water bills of more than 10 million homes and businesses in California
- More than 3,000 local water agencies would serve as tax collectors for the state in collecting the tax on drinking water bills
- Local agencies would incur significant administrative and technology expenses associated with implementing new systems used for collecting water tax revenues from local water bills
- Revenues generated from the tax would be funneled through the State Water Board, which would allocate funding to safe drinking water projects in the state