An Alternative Solution

ACWA/CMUA Safe Drinking Water Trust Proposal

ACWA and the California Municipal Utilities Association are sponsoring SB 669 (Caballero) to create a Safe Drinking Water Trust. Instead of relying on a proposed statewide water tax, the Trust would be funded with General Fund dollars during one or more state budget surplus years. 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.

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
  • 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 Trust’s principal would be invested, and the net income would be transferred to a Safe Drinking Water Fund, which the State Water Board would administer