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State of California's budget unveiled with proposed statewide water tax included

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  • State of California's budget unveiled with proposed statewide water tax included

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On Dec. 10, Gov. Gavin Newsom released his proposed 2019-’20 budget for the State of California. The budget proposes approximately $144 billion in general fund spending, which is about $6 billion higher than last year’s budget signed by previous Governor Jerry Brown.

The budget prioritizes spending in the areas of education, social services, and homelessness, and seeks to strengthen the state’s already sizable fiscal reserve, which Newsom noted is the largest state reserve fund in American history.

The budget specifically calls out funding for Safe and Affordable Drinking Water. It discusses the need to find a stable funding source for long-term operation and maintenance of drinking water systems in disadvantaged communities, stating that existing loan and grant programs are limited to capital improvements. To address the funding need, the budget recommends the following:

  • Safe and Affordable Drinking Water Fund – Establish a new special fund, with a dedicated funding source from new water, fertilizer and dairy “fees”, to enable the State Water Board to assist communities, particularly disadvantaged communities, in paying for the short-term and long-term costs of obtaining access to safe and affordable drinking water
  • Proposes a policy framework consistent with SB 623 from the 2017-’18 legislative session
  • Proposes $4.9 million to the General Fund on a one-time basis for the State Water Board and Dept. of Food and Agriculture to implement the new program, including
  • Implementation of the “fee” collection systems
  • Adoption of an annual implementation plan
  • Development of a map of high-risk drinking water aquifers​
     
  • Safe Drinking Water Projects – $168.5 million in Proposition 68 funds for the State Water Board to provide technical assistance, grants, and loans to public water systems in disadvantaged communities for infrastructure improvements
  • Emergency Water Supplies – $10 million in General Fund spending for the State Water Board to address safe drinking water emergencies in disadvantaged communities, including providing alternate water supplies such as bottled and hauled water, and emergency improvements or repairs to existing water systems
  • Technical Assistance – $10 million in General Fund spending for the State Water Board to contract with, or provide grants to, an administrator to provide administrative, technical, operational, or managerial services to a designated water system to achieve compliance with current drinking water standards

The preliminary budget will be updated in the Governor’s May Revision. The final version of the state budget must be finalized and passed by the Legislature by the June 15 statutory deadline.

If the water “fee” proposal is consistent with SB 623, it will be a proposal for a statewide water tax that will require a two-thirds vote of the Legislature.