RIVERTON, Utah — A bill designed to change how Utahns pay for water in their property tax bills is advancing on Utah's Capitol Hill.
Sen. Dan McCay, R-Riverton, is proposing a major change in how property taxes are calculated — and what they cover — in light of the ongoing drought emergency facing Utah.
"How do we take and pass the ultimate cost of providing water to all of the users that are using the water?" he said in an interview with FOX 13 News on Wednesday.
A large chunk of property tax bills cover water (it's separate from water bills that municipalities require). Sen. McCay, who chairs the Utah State Senate's Revenue & Taxation Committee, is proposing to change that.
"You can look around the community and see water-wasters all around for various reasons," Sen. McCay said, arguing for re-working taxes to ensure people pay for what they use.
The ultimate impact could mean some entities, who have never had to pay property taxes or for the water they use, will now have to spend a little money. That could include government buildings, churches and other nonprofit organizations.
"If you look at what we’re paying along the Wasatch Front for water? We really are getting a steal for our water anyway," Sen. McCay said. "As you see the need to conserve more, the only thing that really has to align that interest is to make the cost reflective of the risk of not having water."
The proposal, which Sen. McCay first introduced at the Utah Taxpayers Association conference earlier this year, has gotten mixed reviews.
"If you use a lot of water? You should have to pay for it. I think it’s only fair. We can all do our part," said Lynn de Freitas, the head of the environmental group Friends of Great Salt Lake.
She said in light of the Great Salt Lake hitting a new record low, Utah needs to re-evaluate how it handles property taxes and water.
"I think the public needs to understand what the true cost of water is. Right now, it’s hidden in most cases in property taxes," de Freitas told FOX 13 News. "And I think if we could help the public recognize what the cost is, what they don’t need to use and how much that does cost."
But some major water suppliers have concerns. The Central Utah Water Conservancy District said property taxes cover some major capital infrastructure improvements.
"Forest and wildland restoration after a wildfire, recreational flows in rivers and streams, water planning, things like that, water rates don’t pay for," said K.C. Shaw, the deputy director of the district.
The Central Utah Water Conservancy District has been meeting with Sen. McCay about the pending legislation and believes they can come to some agreement, but they want to ensure infrastructure is covered.
"We believe that a proper mix of property tax and reasonable water rates provide the best source of funding to operate water systems," Shaw said, adding: "We just need to have more conversation to say there are benefits that property taxes pay for that all of the state benefits from even if they don’t receive water."
Shaw said he does support the idea of organizations like nonprofits paying a fair share for water they use. Other organizations like the Utah League of Cities & Towns have wanted to see the overall impact before deciding if they support the bill or not. The Utah Taxpayers Association, a tax watchdog group, said it supports Sen. McCay's bill, arguing it is "fairer" for everyone.
"I think what everyone will expect once we have a bill is that your water rights will be tied to use. And the capital projects will be built into those rates," said Sen. McCay.
He anticipates a bill being made public by November. The 2023 legislative session will begin in January.
"We're still going to have ways to fund water projects in the state. Those improvements are going to be needed," said Sen. McCay. "They’re going to be needed for conservation, as well. What we need to make sure is that we, as users, start changing our behavior. Not just paying for what we’re using but also changing our behavior such that we’re using less."
