SALT LAKE CITY — A bill that would have dramatically changed how Utahns pay for water will not be advancing in the state legislature this year.
On Wednesday, Senate Revenue & Taxation Committee Chair Dan McCay pulled his bill, announcing to an interim committee "there will be some reworking."
The bill was viewed as a way to help with a declining Great Salt Lake and an ongoing statewide drought. It had won support from taxpayer watchdogs, environmentalists and some members of the public. But it faced pushback from local water districts, who exercise sizable political influence on Utah's Capitol Hill.
"This is a big lift. It is a hard issue. It has been entrenched for generations to be taxed this way. It shouldn’t surprise anyone it’s going to take more than pulling the duct tape off," Sen. McCay, R-Riverton, told FOX 13 News afterward.
Right now, people get a monthly water bill. But the vast majority of their water use is covered by property taxes. Some institutions like schools, churches and government-owned golf courses, do not pay property taxes at all. Environmentalists have argued that leads to over-consumption of water and over-collecting of taxes.
Sen. McCay introduced a bill to pivot to a rate-based system. He argued it could force water conservation once Utahns saw the "true cost" of water.
"Everyone recognizes the need to do a lot more for conservation to preserve the [Great Salt] Lake, for the long time viability of Utah's economy," Sen. McCay said. "We need to provide water for all those uses."
Local water districts and municipal governments raised serious concerns about the proposed legislation. They argued that changing the property tax formula could harm their ability to pay for critical water infrastructure projects designed to ensure public health and safety. Those projects can cost millions. (One of Utah's biggest nonprofit property owners, The Church of Jesus Christ of Latter-day Saints, has not taken a position on the bill.)
Sen. McCay said he ultimately agreed to order a study to address everyone's concerns. Speaking for Utah's largest water districts, Jordan Valley Water Conservancy District General Manager Bart Forsyth said it was a good move.
"This study makes a lot of sense, from my perspective. It’s a study that's a long time coming," he testified to the committee. "It’s something that's been needed for sometime. We support moving forward with a study of this nature and welcome it."
Zach Frankel, the director of the Utah Rivers Council, said he was disappointed.
"The water conservancy districts in Utah collect property taxes at a rate three times the rate of water districts outside Utah," he said, pointing to a study his group had done on the issue. "This special interest has just gotten too large."
In public testimony, some were upset the bill would not go forward.
"It's time for action, not for more study," said Joan Gregory. "This could have been one piece of the solution to protecting the Great Salt Lake."
Annie Payne told the committee the bill would have solved a number of problems.
"If you end water subsidies, you will take a big bite out of your two most pressing problems: you’ll offer tax relief to homeowners at a critical time and put more water into the Colorado River and Great Salt Lake," she said.
Sen. McCay said the bill would return — just not in the upcoming legislative session.
