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Lawmakers douse bill to restrict property tax subsidy for water

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SALT LAKE CITY β€” A proposal to drastically reduce the amount of property tax collected by the state's largest water districts failed to survive a legislative committee vote Thursday, despite the support of the Utah Taxpayers Association and other organizations.

The measure, SB151 by Sen. Jim Dabakis, D-Salt Lake City, took aim at the state's largest water districts β€” Jordan Valley, Weber Basin and Washington County β€” and sought to restrict their annual revenue from property tax to 15 percent or less. It also would have prevented the districts from issuing bonds backed by that tax revenue.

"If ever there was an area where we would upset the entrenched apple cart, this is it," Dabakis said, stressing that water should be priced at the tap, not artificially priced through tax collections.

Dabakis presented his bill Thursday to members of the Senate Natural Resources, Agriculture and Environment Committee, which ended up tabling it on a 4-2 vote.

Zach Frankel, executive director of the Utah Rivers Council, said his organization surveyed the largest water districts in the West, and Utah remains the outlier that continues to use property tax collections to pay for water. Some districts, he added, get as much as 50 percent of their revenue from property tax, which disguises the "true" cost of water.

Critics of the measure, including Sen. Allen Christensen, R-North Ogden, said the bill had "hidden, ulterior motives," such as effectively stopping large water development projects.

The Utah Rivers Council is the leading critic of the Lake Powell pipeline proposed for southern Utah and the Bear River Development project. The cost of both projects would be leveraged against property tax collections by water districts well into the future and paid for in part with bonds.

But Sen. Howard Stephenson, R-Draper, speaking in his role as president of the Utah Taxpayers Association, said water users need to pay the "full freight" of the cost of water and the state shouldn't be in the business of socializing its cost.

"The inertia of paying for half the cost of water has to end," he said.

Dabakis argued unsuccessfully that Utah, with its status as the second driest state in the nation, needs to embrace signficant policy shifts to address its high per capita consumption rate, which the U.S. Geological Survey puts at tops in the country.

"The rest of the West does not do this," he said. "They conserve."

Ron Thompson, general manager of the Washington County Water Conservancy District, argued that property taxes aren't only levied to serve current customers, but to meet the needs of users years down the road.

"If you take property tax away, how do you make those who are here today provide for the future?" he questioned.

Afterward, Frankel said he was disappointed in the committee vote to table the bill, arguing that the measure would have saved taxpayers a substantial amount of money and significantly reduced water consumption.

"It’s disappointing there is still opposition and obfuscation to embracing market economics around water in Utah," he said. "What has to happen for the Utah Legislature to embrace fiscal conservatism around water?" Email: Twitter: amyjoi16

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