Legislature must not fund delta water tunnels through back door
Published 6:36 pm, Sunday, July 27, 2014
The state’s plan to build twin tunnels to export water from the Sacramento-San Joaquin River Delta to places farther south is controversial, contested and very expensive. So may be the way that local water districts choose to pay for it.
Until recently, it had escaped everyone’s notice that local water agencies can raise property taxes to pay for water infrastructure without getting voter approval. It turns out that there’s a small quirk in the law that allows water agencies to do so – and at least a few of them are considering raising property taxes in order to pay for the delta plan.
“Legally, my understanding from our attorney is that we could,” said Jeffrey Kightlinger, general manager of the Metropolitan Water District of Southern California. But Kightlinger quickly emphasized that his water district had no plan to do so. “We haven’t raised our property tax portion of revenue since 1960. It always felt like raising rates would be the fairest, most direct way to pay for things.”
Kightlinger’s hesitancy also reflects the fact that California voters are passionately attached to voting on any tax increases, particularly property tax increases. Proposition 13, which requires a two-thirds vote of approval on property tax increases, is still very popular. Some antitax groups, including the Howard Jarvis Foundation, have already sounded an alarm that there will be a fight over any property tax increases by water agencies.
There might be a fight, but the antitax groups are unlikely to win it. State courts concluded decades ago that water agencies have the unique authority to raise property taxes without voter approval because voters approved the construction, operation and maintenance of the State Water Project in 1960 – nearly two decades before the passage of Prop. 13. The California Legislative Analyst’s Office agrees with this assumption.
In fact, some water agencies have indeed raised property taxes over the years, usually by a very small amount. The Santa Clara Valley Water District’s property tax rate regularly fluctuates up and down by fractions of a percentage point, for instance. “Every year the board sets the increment rate a little differently,” said Jim Fiedler, the district’s chief operating officer.
The Santa Clara Valley Water District is among the agencies contemplating a property tax hike to pay for the new tunnels. It, like other water districts, doesn’t have enough money to pay for its portion of the tunnel budget otherwise.
The problem is that there are still plenty of interest groups that oppose the tunnel project – is it really wise to add average homeowners to that list?
The state needs to make a better argument for its delta plan. It needs to soothe voter fears about how the tunnels will work, what their environmental impact will be, and how California is going to pay for them. If the state can’t make that argument successfully, then any attempt to fund this project via property tax increases without voters’ consent will be a political disaster for everyone involved.