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Plan to change Utah’s property tax rules may compel water conservation

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A plan to overhaul Utah’s property tax policy has been presented, and supporters hope it would encourage greater water conservation.

Sen. Dan McCay, R-Riverton, who leads the Revenue & Taxation Committee in the Utah State Senate, unveiled the plan during a Utah Taxpayers Association conference on Wednesday.McCay’s plan would eliminate water-use subsidies from property taxes.

“We utilize property tax to pay for water in Utah,” Senator McCay told FOX 13 News. “Unfortunately, what that does is it shifts the burden away from people’s monthly bill, so they know how much water they’re consuming, and they can really be attached to that rate and be incentivized for conservation.”

According to McCay, property taxes pay up to two-thirds of water expenditures, with the remainder billed to customers monthly.

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“At some point, the state of Utah needs to get to the point whereyour rates are connected to how much you’re consuming,” he added.

The concept has been tried previously, but it did not gain support on Utah’s Capitol Hill. The drought, according to Rusty Cannon, President of the Utah Taxpayers Association, is forcing the discussion to resume. His organization is in favor of the policy change.

“We can alter that, put in place the proper tax policy, and as you heard here today, hopefully, that will happen soon,” Cannonsaid.

Cannon suggested that it would be a more equitable tax policy that would cut total property tax rates. It would also compel water conservation by penalizing water wasters.

“Those that use a lot of water will pay more, while those who use less water will pay less,” Cannon explained to FOX 13 News.

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The policy change would also collect more money from governments such as the state of Utah and organizations such as churches that do not pay property tax. Senator McCay agreed that all entities should pay for water use. 

“I believe everyone is responsible for their fair amount of water, correct? This includes organizations, government agencies, andbelieve it or not, the state,” McCay said.

The proposal startled those in the audience at the Grand America Hotel.

“All of that is now being considered because we are experiencing a record drought,” said Cameron Diehl, executive director of the Utah League of Cities and Towns, which represents local governments.

Diehl expressed concern about how the tax would function and if it would adequately finance local water conservation districts. His organization was not ready to take a stand on the idea.

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“I believe it is still too early to tell whether it should be X or Y. We must consider what water conservation implies for communities, users, infrastructure, growth, companies, and the ecosystem as a whole. We need to have a look at everything.”

McCay said he wanted to guarantee that water agencies had funds to meet infrastructure needs.

“At the end of the day, water districts need to be whole, they need to deliver water, and they need the security of continuous revenue so they can plan for capital expenditures. What we need to do is go out to the end customer so that they realize how much they’re using and that it shows up on their bill,” McCay said.

During his speech to the Utah Taxpayers Association, House Speaker Brad Wilson, R-Kaysville, was asked about the idea. He agreed that water is a huge issue confronting the state and that it may be something they should discuss.

Speaker Wilson, who personally supported legislation to help conserve the Great Salt Lake, predicted that water shortages in Utah will worsen.

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“I see all these sites that take water that isn’t going to the Great Salt Lake or Utah Lake, and it’s just being squandered and used in inefficient ways. We need to think about it differently,” Wilson urged the audience.

McCay said the water issue will be discussed in interim parliamentary hearings during the following year. Any measure may be submitted during the 2023 legislative session, which begins in January.

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