Capitol Alert

One less tax. California lawmakers move to reject Gavin Newsom’s water fee

A Senate budget subcommittee rejected Gov. Gavin Newsom’s water tax plan on Wednesday, instead recommending finding $150 million elsewhere to finance a safe and affordable drinking water fund.

Newsom proposed the tax in his January budget to help communities clean contaminated water systems. His May budget revise also included a fee to address the statewide problem that affects one million Californians.

“The governor has made his proposal in the budget, and he is encouraged by the conversations with the Legislature,” Newsom’s spokesperson Nathan Click said. “His objective remains providing a permanent and sustained funding source for safe drinking water.”

Instead of a tax, the newest proposal is contingent on the passage of Carmel Democrat Bill Monning’s Senate Bill 200, which establishes a fund that the $150 million would finance.

The subcommittee’s decision to lock in funds for future budget cycles could eliminate the challenge of securing votes to pass another tax. A water fee proposal died in budget compromise talks last year as Democrats worried about asking constituents to pay more..

“It’s been a big stumbling block when it’s called a tax,” said Steve Maviglio, a Democratic strategist who worked with water tax backers. “That’s the beauty of this. It’ll be in every budget.”

The money would come from the state’s general fund, but lawmakers did not clarify what other programs might be cut to obtain the money or whether they’d dip into a state surplus to pay for it.

“We have a $22 billion surplus and dealing with this onetime infrastructure problem by all accounts is going to be about $150 million,” said David Wolfe, legislative director for Howard Jarvis Taxpayers Association. “Once these projects are done, this isn’t something we have to revisit. We’re way more in favor of that than a precedent-setting tax.”

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Hannah Wiley joined The Bee as a legislative reporter in 2019. She produces the morning newsletter for Capitol Alert and previously reported on immigration, education and criminal justice. She’s a Chicago-area native and a graduate of Saint Louis University and Northwestern.