Research on imported water sales and property tax authority

By Susan Longville

In the ten years between 2003 and 2012, the California Department of Water Resources reports that Valley District purchased just under 470,000 acre-feet of imported water from the State Water Project. (http://www.water.ca.gov/news/newsreleases/2013/121013drr2013_report.pdf).

SUMMARY: Between 2010-2013, in the midst of a drought and dropping water levels in local basins, Valley District sold 90,000 acre-feet of imported water (29 billion gallons). In fact, in the last seven years, Valley District sold a whopping 25% of all the imported water it bought to MWD. There is no doubt that the sale of water has in part contributed to the basin levels 550,000 acre-feet below the level considered full-- beneath the historic low of 1964 before any imported water became available.

PROPERTY TAX RESEARCH: Property owners within Valley District's boundaries pay property taxes based on assessed value. The current rate is $0.1625 per $100 of assessed value. For the sake of illustration, a median-priced home assessed at $250,000 last year paid $406.25 (250,000 divided by 100=2500 x $0.1625 = $406.25).

Valley District is exempt from Prop 13, passed in 1978, because State Water Project taxing authority was granted in 1960. It has the authority to raise taxes without a vote of the people for costs associated with the State Water Project.

What will happen to property taxes when construction begins of the proposed twin-tunnels in the Delta, the Bay Delta Conservation Plan solution? A final decision is expected next year.

Should Valley District increase property taxes, without a vote of the people, because it legally can and this is the manner that ratepayers have always paid for the State Water Project?

SUMMARY: There should be a vote of the people with Valley District for ratepayers to decide how they want to pay for the twin-tunnels. Let them decide whether higher property taxes or higher wholesale water costs are right. It's only fair since this is the most expensive water project in the State's history and it will be paid for by generations to come.