SALT LAKE CITY — A highly-anticipated study on water and property taxes is expected to be released this week.
It identifies a complex system that's different across parts of the state, but makes some policy recommendations for lawmakers to consider as they look at ways to cut water use and encourage conservation to save the Great Salt Lake, stretch resources further in the Colorado River Basin, prepare for growth and grapple with drought.
It could also impact how much you pay for water in the future.
"I think the outcome of this project is going to be so informational, really inform the next steps as we look at policies related to the pricing of water," said Laura Briefer, the director of Salt Lake City's Department of Public Utilities.
A draft version of the study was presented to the Utah Water Task Force, a group created to review proposed water legislation and policy. FOX 13 News attended the meeting where it was discussed before a final version of the study is made available to lawmakers and the public later this week.
The study was ordered by the Utah State Legislature in 2022, at a time when the Great Salt Lake hit a historic low and the state was grappling with severe drought conditions. A bill to upend how Utahns pay for water — in an effort to force more conservation — was advanced but faced pushback from local water districts and cities.
You pay a monthly water bill, but a large chunk of your water use is actually covered by property taxes. Some lawmakers on Utah's Capitol Hill believe that disincentivizes water conservation when people don't understand the "true cost" of water (Utah water users do enjoy lower rates than other states). But cities and local water districts rely on property tax revenue to fund critical infrastructure to ensure that water systems are up-to-date and the taps continue to work.
So the study explored what could — or should — be done.
"There’s two major ways people have been going about pricing water: There’s been one effort to motivate conservation on that tiered rate and almost increase the cost of water so it’s not as cheap, so it’s not as easy to overuse," said David Robertson of LRB Public Finance, which was hired to conduct the study. "Where other entities have been focused on the lowest cost of water."
The study's recommendations include keeping the property tax, said Candice Hasenyager, the director of Utah's Division of Water Resources.
"Property taxes serve a purpose," she said in an interview with FOX 13 News. "That being said, if there were changes to it as far as whether we limit it or change it? That there’s a long runway."
Property taxes pay for critical services and even fund water conservation projects, Hasengayer said. Which means switching to a flat "user fee" for water use could cause significant financing issues, especially if users experienced some sticker shock.
"Entities rely on that base rate and property taxes to really cover some of the fixed expenses to manage their systems," Robertson told the task force. "They just can’t be totally at the whims of how people use their water."
But the study also recommends Utah consider getting more aggressive about "tiered rates." That means the more water you use, the more you would pay.
"I think there are opportunities to use more aggressive rates to help incentivize conservation while still having some level of property taxes. The policy question is, what is the right level?" Hasenyager told FOX 13 News.
Members of the task force also asked about who is paying for water and how Utah compares to other states.
"Do you know if in those states there’s an effort to get non-taxpaying entities to make up for the difference between what they’re paying versus what a taxpaying entity is paying?" asked Mark Stratford, the general counsel for the Jordan Valley Water Conservancy District.
"A lot of entities did suggest that these [non-taxpaying] entities need to pay something into the system. They shouldn’t have a total free ride," replied Robertson.
"Non-taxpaying entities" include cities, schools and churches. They don't pay property taxes like a typical resident would, but may still have a monthly water bill. What the study found is current Utah law could allow them to be charged more for the water they use.
"The report identifies there are mechanisms they could help to pay additional fees for that," Hasenyager said, adding that the issue then becomes how they administer that fee.
One of those who could be impacted the most is The Church of Jesus Christ of Latter-day Saints, a major property owner in Utah (and a politically powerful presence in the state). They have a lot of chapels and temples with landscaping. A spokesperson for the faith declined to comment to FOX 13 News on the study until a formal bill emerged in the Utah State Legislature.
While the Utah State Legislature will ultimately decide what policy paths to take, Utah Department of Natural Resources Executive Director Joel Ferry said conservation must remain a top priority for the state.
"I am a firm that believer pricing is an important tool that should and can and needs to be utilized to promote conservation," he told task force members. "If we’re not wanting to raise prices because we’re afraid to use less water but then we have to go out and develop water because people are using too much? We are in a vicious cycle and we will fail. Conservation has to be a focus."
This article is published through the Great Salt Lake Collaborative, a solutions journalism initiative that partners news, education and media organizations to help inform people about the plight of the Great Salt Lake—and what can be done to make a difference before it is too late. Read all of our stories at greatsaltlakenews.org.
