New Study Recommends Utah Maintain Use of Property Taxes and More Aggressive Tiered Rates to Fund Crucial Water Projects

November 19, 2024
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SALT LAKE CITY (Nov. 19, 2024) – In relation to SB 34 (2023), the Utah Division of Water Resources has contracted with LRB Public Finance Advisors to complete a new study on water infrastructure funding. This study evaluates how property tax revenue is currently utilized in the supply, delivery and water infrastructure needs of Utah and neighboring states. It also explores best practices for the procurement and management of infrastructure funding and makes recommendations for promoting equity among water users. 

“To secure Utah’s water future, we must be intentional about conservation and the investments we make in water infrastructure,” said Sen. Daniel McCay, R-Riverton. “This study will help Utah strategically balance smart investment and effective water conservation.” 

The study quantifies the impacts of various policies and rate structures and provides foundational data sets to illuminate the costs of the current water rates. It also explores the potential financial impacts of shifting to other rate structures and removing or limiting certain tools available to water purveyors today.

“This study is a resource for policymakers and water suppliers,” said Candice Hasenyager, director of the Division of Water Resources. “We want to ensure the best available information on how we currently fund water in the state and considerations if policy changes modify it.”

One key finding from the study is that tiered rates have proven to be effective in curtailing excessive water use but, if utilized alone, pose risks to reliable revenue stability for operations and securing debt. It also highlights that if property taxing authority were limited entirely, monthly water rates could negatively impact low-income, non-profit and non-taxing entities. Impacts could vary and would greatly depend upon how changes are implemented. Modifying how water is funded would require prudent implementation to ensure stable financial operations for Utah’s water sector and avoid unintended consequences. 

More details can be found in the Water Infrastructure Senate Bill 34 Study. For more information, contact Michael Sanchez, public information officer, at 385-226-8967 or email [email protected].

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The Utah Division of Water Resources is one of 10 divisions housed within the Department of Natural Resources. Tasked with planning, conserving, developing and protecting Utah’s water resources, the division serves as Utah’s water steward.